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Overview
With the unprecedented rise of social commerce and Ecommerce companies, customers and businesses alike have often wondered how online logistics work.
Online businesses of all niches require the constant assistance of Ecommerce logistics providers to scale their business & reach millions of customers. Ecommerce businesses need more effective logistics solutions to handle increasing volumes, with millions of customers now preferring shopping online.
Introduction to Ecommerce Logistics
Ecommerce logistics and courier companies work by providing shipping, packaging, and picking services to online stores.
They also offer many other shipping services to 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 delivery stages, 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. Every stage of the delivery process is subject to complexities and difficulties, from when an order is placed until the customer finally receives it. A shipment must cross five major milestones 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!
How does Ecommerce Logistics work in India?
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 enabled easier shipping for businesses and enterprises.
But the massive growth of eCommerce and social commerce in the past decade. It 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 optimize fulfillment and enhance every customer’s post-purchase experience. These stages are:-
1) Inventory and Warehousing
Inventory management is an integral part of order fulfillment and is a huge part of eCommerce logistics work. In this part of the process, systems ensure that the products sold on the ecommerce platforms are available.
They trigger a process that allows businesses to ready an order for dispatch as soon as it is placed.
Most logistics companies offer warehousing services where stocks of items can be stored and quickly picked up by their delivery agents. A logistics company provides eCommerce clients with extensive warehouse & inventory management solutions.
You can use WMS (Warehouse Management) and OMS (Order Management System). Logistics providers can store the seller's orders in various warehouses in their targeted geographies. A WMS and OMS can record inventory, keep track of incoming and outgoing items, and 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 on a real-time basis.
2) Manifestation and Pick Up
Once your stock is stored in a preferred storage location, you will have to deal with receiving an order from your clients. This includes order picking and packing and the generation of shipping labels. 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.
The time required for the manifestation depends on the kind of eCommerce logistics provider you choose. This process is typically complicated for many orders across multiple logistics partners. ClickPost lets you integrate with a single API that automates all these activities.
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 safely transports the order to its final destination.
Most logistics partners maintain their fleet of trucks. Others may outsource their vehicles from other transportation and trucking companies. Many, like Blue Dart, offer the 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 delivery speed and cost.
The tracking services used by the logistics company can also make a difference in customer experience. Real-time tracking updates using tech-enabled solutions can keep customers excited about their orders, even if delivery has just begun. Some eCommerce logistics companies like FedEx make use of temperature-controlled fleets. FedEx also has permission to transport dangerous and inflammable goods.
4) Last Mile Delivery and Delivery Exceptions
The last mile of delivery is the final stretch in the transportation services provided by logistics companies. This stretch 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. It also 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 delivery delays. When shipments are stuck at ports due to customs or other issues, carriers and ecommerce platforms need to address it as soon as possible.
At this point, real-time tracking can help you keep customers informed and updated on delays. This makes them less likely to cancel the order if they cannot track it or if it doesn’t arrive on time. When delivery attempts fail on the initial try, they are labeled as NDRs (non-delivery reports).
5) NDR Management
A logistics company that maintains a good NDR management system can be beneficial 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 correct data is immediately collected. These data points increase the success rate of the redelivery attempts and reduce the RTO percentage.
6) Returns Management
Reverse logistics is as essential 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 come into play regarding 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 back end 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) when the returned order is picked up. This ensures that the correct undamaged product is being produced. A logistics company with an established returns management system provides a majority of returned orders, if not all, back safely at their origin warehouse.
Final Conclusion
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 orders placed with them.
However, for eCommerce logistics, the scope of services goes far beyond this. eCommerce logistics companies must properly use the latest technological advancements to make their solutions the most efficient.
Since eCommerce caters to such a large group of demanding and excited customers, simply delivering the product is insufficient. Customers want to be able to easily track their orders and receive proactive updates from the ecommerce company they purchased from.
Proper management systems for inventory, order creation, tracking, NDRs, and returns can ensure that logistics partners make the entire process transparent to you and your customers.
Ecommerce logistics providers 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.
FAQs
1) Should you consider an ecommerce logistics company for your retail platform?
Ecommerce logistics services are specially catered to improve the delivery experience, which is vital to an ecommerce company.
The services like Order Tracking and Automated Order Manifestation allow you to improve your order management system. Along with this, Notifications and tracking APIs allow you to enhance the post-purchase experience.
2) How does the Ecommerce influence in the current market affect the logistics trend?
Ecommerce has seen exponential growth in recent years. The delivery experience and its improvement over the year have been crucial factors.
This has been possible as the logistics company decided to tweak and cater its services to serve this meta-changing shopping experience.
As a result, the ecommerce and the logistics sector are now dependent on each other to foster their growth and allow their respective supply chains to reach the maximum potential.