Is Logistics Next Billion Dollar Source for e-Commerce Companies ?
The global shipping market, including ocean, air, and truck freight, is a $2.1 trillion market, and retailers are jumping in.
In order to control costs that are being driven up from increased e-commerce demands, many companies, both pure play e-commerce and large retailers are looking into how they can handle more of their own shipping.
BI Intelligence looked at this trend and issued a report recently. Here are some of the key points from the report:
- Transportation and logistics could be the next billion dollar opportunity for e-commerce companies. The global shipping market, including ocean, air, and truck freight, is a $2.1 trillion market, according to World Bank, Boeing, and Golden Valley Co.
- There is much at stake for legacy shipping companies, which have seen a boom in parcel delivery as e-commerce spending has risen. Twenty different partners currently share the duties of shipping Amazon’s 600 million packages a year, with FedEx, USPS, and UPS moving the most.
- Amazon, Alibaba, and Walmart have so far focused on building out their last-mile delivery and logistics services but are increasingly going after the middle- and first-mile of the shipping chain.
- Amazon has already made major moves across each stage of the shipping journey. It launched same-day delivery service, which it handles through its own fleet of carriers, cutting out any third-party shippers. The company also recently began establishing shipping routes between China and North America.
- Walmart’s interest in expanding its transportation and logistics operations is almost purely related to cost-savings. It’s begun leasing shipping containers to transport manufactured goods from China and is making greater use of lockers and in-store pickup options to cut down on delivery costs.
- Alibaba has begun leasing containers on ships, similar to Amazon’s Dragon Boat initiative. This means that Alibaba Logistics can now facilitate first-mile shipping for third-party merchants on its marketplace.