The start of the digital age marked the era of the industrial revolution. With the introduction of various technological resources, we witnessed the creation of new industries and the transformation of old ones.
One of the industries that the digital age gave birth to is e-commerce. Since its establishment in 1991, it has continuously developed into something that has become a big part of our lives. The progressive growth of e-commerce has even resulted in traditional companies adopting it as a means to survive the corporate world. One sector that the growth of e-commerce has severely affected is logistics.
From merely being involved in moving and shipping products from manufacturers to the market through a linear routing system, logistics service providers had to work hard to evolve and cater to e-commerce consumers. Nevertheless, the logistics industry is also an essential part of the e-commerce industry. Without them, online shopping and shipment of goods will not happen. So, to say the least, e-commerce and logistics service providers are cooperating key factors that make online shopping possible.
How is logistics connected to e-commerce?
As everyone is aware, the e-commerce industry was introduced by Amazon. Since then, a lot of online companies have opened and adopted their strategy. However, unlike Amazon, not all companies have the resources to conduct a wide scale shipment of goods.
This is where logistics service providers for e-commerce companies go in. Many firms had to take in third-party service providers to cater to the increasing demand for online purchases. These service providers are responsible for routing strategies that enable online merchants to deliver their products and goods.
How does e-commerce affect logistics service providers?
Since the connection of both industries has been thoroughly explained above, there is no denying that each of the industry has had its fair share of effects on each other. Because of the growth of e-commerce, logistics service providers are brought back to life.
Furthermore, it has also caused the logistics industry to evolve progressively. Since there is an increase in demand for wide scale shipment and transfer of goods, logistics service providers are encouraged to step up their operations to supply the public’s demand.
However, this development also comes with risks. As the e-commerce industry progresses, it also turns competitive. This is evident in how online companies entice their customers with strategies like discounted, or even free, shipping. This poses a threat to many logistics service providers.
Without the flexibility to adapt to the challenges e-commerce companies bring, many logistics service providers fail. While this goes unseen in the eyes of the public, logistics service providers are pressured into developing strategies and mechanisms just to stay afloat. This threatens smaller logistics service providers, which have a limited area of network.
Nevertheless, the collaboration of industries such as logistics and e-commerce create a completely new network of customer satisfaction and experience. And in relation, both industries are expected to continuously progress for more years to come. While logistics service providers risk a great deal in collaborating with e-commerce companies, the reality is that the logistics industry is given more opportunities for growth and development.
Despite the pressure and the risks, the e-commerce industry has actually given logistics service providers a promising future. What with the entire global logistics market in the e-commerce industry expected to reach $726 billion by the year 2020, it is safe to say that the logistics industry is progressing in a good way.