5 Ways E-Commerce Technology Seeks To Impact The Shipping Industry

5 Ways In Which E-Commerce Technology Seeks To Impact The Shipping Industry

E-commerce trade and online shopping trends that have been gradually swallowing up retail trade sectors have eventually caught up with the shipping industry. The fact that this lucrative sector of the global economy remains untapped technologically saw several multinational e-commerce companies shift their attention to the sector. These companies draw most of their inspiration from the huge success achieved with other industries where online shopping accounted for over 13 percent of retail trade in the US in 2017. But how does the promise of e-commerce impact the shipping industry:

Bringing In More Players

Just recently, the e-commerce giant Amazon obtained a license as a freight forwarder. Similarly, Maersk, one of the largest shipping companies in the world, partnered with Alibaba in a bid to establish its e-commerce front. The involvement of these global online traders seeks to incite a technological evolution within the shipping industry by taking the focus away from the shipping companies to the customers.

Introducing Convenience

While the rest of the world and economic sectors continue to embrace digital technology in streamlining their operations, the shipping industry still wallows in outdated business practices. For instance, most enterprises have digitized their sales processes from marketing to delivery. The shipping sector is however yet to adopt this level of digitization thereby making it attractive to e-commerce players who hope to carve out a niche for their brands by introducing technological solutions to this sector.

Eliminating The Middlemen

The presence of middlemen in almost every stage of the shipping process not only makes the industry bureaucratic and unnecessarily expensive but also dissuades potential clients and investors. However, by introducing automated supply chain solutions, e-commerce players hope to eliminate the need for most of these middlemen from the equation. Such an act effectively lowers the shipping costs while speeding up the delivery process. The new entrants into the shipping industry seem to be banking on this efficiency to draw in more customers and turn the sector into a hub of activities.

Reshaping Customers Experience

Tight budgets, complex supply chain networks, and constant revaluation of the bottom line have turned the shipping industry’s sight far away from the target, customer satisfaction. On the other hand, e-commerce companies like Amazon consider every other business challenge tolerable, regardless of its magnitude, as long as they meet and exceed customer’s expectations. This customer-oriented form of business has seen e-commerce become a darling of the contemporary retail industry and the entrants hope to replicate it with the shipping industry.

Introduction of Reliable Shipping Analytics

Retail industry experts consider accurate analytics on consumer behaviors as the leading cause of success for most e-commerce stores. Their ability to forecast trends, sales, and manage inventory has proved revolutionary to the industry. On the other hand, the inability to focus these analytics ha time and again spelled doom for shipping companies. Infusing these predictive market analytics within the shipping industry will, therefore, go a long way in identifying consumer and industry trends and reacting accordingly.

Bottom Line

The perceived entry of the world’s leading e-commerce companies into shipping doesn’t, however, spell doom for the existing players. Rather, these companies should strive to form strategic alliances with these technology companies as an adaptation to changing business alliances as well as a form of ensuring their survival.

Davenport Laroche is a leading shipping container investment agency based out of Hong Kong.

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