Multimodal Shipping in the Age of E-Commerce: How to Maintain Cost Control

MercuryGate Blog - E-Commerce Category

E-commerce gives retailers new opportunities to increase revenue, attract new customers, and create lasting business relationships. Unfortunately, the steady growth of e-commerce also complicates cost control. Without a careful eye, freight spend soars, and shippers are often left holding the bag of lost efficiencies and reduced profitability. To avoid this problem, shippers need to understand the challenges of e-commerce supply chains and how innovative shipping strategies, such as multimodal shipping, boost cost control.

E-Commerce Presents Major Challenges to Cost Control

Significant challenges arise due to e-commerce gains. Supply chains are no longer linear, and customer demands continue to climb. Shippers should take the time to understand these key challenges, as explained by More Than Shipping:
  • Last mile delivery continues to redefine standard shipping strategies. More complicated supply chains include changing last mile delivery options. Instead of stale, just-leave-on-porch (JLOP) delivery, consumers can have products delivered, installed, and set up. The process grows even more complicated when you also consider the removal of old products, such as appliances and furniture.
  • Inability to track shipments past movement scans. Another problem derives from the limited visibility within global supply chains. While scanning products during touchpoints is excellent, it still leaves room for error. For instance, “out for delivery” can mean a product delivery is within an eight-hour range, which lessens the customer experience.
  • Use analytics. Analytics help shippers identify inefficiencies and predict performance.
  • E-commerce generates a larger customer base, creating new opportunities to attract and retain customers. While beneficial, this means an increased demand on the supply chain, amplifying risk along the way.
  • Eliminate errors with robust training. Providing proper training to your staff reduces the risk of human errors and reduces pushback from employees against change.
  • Poor e-commerce returns insights. Poor returns management creates another issue in the realm of e-commerce. Returns management is integral as up to 30% of e-commerce purchases result in returns, so any failure in returns management naturally leads back to higher freight spend.

Multimodal Shipping Works Perfectly With E-Commerce

Think about traditional supply chains. Products flowed directly from manufacturers to regional distribution centers to retailers and lastly to consumers. In the modern world, products flow in all directions. Globalized demand results in global logistics complexity and activity. While this gives smaller retailers an opportunity to reach customers around the world, traditional logistics simply can’t keep up with the demand and complexity. As a result, shippers need something that goes beyond conventional supply chains, capable of adapting to demand and delivering products faster. This remains especially important as Amazon moves to offer free same-day delivery on more and more products nationwide. Thus, multi-modal shipping becomes the only viable, today-ready option. Even for returns management, multi-modal shipping lowers costs, despite increasing the number of touchpoints. As more shippers gain real-time visibility into inbound and outbound shipments, including returns, the adoption of multi-modal will rise to secure lower rates and faster deliveries.

Tips for Using Multimodal Shipping in E-Commerce Logistics

According to Big Commerce, the leading tips for deployed multi-modal shipping include:
  1. Create the right team
  2. Set realistic, clear goals
  3. Refocus your shipping strategy
  4. Implement and measure
  5. Continuously improve
  6. Limit product packaging
  7. Track add-on charges
  8. Continuously re-evaluate shipping practices
  9. Have a system that can support shipping between various modes so you may compare rates in real-time, build loads optimally, and provides visibility into the status of all shipments at all times.

Retake Control Over E-Commerce Costs With Multimodal Capable TMS

E-commerce is here to stay. Shippers that do not take the time to re-evaluate their shipping strategies will face higher costs. Fortunately, multi-modal shipping solves the challenges and lowers spend. Of course, it all depends on using the right systems and services.

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Phil Melton
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