Browse Tag

expedited shipping

The Impact Of The Amazon Effect On Traditional Freight Transport

Before the e-commerce segment rose to mainstream relevance, the retail industry’s logistics part had seen little disruption over decades preceding it, sandwiched between opaque workflows and stifling inefficiencies. That said, the consequential impact that e-commerce has on the workings of the supply chain today would not have been possible without the online retail behemoth Amazon and the ‘Amazon effect’ that lies in its wake.

In essence, Amazon obsessed over its customers.

Put simply, the Amazon effect is the evolution of supply chains from looking at end consumers as ‘yet another’ part of the value chain to putting them at the center of their operations. In essence, Amazon obsessed over its customers, aligning its product offerings and services to ensure the highest standards in parcel delivery experiences.

Subsequently, the consistent efforts of Amazon to provide impeccable delivery fulfillment to its customers snowballed to create an environment where expedited shipping became a parameter that set businesses apart from their market competitors. Eventually, this led businesses to start looking at delivering faster and keeping their customers in the loop on last-mile parcel movement.

While the need for visibility and expedited shipping have long been an expectation within the supply chain industry, they are not possible without digitalization.

While the need for visibility and expedited shipping have long been an expectation within the supply chain industry, they are not possible without digitalization. In many ways, digitalization within the freight industry can be inferred as the direct consequence of e-commerce. Data in supply chains remains frozen within siloed operations, as companies continue to cut off their data streams and not gain insights by feeding them to data-driven algorithms.

Meanwhile, consumer expectations within e-commerce have overflown from its business to consumer (B2C) segment to the business to business (B2B) segment of freight logistics, where shippers are increasingly expecting better experiences while moving freight. Shippers often rationalize their visibility requirements, contending that when Amazon could show them precision location status of individual parcels, fleets could afford to track entire containers.


Amazon effect’s impact on inventory levels

The e-commerce segment differs from the traditional retail industry in the way the former reduces the number of intermediary nodes within supply chains connecting the manufacturer with the end consumer.

Traditional retail moves products through several nodes in the supply chain, including manufacturers, distribution centers, and retail inventories, before selling to end consumers in retail outlets. E-commerce compresses this value chain, cutting out the retail inventories and storefronts, and replacing it with a multitude of last-mile delivery models.

As e-commerce bites into the physical retail market, there is a steady shift in the size of inventories and the way they are held. The depth in e-commerce offerings has translated into an increase in the variety of products stocked in inventories, inevitably showing up as an expansion in overall inventory volumes.

However, the inventory volume increase is not proportional to the expected increase. Shortening of lead times can be one of the reasons for the inventory volumes to not increase to expected levels. That apart, while logistics stakeholders look to stock products that are in demand, they also opt to stock limited quantities and not worry about overstocking due to short lead times. This way, companies also reduce the risk of stocking product lines that have become obsolete. Obsolete product lines are a real possibility as product demand is an extension of consumer interest in a said offering, which can abruptly change in a matter of days.

This is especially true of electronics, where older versions witness a rapid fall in demand as improved versions hit the market. The ease of e-commerce makes it easier for manufacturers to approach the market without intermediaries, increasing the chances of entire product lines being trashed due to a better alternative mushrooming in the market.


Last-mile delivery disrupted by the Amazon effect

Amazon’s customer obsession has ensured that the last-mile segment is one of the primary differentiators for delivery fulfillment within the e-commerce market. The last-mile is expected to be nimble, with the gravity of consumer expectations making it one of the crucial parts of freight movement.

Retailers are reevaluating their supply chains, attempting to consistently improve their customers’ delivery experiences. Technology has come to the rescue, with several additions being made to the way the last-mile is handled, including automated delivery bots and VTOL drones. Dynamic route optimization is part of a last-mile delivery company’s arsenal, with delivery vans given routing instructions based on parameters like location, parcel specification, and delivery time windows.

or logistics at large, there are two main operational costs – inventory and freight.

For logistics at large, there are two main operational costs – inventory and freight. While expenses on inventory and freight are comparable, the Amazon effect has successfully pushed scales towards freight costs – courtesy, an inordinate increase in air freight movement due to expedited shipping options. However, with the last-mile almost exclusively fulfilled over the road, the trucking industry would inevitably continue being impacted by the ubiquitous Amazon Effect.

A Guaranteed Shipping Story by: Michael Sannuto

WHY! OH! YOU! YOU! YOU!

Companies ship with us because they believe or have some type of faith in the person who contacted them from BG to get their business. Case in point:

I just set up a new shipper yesterday that had very high anxiety about shipping because his products are shipped in very time sensitive situations and he has been burned before. His freight was lost, still had to pay and was not compensated in anyway.  He hammered me with questions about what BG does if we book a shipment with “Guaranteed” delivery and it does not arrive on time.  He wasn’t totally happy with my answer as I explained we will “fight” for him, but he ended up shipping with me anyway.  I gave my word that I would keep a close eye on his shipment and “babysit” it for him.  I meant what I said and delivered on my promise for his guaranteed shipping needs. I have been keeping him in the loop with email status updates over the last 2 days, kept in touch with the carrier and made sure the delivery was a smooth process.  He continually responds with “You are great”, “Thank you for taking care of this for  me”, “I really appreciate your help”, “You’re doing a great job”. Helping people keeps me going at BlueGrace and we do it for people every day.

We’re happy to say that his shipment is on track for pick up today. I sent him an update to let him know and he is very happy someone actually cares.
This is how we roll. We care, we go beyond expectations, we are BlueGrace.  It’s all about YOU!

My Shared Experience by: Michael Sannuto, National Sales Representative

Let BlueGrace fight the complex battles of shipping for you. We know the meaning of Exceptional Logistics.

Our Guaranteed Shipping services come with a 100% Money-Back Guarantee. Click here to learn more about BlueGrace Logistics’ Guaranteed & Expedited Services. To book a shipment, please call 800.697.4477– you can even ask for Michael Sannuto himself!

The Power of a Guarantee

  1. Something that assures a particular outcome or condition; Lack of interest is a guarantee of failure
  2. a. A promise or an assurance, especially one given in writin, that attests to the quality or durability of a product or service.
    b. A pledge that something will be performed in a specified manner.
  3. a. A guarantee by which one person assumes responsibility for paying another’s debts or fulfilling another’s responsibilities.
    b. A guarantee for the execution, completion or existence of something.

In the world of LTL (less than truckload) logistics everyone such as customers, account managers, carriers, and shippers alike can tell that capacity is getting tighter and tighter. I looked through my shipments for the time I have been with BlueGrace and majority have actually been picked up and delivered on time. For some customers transit time is not an issue just a long as their freight delivers and is in one piece. But what happens for our customers where their freight has to be on time or else? I have a conveyor belt company, and they were shipping a belt where the belt has to be delivered for their business to function and it didn’t get there on time. Since the belt did not get to the customer in the time allotted, the plant workers producing soda cans and bottles could not produce. The customer did not know the impact of not having an expedited shipment. This shipment was two days over the estimated transit time that being said for two days the twenty workers at the plant were getting paid to be there and not produce regularly. When you add the loss of productivity from your workforce and the loss of product for two days the loss starts going into thousands of dollars.

expedited services | guaranteed shipping | expedited shippingThere have been many cases like this where the shipper did not get the guaranteed option and relied on the standard transit time the carrier estimated and were let down. These transit times are an estimate and everyone at BlueGrace knows an estimate is just an estimate, not an exact science. Most of our carriers have expedited shipping options where shipments like the belt could have been guaranteed on time and problems like this would not have happened. When shipping in the current marketplace, it is much easier to pay some more upfront than having situations like the belt happen in the back end. This will also show customers and the carrier alike that this freight is important to you and your customer, and the extra care they will provide is better for all parties involved. The next time you are booking a shipment with us at BlueGrace just ask for the guaranteed shipment and see the real difference it will provide.

-Dustin Snipes, Account Manager
Follow me @DSnipesNole_BG