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How E-Commerce is Shaping the Logistics Industry

Posted by Frances Zyra Mella | July 21, 2016

E-commerce is growing at an impressive rate. The total global business to customer e-commerce sales is anticipated to grow to US $2.3 trillion by 2017. In the United States, it’s expected to have an annual growth rate of 9.8% from 2013 and 2018. In Europe, it has an even bigger expected growth rate of 12% per year in the same time frame. But all that growth has to affect the global logistics industry.

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Amazon’s move into the ocean freight business may have surprised many, but with how fast e-commerce is growing, it makes perfect sense. Ocean carriers who work with retailers will benefit a lot when they create more efficient and cost-effective services. Various ocean carriers have already created relationships with companies that provide them with sailing schedules, booking, shipping instructions, billing, tracking and reports. United Parcel Service, Inc. (UPS) has invested more than US $1 billion to expand their facilities and to modernize their equipment to accommodate this growing market.


With the possibility of losing business to competitors, logistics companies have been competing to develop technology to make it easier and faster for shippers to book freight transport at a cheaper price.


With e-commerce demanding faster, more reliable shipping, companies need to turn to technology to be able to better track and understand their shipments. Innovative packaging methods can also protect perishable or sensitive goods from uncertain conditions on the road. The Internet of Things will play a big role in the future of logistics, too: sensors connected to packages and vessels will be able to update carriers in real-time with information about the location and status of shipments.


Online retail is expanding faster than the logistics industry can innovate—but through partnerships and embracing new technology, worldwide transportation can allow e-commerce to flourish further, and usher in a new age of shipping.

 

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