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Shoppers can expect changes as e-commerce alters trucking sector

July 23, 2014

E-commerce has undergone exponential growth in recent years and as the landscape of online retail shifts so will the methods by which products get delivered.

E-commerce has undergone exponential growth in recent years and as the landscape of online retail shifts so will the methods by which products get delivered.

Fleet Owner, a trucking publication, explained that as more transactions are completed online the changes to logistics practices are bound to be felt by trucking firms, drivers and consumers alike. The publication noted that the biggest change to be expected will be global rising shipping rates.

“We don’t know for certain what the world will look like in 2025, but the study’s various scenarios show how rapid the global retail sector, both online and offline, is changing and that logistics will be a focal point of these change processes,” said Sumesh Rahavendra, head of marketing for DHL Express in Sub Saharan Africa, in a report called Global E-Tailing 2025.

One thing Rahavendra and DHL have established for certain is that competition between internet retailers will grow only more intense as e-commerce becomes the preferred method of shopping for many. E-commerce trading volume in developed countries may, in the near future, reach 40 percent, while that of emerging markets can be expected to hit around 30 percent, he explained in the report.

Trucking and e-commerce have both experienced notable growth in recent years
In 2013 the percentage of sales in the United States completed online was 6.2 percent, according to a report released by commercial real estate company CBRE. That total is expected to reach 10 percent by 2017. This year, in North American alone, business-to-consumer sales totals are expected to reach $482.6 billion.

As the increasingly influential ecommerce industry pushes for same-day delivery capabilities both the storage and distribution of goods seems set to move with the financially favorable sway of the online retail industry.

And Fleet Owner’s report reflects the massive segment of the product distribution industry that is composed of trucking companies. According to Genco, a third-party logistics provider, the trucking sector was responsible for 67 percent of the tonnage moved and 81 percent of the total revenue transportation companies made in 2010.

By 2022, the company reported via American Trucking Industry, that the industry will experience a 66 percent rise in revenue and a 24 percent increase in tonnage moved.

“Many retailers put significant focus to attract customers, but more effort needs to be paid to facilitating flawless delivery to customers. Even more so when deliveries begin being measured in minutes, as opposed to hours and days. This will require logistics to adapt, as well as deliver competitive advantages, such as offering same day delivery and flexible returns.”

The two industries have even begun to blend to a degree with companies such as Cargomatic – which assists shippers in need of carriers – has emerged as a viable e-commerce service in southern California, according to Internet Retailer. The company handles over 100 deliveries per day at an average cost of approximately $120 per delivery. The company has connections with hundreds of trucks and businesses in its region that have taken advantage of the simple product transportation distribution service.

With competition increasing between online retailers, and among trucking firms both traditional and radical, set to only increase consumers can expect to see the changes reflected in service and pricing.

“With already thin margins, we believe most e-tailers will pass the increase along to the customer in terms of either higher unit prices on goods or by passing the shipping costs on to the customer. Shipping is never ‘free’ – someone is paying for it. Trucks aren’t free, fuel isn’t free, and drivers are certainly not free,” said David Ross, a managing director with Wall Street investment firm Stifel, Nicolaus & Co., in a research brief.

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