The following is Part 1 in a series of posts about DispatchTrack’s point of view on the trends that will drive the logistics and logistics technology markets in 2022 and beyond. This week, we’ll be discussing the increasing need for nationwide logistics networks for big and bulky deliveries, and how the market is already shifting to react to that need. You may also be interested in DispatchTrack CEO and co-founder Satish Natarajan’s Logistics Technology Wishlist for 2022.
Before the spike in e-commerce demand, most consumers simply wouldn’t have considered buying a couch online. They’d have gone down the road to a nearby furniture store—maybe a franchise location of a national chain, maybe a mom and pop store—shopped around for a while, and then arranged delivery with a store associate or manager.
At no point would they have to worry that they were seeing something that could only be fulfilled by the stores in Utah and Colorado, but not in California. Sure, they might see something that was out of stock and be annoyed that they had to wait for more inventory, but they weren’t likely to fall in love with a piece of furniture only to learn that it simply couldn’t be sent to them.
Now, of course, that’s all changing. Consumers aren’t interested in the intricacies of your supply chain or your transportation logistics network. They see an item they like on your website and they want to know: how soon can you get it to them? This question is driving a major shift in the way that logistics works.
How Logistics Networks Are Changing in 2022
The ability to fulfill orders nationwide—whether you’re an appliance depot in St. Louis or a boutique furniture seller in Portland, OR—has become a major competitive advantage head-spinningly quickly. Of course, building out a national or international in-house transportation network is a huge undertaking. As a result, third party and fourth party logistics providers (3PLs/4PLs) have been among the fastest to adapt. In the past two years, we’ve seen major trends towards consolidation among logistics players, and that trend is only going to continue in the coming years.
Even since the start of 2022, major players like Ryder have already begun announcing acquisitions. A quick Google News search shows that they’re not the only ones—not by a longshot. Recently, we’ve seen plenty of mid-sized companies being bought up by larger ones, and even some small regional players becoming cornerstones in the fulfillment strategies of giant conglomerates.
Essentially, all these larger logistics businesses are trying to provide the same thing to clients and prospects: the ability to leverage resources all across the nation in a cost-effective way. This enables retailers and other businesses to reach more consumers, more quickly. At the same time, it can create issues of visibility, transparency, and connectivity that aren’t as stark in smaller networks. Ultimately, successful 3PLs and 4PLs will have to overcome these challenges to stay competitive and help their clients thrive. How? By utilizing the right tools, techniques, and technologies.
Challenges in Managing Customer Satisfaction Across Complex Logistics Networks
Let’s go back to the hypothetical from the first paragraph: the folks in need of a couch have turned to e-commerce. They’ve found something they like that’s listed as being in-stock. What has to go right for them to feel like they’ve gotten their money’s worth?
It used to be that the answer was simple—a high quality couch. But nowadays, folks see the delivery experience as an extension of the seller’s brand. This means that in a perfect world, a retailer, 3PL, or 4PL would be able to offer:
- A reasonable shipping fee: No one wants to spend $200 to have a fridge shipped across the country.
- A quick turnaround time: i.e. a few days at most if possible.
- Transparency: The more consumers know, the more they feel empowered. Everything from order confirmations to texts when the order is out for delivery to live ETA tracking helps add to that feeling of empowerment.
- Flexibility: Life happens. Things come up on the day of delivery. You need a way to track and manage exceptions and come up with quick solutions.
- Simplicity: Part of offering a great delivery experience is ensuring that consumers don’t have to wade through too much complexity in order to reach you and get information about their order, before, during, and after delivery.
Many of these challenges are simply scaled-up versions of what a small, local 3PL faces. But the further an order has to travel, the more visibility you need into where it is in the world at any given time to ensure efficiency. The more complex your transportation network, the harder it is to keep logistics costs manageable.
Even offering customers simplicity is something that can come with growing pains. When your transport network has to handle orders from different stores around the country, you have to find a way to give the end customer a way to get delivery information without knowing the ins and outs of your corporate structure and your supply chain.
If someone buys a couch online, they don’t necessarily know or care that they purchased from a franchise location of a particular brand, rather than the home store. When they want to track their order, they should be able to type their order number into a widget on the home store’s website and be directed to their details. But often, this is easier said than done technologically.
How to Scale Your Last Mile Logistics Across a National Network
The national logistics networks that are cropping up now are going to make it possible for businesses across a host of industries to reach more customers than ever before. They’re also going to have some growing pains. Here are a few ways to mitigate them:
- Choose a SaaS-Native Solution: On-premise solutions make it incredibly difficult to scale. But even some cloud solutions aren’t built to grow with your business. Solutions that frequently change hands or that force users to migrate to new platforms can be more trouble than they’re worth.
- Prioritize Visibility and Interoperability: Not only do you want to be able to see where each order is at every step of the last mile at glance when you’re delivering goods in-house—you want to be able to do the same with contractors. No matter who’s actually scheduling the delivery time or driving the truck, you need a solution that can give you visibility into the orders that matter to you with just a few clicks.
- Think in Terms of Partnerships: This applies not just to logistics partners, i.e. 3PLs and 4PLs—or, if you’re a 4PL, 3PLs and retailers—but also to technology partners. If you’re looking for a last mile, delivery management, or anything other kind of vendor, you need someone with a proven track record of being responsive to their customers’ changing needs. The market is changing fast, and you need everyone on your team to be able to keep up.
- Efficient Route Optimization: At the end of the day, visibility, connectivity, and cloud-computing all need to back up actual performance. Make sure you have a routing solution that leverages AI to ensure you can actually meet delivery ETAs, factoring in differences in geography, service type, truck and load differences, and more.
This is an exciting time to be in the business of delivering goods to customers. As nationwide networks become more common, logistics trends are poised to evolve in new and fascinating ways. With the right approach and the right technology, you can be a part of that evolution and serve more customers more effectively than ever.