This is part 1 of a two-part series on how e-commerce is changing the transportation industry and what carriers can do thrive in this brave new world. Part two focuses on the emerging technology trends.
E-commerce is booming. This year, online sales will represent eight percent of total retail sales in the United States and continue to grow at more than 10 percent a year, reaching $370 billion in 2017.
This prediction, by Forrester Research, attributes a recent surge in growth to widespread use of smartphones and tablets. People are spending more time online researching and buying products, including larger items like furniture, appliances and cars.
To compete with the success of online-only retailers like Amazon and eBay, many retailers are using “omni-channel” strategies to increase sales. Omni-channel describes a supply-chain that gives buyers the freedom to decide when and where to purchase goods — in the store or online—and where to receive delivery — in the store, at home, or another more convenient and cost-effective location.
For the transportation industry, the biggest benefactors of e-commerce are the parcel carriers. UPS and FedEx are ranked No. 1 and 2 on the CCJ Top 250.
Less-than-truckload and truckload carriers have traditionally steered clear of “final-mile” deliveries to residential areas. That model is changing as e-commerce has grown larger than parcels and packages. Increasingly, carriers are finding opportunities to add new services, expand into niche markets, and create more value for their customers.
The following examples showcase carriers that have succeeded by changing their business models and information systems to ride the wave of e-commerce.