What is ecommerce shipping management?
Mar 1, 2022
The shipping industry continues to grow and meet the challenges of supply and demand during the global pandemic. However, where once concerns such as piracy and politics may have been occasional issues to navigate, the shipping industry now faces the effects of massive fluctuations in shipping costs and vessel values, increasing regulation and bureaucracy, as well as environmental concerns.
The shipping industry has responded to the pressures of the Covid-19 era, but it is difficult to predict and track new outbreaks and how they may impact global shipping. On top of this, many leaders in the shipping industry were in the process of digital transformation when the virus hit which was disrupted as companies had to quickly adjust their priorities.
Value chains were already shifting and forcing shipping companies to reassess their role as service providers for the logistics industry. Now, having a progressive approach to logistics really does give a competitive advantage in the shipping business.
In the months leading up to Christmas 2020 this shift in the dynamics of shipping became apparent. Due to the increase in digital shopping in the wake of the coronavirus outbreak, 51% of retail leaders said they’d be increasing investments in logistics and supply chain, according to a report from BigCommerce and Retail Dive from late 2020.
Again, in 2021, the world faced pre-Christmas shortages. As a result, big brands in the USA like Home Depot, Walmart, and Costco chartered ships in a bid to avoid supply chain disruptions to booming ecommerce. This follows a precedent that Amazon set back in 2017 when its Chinese logistics division started brokering ocean freight services for suppliers who are part of the “Fulfilled by Amazon” (FBA) service. They also began making their own shipping containers in 2018 and have almost created their own shipping system including chartering planes to circumnavigate the issues many other companies are facing due to the supply chain crisis.
Small ecommerce business shipping
But what if you’re not a large, international business and don’t have containers full of orders to ship? With the rise of small businesses setting up shop online as well as independent retailers trading through platforms such as Amazon and eBay, ecommerce shipping solutions are more in demand than ever.
Helping these small companies manage their shipping on a consolidated ecommerce platform which supports order management, allows business owners to print shipping labels, and updates inventory is something that companies like Shopify aim to optimize and streamline. A multichannel ecommerce solution integrates all aspects of the business from admin to storefront, payments, and messaging with an API (application programming interface). This leads to a more connected customer experience when there are a number of online sales channels, for example, the use of Instagram Shopping as well as the company website. Shopify also integrates the inventory of a bricks and mortar shop with online sales.
Providing visibility of real-time shipping rates from different providers is part of these integrations on Shopify, as is reduced pricing on shipping options depending on the business owner’s subscription plan. Shopify Shipping offers access to pre-negotiated rates but only with carriers in the US, Canada, and Australia. Popular international shipping carriers like UPS, DHL, and FedEx all have shipping calculators on their sites to help people get the best rates, but having them all in one place helps business owners save time.
If a business sells similar kinds of items that are generally the same size and weight, it may establish flat rate shipping, which helps it to get one step closer to automation.
What are third party logistics solutions?
As small ecommerce businesses grow, dropshipping becomes an attractive option. This is when all customer orders through an ecommerce business are sent directly to a wholesaler who is responsible for the fulfillment process.
Many dropshipping suppliers offer worldwide warehousing and international order fulfillment, taking the stress out of inventory management and handling of the shipping process. ShipBob is a third party logistics (3PL) warehouse solution that helps small to medium sized brands grow and expand into different marketplaces because they have fulfillment services in Europe, the UK, the US, Canada, and Australia. This supports small business owners with their workflow and brings cost savings to the bottom line.
A 3PL option can also help reduce cart abandonment because there are no surprises at checkout of prohibitively high international shipping fees. The 3PL will deal with pick lists and packing slips and help to select the best delivery options for a business to ship orders.
What are multi-carrier shipping platforms?
Shopify is just one option of many for online stores. But what if a small online business doesn’t necessarily need the ecommerce storefront that Shopify provides or Shopify Shipping does not operate in the business’ home country?
All-in-one shipping software (such as EasyShip, Sendcloud, and Shippo) offers shipping services and order management. These multi-carrier shipping platforms help fulfill orders from the moment the shopping cart items have been paid for. From that point, they will organize shipping methods based on a company’s choice of carrier rates and what the customer has selected, such as next-day delivery.
A company like Easyship can offer hybrid solutions. This is when both postal and regional express couriers are used because these kinds of companies have unparalleled access to shipping routes and logistics networks. This can lead to a combination of faster delivery times and lower shipping costs with tracking updates. The increase in online shopping has meant that delivery services who offer tracking numbers have become more prevalent. Real-time tracking can be even more attractive to customers but may be more expensive alongside services like named day delivery. The kind of functionality shipping platforms offer can be invaluable to business, especially in challenging times.
Be a key player in creating shipping solutions
The shipping industry is growing exponentially. Greek container ship giant Danaos hit a year-on-year net income increase in 2021 of just over $1 billion.
Global spot rates for 40-foot containers were still running high at $9,604 in January 2022, which is more than double the price they were in January 2021. However, with Amazon’s logistics division stepping into a role that was previously left to commercial freight forwarders, the pressure is on to improve international shipping systems and the logistics network so that it remains competitive. If the industry can’t keep up, large manufacturers and retailers will continue to control logistics with their own container ships. This will create a shift in shipping, making it an integrated function of large businesses.
An online MBA with Shipping Management from the American College of Greece can give you the specialist skills to help an ecommerce business remain competitive despite unpredictable developments in shipping, offering industry insight and the qualifications to enter the sector with a head start.
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