In the current international business environment, heightened customer expectations impact every part of the supply chain. At the same time, next-generation delivery and logistics management solutions are making global supply chains smarter, faster, more customer centric, and sustainable. Here are six trends to pay attention to in the world of global supply chain management for 2020 and beyond.

1. Using green logistics to cut costs and win customers

Logistics companies are integrating sustainability efforts into their overall strategy, motivated by keeping the environment “Green” and eliminating pollution. The trend is often referred to as “Green Logistics”. This will not only help the environment, but also it will enhance corporate reputations, lower supply chain costs and most importantly increase customer loyalty.

2. Supply chain integration an increasing focus for large companies

The enhancement and improvement of technology has played a major role in changing supply chain processes. Recently, top ocean carriers have started trying to move increasing numbers of documents through online processes, with the goal of streamlining the entire supply chain.

Maersk and DAMCO are two of the world’s leaders in moving containers, and their idea is to double down on the logistics processes with higher integration of inland services. This will help shippers to route their transportation at reduced cost, as the two companies have planned to connect sea and land, beyond the port of call. Alongside that initiative, digitization plays a huge role for them as it helps them to access to real-time data and information, create more agile and efficient processes and operations and more importantly, develop a more flexible “Elastic Logistics” strategy.

3. Is TradeLens technology the tool of the future?

A lack of visibility and transparency affects end to end supply chains negatively. Professionals are now trying to minimize risk and get the results for the whole process in one go!

TradeLens is a new software powered by blockchain technology, which will support global trade as a possible single platform to track the end-to-end shipping journey, making the entire process more transparent. Carriers, major shipping lines, ports, 3PLs, freight forwarders and other shipping and logistics players would all share and use the one single portal to update their customer.

Though it’s going to help for tracking freight, continued access to and use of the information is crucial. While streamlining the inventory management and improving the asset utilization is important factor for logistics, it’s important to keep an eye out for any downsides for customers and the industry as a whole from continued adoption and usage of this tool.

4. The hidden costs of taking humans out of the equation

While many companies are moving to an increasingly digital workflow to reduce costs, in my opinion going digital is itself a big cost as investing in technology would be. While it will be beneficial at some point, investing in infrastructure and training humans will help to increase the productivity of supply chain and eliminate the additional cost of maintenance.

This lack of infrastructure and service can lead to rising costs. Several carrier charges double the money for a simple local delivery, and include high fuel rates and excessive bunker charges. All 3PL try to minimize the cost and work efficiently, but due to high amount of load and issues, even 3PL are helpless and clueless when it comes to booking the carrier for the load. They tend to charge high and here company tries to utilize its all the resources book the lowest carrier on time.

Investing in infrastructure and delivery options will ease this, and is leading to exploration of alternatives to traditional delivery. For instance, drones have started playing a huge role in the supply chain industry. This would highly impact the trucking industry, as drones could be the future for delivering goods.

5. Increasing numbers of partnerships to reduce logistics costs

The aim of any company’s logistics strategy is to minimize the freight cost and provide highly efficient service. Partnerships will often not only help to reduce the costs, but also minimize the risks associated with shipping cargo. In some cases, an effective partnership can also decrease delays in delivery and enhance customer value and satisfaction.

In international markets, companies are trying to find partners that use innovative digital solutions which will help them to seek new opportunities. Increasing forecast accuracy, reducing inventories by using JIT (just in time) system, gaining new, more accurate delivery ETA estimates and decreasing the amount of required administrative work are a few of the crucial areas businesses aim to address through partnerships.

6. Will tariffs reduce business competition?

New trade disputes are impacting operations as well. Due to Trump’s new tariff policies, B2B and B2C supply chains alike are greatly affected. Retailers are worried about the how rising tariffs will escalate prices and reduce consumer demand. In some instances, this could leave fewer businesses still able to compete and may even result in a monopoly in particular industries.

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With e-commerce taking an increasingly bigger chunk out of retail sales, (currently about 10%), the last mile has grown in importance as a competitive advantage. Shippers and carriers alike are eagerly looking for ways to please customers while keeping costs down. In fact, according to some estimates, 30% of the total cost of all goods delivery is in last-mile.

Customers get even more demanding

Today’s customers are on the go and not as willing to sit around waiting for a delivery. Thanks to Amazon’s Prime subscription service, the accepted 5-7 day delivery time period has been reduced a new norm of 2 days. Even that is quickly being reduced further to same-day, and in some locations, one hour delivery.

According to the UPS Pulse of the Online Shopper  survey and analysis, speed is important with 77% of survey respondents willing to pay for expedited shipping. Forty-one percent of survey respondents indicated they had ordered a product for same-day delivery. The importance of same-day delivery is evident in that 58% of those surveyed said the ability to search by items available for same-day delivery is important when selecting products online. In addition, 36% said same-day delivery is important when deciding to shop with a physical store. This was up from 31% in 2016.

Shippers and carriers alike are addressing the ever-shrinking last mile by offering options besides the traditional home including lockers, in-store pick-up and pick-up in third-party stores. In fact, UPS’ study found that 52% of online shoppers were interested in shipping to alternative locations.

“Ship-to-store” is a popular choice with 50% of online shoppers having used this option and noting that speed and convenience are important success factors.

Getting there faster

In some situations, the delivery person is being replaced by a robot or even a drone. For example, Starship Technologies is launching 1,000 delivery robots on U.S. and European university campuses for food delivery. A number of carriers, shippers, and others are testing drone deliveries. 7-Eleven has partnered with Flirtey for drone deliveries in the state of Nevada. In addition, Zipline has deployed drones in Africa to deliver medicines in remote locations. Also, Chinese e-commerce providers, Alibaba and JD.com are using drones to deliver in rural areas of China.

Not only is the delivery person being replaced by a robot or drone, but the traditional delivery companies such as DHL, FedEx and UPS, are facing increasing competition from firms such as Amazon and JD.com. These e-commerce providers are building out their own global logistics network and could potentially rival the integrators, DHL, FedEx and UPS.

The growing number of delivery options definitely indicates the importance of the customer. Indeed, the customer is in the driver’s seat and expects customization – not only in the products that are purchased but also in delivery decisions. Customers now expect to have options from the delivery time, to where the product is to be delivered to even tracking and managing the shipment while en route.

Tracking technology grows up

Gone are the days in which a customer was expected to phone a customer service representative to ask the status of an order.

With the advent of the internet, tracking technology made it easier for customers to know more about their shipment status. But still the technology lagged in timing. Today, tracking is available in real-time with little if any lag time. Some carriers such as DPD and even Amazon offer customers the ability to view actual delivery stops in real-time, online.

Apps from FedEx and UPS allow customers to not only track shipments but also offer a host of other options, including the ability to change delivery locations to leave with a neighbor or a different location while the package is out for delivery.

The customer is in the driver’s seat

The customer is in control of their shopping experience, from selection to purchase, all the way through final delivery or pick-up. Carriers and retailers will need to monitor customer behavior as well as their own costs in order to stay one step ahead of expectations and to remain competitive in a tight industry.

The post The “last mile” is getting faster as it gets more complex appeared first on Trade Ready.

For thousands of years, deliveries were made either on foot, or with the assistance of a horse or a ship. Then trains, automobiles, and planes came along and radically changed things. In the past 100 years, deliveries were able to be made faster, safer, and more efficiently than at any point in history.

However, deliveries are now going through yet another stage of development, and innovation is changing shipping again. Here is a look at some of the newest and most innovative delivery methods that companies are trying now.

1. Drones to fill the skies

Drones – unmanned flying machines that can be piloted by a person on the ground or guided using software – are among the most hyped new shipping technologies. A number of companies have already begun using drones to make deliveries.

In fact, in March 2017, Amazon made its first official drone delivery through its new “Prime Air” delivery service. The delivery consisted of a bottle of sunscreen and was sent to people at a conference in Palm Springs, California. The drone flew in, dropped off the package successfully and flew out without any issues. The online retail giant is a known pioneer and a trendsetter. So if Amazon starts heavily relying on drones for deliveries, there is a good chance that many others will soon follow suit.

Amazon is just one of many companies who are experimenting with drone delivery. Some other companies who are experimenting with drone deliveries include Domino’s Pizza, Mercedes, the Ukrainian Postal Service, and Workhorse.

The fact that so many famous brands are starting to use drones means that everything from pizzas to diapers to clothing could soon be flying through the air in high volumes.

It may soon become as commonplace to see drones flying through the air as it is to see cars driving on streets.

One of the key reasons why companies are starting to adopt drone technology is because they do not require drivers on the roads to move goods from point A to point B. This can help save companies a lot of money on delivery costs.

This is great news for companies, but potentially bad news for deliver drivers. However, despite the fact that many delivery driving jobs could soon vanish, many new job opportunities related to drone deliveries could soon arrive.

2. Driverless cars in beta

Driverless cars are another unmanned and automated approach to delivery that companies are beginning to experiment with. Domino’s again is involved with this exciting delivery innovation. On August 30^th, 2017, Domino’s started to experiment with self-driving pizza deliveries in its own hometown of Ann Arbor, Michigan.

Domino’s has partnered with Ford to use self-driving Ford Fusions to deliver pizzas to people around the city without drivers.

Because there are no drivers, no tips are required. To receive their pizza, customers have to walk up to the car and enter a four-digit code. After they enter the code, the back window roles down, and they can get their pizza out of a special heated container.

Domino’s is not the only company testing out driverless vehicles for delivery purposes. In fact, Ocado Technologies and Oxford University in England are working in collaboration to test small self-driving vans for grocery deliveries in the crowded streets of London. Oxford University is trying to create a car that will be emissions-free, in addition to delivering groceries autonomously.

3. One-hour delivery coming to your city, town or village

One-hour delivery, where possible, is extremely fast and can eliminate the days or weeks of shipping time that are often required for items purchased online.

Amazon is again leading the charge for one-hour delivery. The company now offers one-hour delivery in select major cities all over the U.S. and now into the UK and Canada for its Amazon Prime members.

Although this service is only available in a small number of cities, this amount will soon grow. This is especially true considering the fact that Amazon will be using drones more and more. Drones are not subject to traffic jams like cars are, so they have the potential to increase the speed at which items can be delivered. This is partially because drones can fly straight from point A to point B in many cases, barring buildings or other obstacles, since they do not need to follow winding roads.

So, essentially, drones could help bolster Amazon’s one-hour delivery and help to expand the service into suburban, or even rural areas.

Speedy one-hour shipping may become more common as other shippers and retailers try to keep pace with Amazon.

Revolutionizing the entire shipping industry

Between Canada and the United States, billions of packages are shipped every year. In today’s economy, customers want packages shipped faster, cheaper, and more efficiently. Delivery companies also want to reduce their delivery costs, while optimizing efficiency. The drive to create new delivery solutions is pushing companies to innovate at an impressive pace.

Delivery innovation is occurring so fast that five years from now the delivery landscape could look entirely different. Drones and self-driving cars could will automate vast portions of the delivery niche, while one-hour deliveries could make standard 5-7-day shipping periods look obsolete.

Amazon and Domino’s are two companies who are leading the charge for better delivery. This is not surprising considering that shipping is a key aspect of the business models for both of these businesses. In fact, Domino’s delivers more than 1.5 million pizzas every single day! The amount of packages that Amazon ships each day is very similar: roughly 1.6 million.

As these two major companies continue to innovate to reduce costs and improve shipping efficiency, the entire transport industry could change. The extent to which these new innovations will succeed and how much other companies follow suit is yet to be determined. But there is a high expectation that their innovations will be successful, and that many other companies will follow in their path.

Has your company changed the way you deliver goods? What will the next great shipping innovation be? Let us know in the comments below.

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High tech is here

Same-day delivery is here. Drone delivery is here. Today’s consumer demands instant gratification, and the idea of searching on a mobile phone for a product from anywhere, buying it with the touch of a button, and having it delivered to you that very same day is inching closer to the new normal.

Online shopping for countless products could now become even simpler than (and almost as fast as) ordering a pizza for delivery.

Revolutionary logistics management

Retailers like Amazon are leading the way in this revolution of e-commerce logistics. But you don’t have to have a billion dollar revenue scheme and an army of drones to take advantage of this e-commerce trend. We are also seeing other alternative logistics management strategies, such as using small showrooms allowing customers to interact with a product before buying it online, and designated drop-off points. These smaller stores also help large chains expand their reach by making their products more easily accessible to a larger consumer population.

Some e-commerce businesses are even partnering with rideshare services such as Uber instead of relying on traditional package delivery companies. And, of course, there are the drone deliveries, which are being tested in select locations this year.

In the following infographic we can observe that to buy different types of products online it is important that the delivery process is carried out immediately for users in the United States, China, and Germany.

Blockchain technology for online payments

Blockchain is still on the cutting edge – so much so that many people are only hearing this buzz-term for the first time in 2017. But there are signs that this will be the year that blockchain technology becomes more widely implemented for e-commerce online payments.

You may be familiar with the cryptocurrency Bitcoin which is traded through blockchain, essentially a cheat-proof ledger that authenticates and monitors financial transactions. People who have adopted this cryptocurrency appreciate the fact that the blockchain creates a secure and decentralized control system. The blockchain record is traceable and permanent, making it more transparent than traditional payment systems. Each unit of Bitcoin currency has a digital paper trail that follows it for its entire life through the blockchain.

More and more e-commerce websites are choosing to accept Bitcoin currency as a form of payment, and the trend is even expanding its reach into brick-and-mortar stores through Bitcoin enabled POS terminals. For businesses whose brand image centers around social responsibility, using a blockchain system could allow customers to track the product they are about to buy, from source materials to the e-commerce store.

Advances in virtual reality and augmented reality

Artificial intelligence isn’t the only technological development that is shaping e-commerce. Virtual reality and augmented reality will be playing an increasingly important role in 2017. These technologies are already taking the gaming world by storm (e.g. the Pokémon Go phenomenon), but there is absolutely no reason for VR and AR to be limited to a single industry like gaming.

Believe it or not, it may soon be possible to shop online using virtual reality. For example, a store based in VR, where customers just have to move their head in order to buy an item. Customers would get the in-store shopping experience without having to leave home, with the benefits of feeling as if they are able to see, touch and interact with products in real life. This is likely to be a reality by the end of 2017.

Augmented reality, on the other hand, promises to give customers greater confidence when shopping online by allowing them to virtually try the product before purchasing it. Imagine Pokémon Go, everyone’s favorite AR game that lets you see fictional creatures in your real-life environment, and extend that to any experience where you would want to see how something looks in real-life surroundings.

This chart illustrates the market size of AR / VR prediction software for different sectors in 2025.

What does 2017 have in store for e-commerce?

It’s almost impossible to say with certainty where technology will take us by the end of this year. We don’t have any historical precedents for what is happening with e-commerce and the digital revolution to be able to make any sure-fire predictions. The positive feedback loop between consumers and e-commerce technology appears to be following in the footsteps of technology itself, developing at an exponentially faster pace as time goes by.

Already, we are seeing changes that would have been right at home in a science fiction novel just five years ago.

Packages delivered by drones the same day you order them online? Walking through a store while sitting at home on your couch with a virtual reality headset on? All of these new e-commerce developments are impressive enough in their own right, and even more so when you consider that online shopping has only been mainstream for less than 20 years.

Whatever the trends may be this year, or next year, there seems to be an inevitable destination: the merging of the digital and physical realms, giving consumers the best of both worlds.

Catch part 1 and 2 of this series to view all 10 trends revolutionizing e-commerce in 2017.

The post The future is here! How e-commerce will continue to revolutionize retail in 2017 (Part 3) appeared first on Trade Ready.