Companies have identified e-commerce as having a big impact on service and ground transportation requirements, according to a new DHL survey.
“The Logistics Transport Evolution: The Road Ahead” report found that 65% of the respondents identified the exponential growth of e-commerce and its implications on service as having a significant impact on supply chains.
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In particular, the extraordinarily high service expectations born of e-commerce are impacting businesses. These include customer expectations of same- or next-day delivery; variable last-mile delivery options; high in-transit visibility; and flexible or free return policies and always in-stock inventories.
The survey also found that the impact of e-commerce on markets, in general, and ground transportation in particular, varies by region. For example, when comparing the impact of e-commerce over the next one to two years versus three to five years, U.S. respondents expect the impact to slightly decrease, from 63% to 60%.
In Europe, Middle East & Africa, Asia-Pacific, and Latin America, that same impact number increases from 65% to 69%.
The perceived value of transportation’s role also differs depending on market and geographic region. In a mature market such as Europe, for example, added value could include network transport optimization. In a developing or emerging market, by contrast, value could simply mean reliable, on-time, perfect-condition delivery.
The supply chain company said it undertook this study to gain an insight into exactly what companies expect from their transportation service providers, both today and tomorrow.
For this report, DHL Supply Chain conducted a global survey of more than 200 transportation decision makers across the globe and within all the major industry sectors, asking about their current and future transportation operations and strategies.
“Our research has shown us that customers are increasingly looking for complete solutions with a global reach as they can solve a wide range of transportation issues and requirements.”
The number one requirement of shippers when choosing a 3PL is the ability to “manage multiple transportation solutions that solve all my ground transportation needs.”
Also high on the list of priorities is the ability to implement ground transportation solutions around the world. This shows that the new complexity in ground transportation—and the ability to manage it—if taken in combination, has created a strong need in the marketplace.
In other words, shippers recognize that a transportation solution that represents true value balances multiple requirements: a fair price and the ability to solve a wide range of transportation issues and requirements. In particular, the solutions should address the complex issues created by an e-commerce-driven business environment while providing a global reach.
Challenges to the success of the e-commerce business model abound, said the report.
One, in particular, according to survey participants, is urbanization. Urbanization—the migration of populations into urban and mega urban centers—creates congestion, which poses significant challenges for companies and their 3PLs trying to deliver into these high-density cities. Sixty-one percent of survey respondents indicate this demographic shift will significantly impact their future business.
The research showed that throughout Europe, the United States, and Asia, more and more mega urban centers are deploying congestion pricing and tolls on vehicles entering urban areas during peak business times—or, in some cases, at any time.
Environmental concerns about transportation’s significant carbon footprint will grow as an issue and a potential constraint in delivering goods into these highly populated urban areas. Today, 76% of respondents stated that legislation around mandatory carbon reporting is having a big impact on their transportation decision making.
Broader societal factors were also highlighted as presenting associated challenges, with 61% of companies referencing the increase in urbanization as a factor that will significantly impact their future business. Technology and its ability to help manage this complex environment are increasingly seen as a standard requirement of 3PLs: more than two thirds (67%) of companies believe that big data analytics and artificial intelligence (AI) are services that are essential for 3PLs to offer their shipper customers.
Photo: fancycrave1
