LTL to Benefit from eCommerce Growth

The growth of eCommerce in the 21st Century has had an impact on many different aspects of our personal and professional lives. eCommerce has profoundly changed the way we shop and has changed our expectations regarding the time required to deliver goods to our homes and businesses. It has also opened up a world of possibilities when searching for products. We are no longer constrained by location but can make purchases online, widening our options concerning selection and price.

The Rise of eCommerce

Savvy entrepreneurs saw the potential changes that the Internet provided to the traditional practice of buying and selling conducted by retail establishments. Suddenly, a company’s products could be seen and made available to an exponentially larger pool of potential consumers. This bonanza of new customers led to a proliferation of online stores where shoppers could browse at their leisure in the pursuit of interesting products or bargain prices.

It’s almost hard to remember what shopping was like before the advent of eCommerce. As a society, we have become accustomed to the convenience of reaching for our smartphone or laptop and querying Google to search for the exact product we are trying to obtain. We are then presented with options from online giants such as Amazon or eBay as well as many smaller enterprises that have found a way to compete by eliciting our mouse clicks.

According to digitalcommerce360.com, U.S. online retail sales grew at a faster rate in 2017 than it has at any time since 2011. Sales generated by eCommerce sites are responsible for 13% of total retail sales in 2017. Online sales also account for 49% of the growth in all retail sales, led by Amazon. In 2017, U.S. consumers spent over $450 billion for retail purchases made on the web.

Many other aspects of modern life are affected by the rise of eCommerce. Rather than just giving the shopper more product options, online shopping has made it possible for those with no access to transportation to have goods delivered directly to their homes. They are no longer dependent on obtaining a ride to get to the store but do need to have someone deliver their purchase.

Every online purchase implies that a delivery is required to complete the transaction. Therefore, the growth of eCommerce has had a correlating impact on the shipping industry. More online sales means more shipments that need to be delivered. Less than truckload (LTL) freight shipping has been affected more than some other forms of shipping due to the types of products that dominate the eCommerce market. The majority of items purchased through eCommerce are small and can be handled by LTL shippers.

How LTL Benefits from the Growth of eCommerce

These factors align to produce an environment in which LTL shippers can take advantage of eCommerce and increase their profits. Let’s take a look at some specific ways that the growth of eCommerce benefits LTL shippers.

Higher Demands for LTL Services

When companies like Amazon started offering free shipping for online purchases, Parcel providers such as UPS and FedEx saw an immediate increase in demand for their services. The only economically feasible way to deliver the small parcels that dominate eCommerce is through Parcel shippers. But, LTL saw a spike in demand as well. Take Amazon Prime Day, for example, retailers were not allowed to participate in Amazon Prime Day unless their products were in an Amazon Distribution Center prior to the day. LTL spiked heavily in the weeks prior as retailers scrambled to get their goods to Amazon DC's.

Efficient inventory management is a necessity in the world of eCommerce retailing. Properly stocking distribution centers allows the speedy delivery that consumers expect when purchasing goods online. Online retailers are partnering with LTL shipping firms that can provide delivery and distribution services. This provides forward-thinking LTL companies with a myriad of opportunities to streamline their procedures and attract new clients who sell their goods online.

Taking Advantage of Technology

Big data is a major trend in the global LTL market, according to businesswire.com. There is an incredible amount of data that is generated by online shopping and its associated delivery and inventory demands. Processing and understanding this wealth of data can lead to better resource utilization and optimization. Proper use of this technology can give LTL shippers an advantage over their competitors that should not be ignored.

The Omnichannel Supply Chain

Customers are demanding the ability to purchase and return items in any manner they desire. Coordination of these demands and providing the timely and flexible shipping that is required to fulfill them presents opportunities for LTL shippers to expand their business. Returns are never going to demand full truckload shipping, opening a new income stream for LTL shippers.

Last Mile Delivery

When goods are palletized and shipped in bulk, the last mile delivery may well be to a warehouse or a facility equipped with a loading dock. This kind of delivery is perfect for full truckload shipping. On the other hand, eCommerce deliveries often terminate at an individual’s home or office. This demands the services of smaller and more mobile trucks that are often incorporated into the fleets of LTL shippers.

These are some of the ways that eCommerce will benefit the LTL shipping industry in the next few years. There are no signs that the growth of eCommerce will slow down, making this an opportunity that LTL shippers should use to their advantage.