E-commerce industry and logistics

23 March, 2021 |

Mail order has posted a material growth in recent years, and so has the logistics market. We now know that these two industries are strongly intercoupled. Orders placed by online shops account for a large share of business pursued by transport companies, and some are focused exclusively on e-commerce orders. On the other hand, mail order shops have to establish a permanent cooperation with transport companies in order to get the parcel to the customer in the most expedite manner. Day by day thousands of trucks in Poland carry consignments galore to reach their recipients.

The symbiosis between these sectors is crucial for their mutual benefit. Both industries rely on each other, striving for the highest possible quality of service. The time of delivery is definitely a pivotal factor of success. As shown by the surveys, as many as 60% of consumers abandon a purchase in an online shop because of the long waiting time for a package. For the delivery to be carried out in an efficient manner, communication, organisation and logistics between the e-commerce shop and the transport company are key.

A significant share of shipments by transport companies originates from online shops. This demonstrates how huge this market is. Transport companies have to develop all the time, investing in new vehicles and logistics to be able to handle so many orders. The appetite for even more convenient and faster service is constantly growing. Consumers are not willing to count delivery times in days, but in hours. This makes another major challenge for the logistics industry.

Sales growth in online companies

2020 proved an exceptionally successful year for the e-commerce industry. The outbreak of the pandemic triggered a considerable boost in orders from online shops, which also affected the transport industry that completed these orders. As compared to March 2019, areas such as Groceries recorded a growth of over 200% this year. For the Health and Beauty, Electronics and Children’s, the figures stood at 138; 66 and 62 percent respectively. It is worthwhile to mention that there are many more industries that have seen a pick-up in orders.

The sudden demand for online ordering is attributable to the coronavirus pandemic that has been ongoing since March this year. With restrictions forcing the closure of shopping malls and supermarkets, shopping has moved to the virtual environment. It is worth noting that the Polish e-commerce market was already growing year-on-year, reaching PLN 50 billion in 2019. Efficient logistics also contributed to the success of e-commerce, which, along with the increase in orders for delivery, also had to develop.

Symbiosis between mail order and logistics

Indeed, online shops could not operate without the transport industry. Every e-commerce company wishes the shipment to leave the warehouse and swiftly reach the consumer. Thanks to advanced warehouse management systems, orders can be delivered even faster. The transport of packages to more distant destinations is much better organised and planned than a few years ago. Cooperation between the e-commerce industry and the transport industry is crucial for the successful fulfilment of orders.

What drives e-commerce sales?

Delivery times are extremely important for the successful operation of a mail order business. According to the survey, as many as 38% of respondents cite long waiting times for products as the major drawback of online shopping. Some are even able to cancel their purchase if the delivery time is too long. In order to encourage customers to shop online, delivery times must be reduced as much as possible. As shown in the statistics, an efficient logistical handling of a store makes consumers more willing to spend money.

There are countless mail order shops on the market, which vary in size. From small, specialised websites with just a few products in the range, to real e-commerce moguls, such as Allegro or OLX. What’s more, more and more online shops are established daily to draw on the huge and ever-growing market. The value of e-commerce accounted for 11% of the entire retail market in 2019. As much as 20% is forecast for 2025.

The projections imply companies that have not yet commenced their online business may lose a lot in the coming years. Along with the market, competition will also intensify. In other words, companies will have to invest in shop operations and logistics. Automation is a solution that is gaining recognition. It is not so widespread yet, it is predicted that the Fourth Industrial Revolution, that is Industry 4.0 will take place in the coming years.

What is the Industry 4.0??

Ludzkość od zawsze dążyła do rozwoju i usprawnień swojej pracy. Od wynalezienia maszyny parowej, po elektryczność aż w końcu komputery i internet. Termin IV rewolucja przemysłowa oznacza nic innego jak automatyzacje produkcji. Jej efekty możemy obserwować już dzisiaj, gdzie na nowoczesnych halach produkcyjnych część pracy wykonują roboty. Na magazynach specjalnie zaprogramowane maszyny same zbierają towar i przekazują je do wysyłki.

Wokół automatyzacji nie brakuje jednak kontrowersji. Czy maszyny pozbawią ludzi pracy? Eksperci nie mają wątpliwości, że czynnik ludzki będzie zawsze najważniejszy w każdym aspekcie pracy. Rola człowieka będzie wciąż miała ogromne znaczenie w produkcji.

Advantages and disadvantages of automation

Automation in the e-commerce industry is already a fact of life and it’s only a matter of years before more and more mail order shops implement automation as a cornerstone of production. Amazon, US giant, is a good illustration, which uses robots in its warehouses to move heavy and light parcels from one place to another. The advantage of such a solution is certainly a material reduction in costs and operating the facility round the clock.

However, not everyone supports such solutions. Industry 4.0 raises questions about the role of humans in the process. Many people fear that being replaced by robots they will go redundant. Another disadvantage of automation is the high cost of purchasing equipment. It must take some time before the costs start to pay off. This means that small and medium-sized companies will not soon be able to afford to automate their warehouses.