1) Overview of eCommerce Logistics
With the unprecedented rise of social commerce and Ecommerce companies, customers and businesses alike have often wondered how does Ecommerce logistics works. Online businesses of all niches require the constant assistance of Ecommerce logistics providers to scale their business and reach millions of customers. Ecommerce businesses require more effective and efficient logistics solutions to handle increasing volumes, with millions of customers now preferring to shop online.
Ecommerce logistics and courier companies work by providing shipping, packaging, picking services to online stores. They also offer many other shipping services that can help a business grow and reach a newer audience. The only way to truly optimize logistics operations is to understand how end-to-end logistics work. With a proper understanding of the various stages of delivery, ecommerce companies can choose the best logistics partners.
Teaming up with a reliable and trustworthy logistics partner is just one step in the right direction. Each and every stage of the delivery process is subject to its own complexities and difficulties, from the moment an order is placed until the customer finally receives it. In fact, there are 5 major milestones that a shipment must cross to fulfill and complete an order.
In this article, we will take a detailed look at all the steps involved in the shipping process and break it down so that you have a better understanding of what goes on in eCommerce shipping and how Ecommerce logistics work. This knowledge will help eCommerce businesses understand how shipping costs are calculated and assess which services are more essential for their business. Let's read on then!
2)The Inner Workings of ECommerce Logistics in India- 5 Different Steps
The goal of every eCommerce logistics company is to simplify the process of sending orders from the seller to the customer. Since long logistics providers in India used to enable easier shipping for businesses and enterprises. But the massive growth of eCommerce and social commerce in the past decade has challenged logistics providers to add more and more shipping services to their existing repertoire.
Moreover, these logistics providers have had to up their game against the imminent competition by improving upon their existing services. Generally speaking, there are 5 phases in the shipping and delivery process. Taking a look at these will help you determine how your eCommerce business can optimise fulfillment and enhance every customers’ post-purchase experience. These stages are:-
2.1)Inventory and Warehousing
Inventory management is an important part of order fulfillment and makes up a huge part of how eCommerce logistics work. This part of logistics involves making sure the products you need are available and ready to be shipped as soon as the order is placed.
Most logistics companies offer warehousing services where stocks of items can be stored and easily picked up by their delivery agents. A logistics company can work by providing extensive warehouse management and inventory management solutions to eCommerce clients.
By making use of WMS (Warehouse Management System) and OMS (Order Management System), logistics providers can store all of the seller's orders in various warehouses located near the customer base. A WMS and OMS can record inventory, keep track of incoming and outgoing items, manage product returns and exchanges. This can help save time and costs when it comes time to ship an order. Some logistics companies even specialize in inventory management which lets you keep track of your stock in a real-time basis.
2.2)Manifestation and Pick Up
Once your stock has been firmly planted, either in a warehouse or storage centre belonging to your company, your logistics company, or another 3PL, you can start shipping orders. The process of creating an order for shipping with the respective logistics company is known as order manifestation.
This includes entering the order details into their database, getting the AWB (airway bill) generated and a shipping label printed before sending the order for delivery. The final stage in this process is assigning the order for pickup. How long the manifestation takes depends on the kind of eCommerce logistics provider you choose. While this process is typically difficult to do for many orders across multiple logistics partners, ClickPost lets you integrate with a single API that automates all these activities.
2.3)Transportation and In-Transit Storage
After manifestation, your order is picked up and finally on its way to the customer. While 3PL logistics companies handle a whole range of logistics services, the bulk of their work comes down to safely transporting the order to its final destination, i.e., the customer.
Most logistics partners maintain their own fleet of trucks while others may outsource their vehicles from other transportation and trucking companies. Many, like Blue Dart, offer option of air freight. Transportation is a crucial thing to look at if your online store plans to ship orders internationally or cross-borders.
Some also offer warehousing and storage facilities in transit, so items can be safely stored overnight before resuming their journey. The resources they use for shipping orders can impact both delivery speed and cost.
The tracking services used by the logistics company can also make a difference to customer experience as real-time tracking updates using tech-enabled solutions can keep customers excited about their order, even if delivery has only just begun. Some eCommerce logistics companies like FedEx make use of temperature-controlled fleets that can transport items in very low temperatures. FedEx also has permission to transport dangerous and inflammable goods.
2.4)Last Mile of Delivery and Delivery Exceptions
The last mile of delivery is the final stretch in the transportation services provided by logistics companies. This is the stretch that takes orders from their in-transit storage locations and delivers them to customers. In last-mile delivery operations, a delivery agent picks up the order from the nearest hub and delivers it to the customer in a vehicle or fleet of their own. Last-mile delivery is known to be the most expensive stretch of the delivery process because of the problems and challenges it faces.
This is the stretch where delivery exceptions can occur, like delays in the delivery, shipments getting stuck in certain ports due to transportation or customs issues, or delivery agents being unable to deliver the item for a variety of reasons. At this point, real-time tracking can help you keep customers informed and updated of delays which make them less likely to cancel the order if they are unable to track it or if it doesn’t arrive on time. When delivery attempts fail in the initial try, they are labelled as NDRs (non-delivery reports).
A logistics company that maintains a good NDR management system can be especially helpful with the last type of delivery exception. ClickPost offers an automated NDR system that pushes issue-specific queries to customers as soon as a failed delivery attempt is reported.
Whether it was because of the time of the delivery or an incorrect address being provided, the right data is immediately collected to increase the chances of the second delivery attempt going smoothly, thereby reducing the number of delivery exceptions that are cancelled and become RTOs (return-to-origin).
Reverse logistics is as important an element of delivery as forwarding logistics. A big part of eCommerce logistics is to work out ways to reduce returns and learn to manage them in a way that costs the eCommerce store next to no loss.
While reverse logistics do come into play when it comes to RTOs, the bulk of this side of logistics is used for customer-initiated returns. Much like how an NDR management system can help you keep track of failed deliveries and assure their successful completion, a good returns management system also makes a huge difference.
ClickPost offers a front end for customers to place return requests and a backend for ecommerce businesses to manage them. Some logistics companies provide real-time tracking for returned orders so you can keep track of their reverse journey.
Few also provide quality checks (QC services) at the time when the returned order is being picked up. This ensures that the correct undamaged product is being returned. A logistics company with an established returns management system ensures a majority of returned orders, if not all, end up safely back at their origin warehouse.
As anyone would be able to guess, the work of a logistics company is to oversee the packing, pick-up and successful delivery of any and all orders placed with them. However, for eCommerce logistics, the scope of services goes far beyond this. eCommerce logistics companies must make proper use of the latest technological advancements to make their solutions the most efficient.
Given that eCommerce caters to such a large group of demanding and excited customers, simply delivering the product is not sufficient. Customers want to be able to track their orders with ease and receive proactive updates from the ecommerce company they purchased from. Proper management systems for inventory, order creation, tracking, NDRs, and returns can ensure logistics partners make the entire process transparent to both you and your customers.
The work of eCommerce logistics providers is to work hand-in-hand with the eCommerce company itself so that any shipping issues and delays can be managed well in time without causing any difficulty to the customer. We hope this article helps you understand how e-commerce logistics work and which sort of services an eCommerce company should look for when choosing a logistics partner for their business.