Ecommerce was already steadily growing before the pandemic hit. Since COVID-19, it has boomed. According to ZD Net, ecommerce accounted for around 35 percent of all U.S. retail sales in 2020. Experts also anticipate the increase in online shopping to extend far beyond the pandemic. This should not come as a surprise. As a society, we tend to gravitate toward things that simplify our daily lives and shopping online certainly does that – especially with the increase in retailers offering free shipping or two-day shipping options.
But what does this ecommerce boost mean for the less-than-truckload (LTL) sector?
Top 3 Effects of Online Shopping on LTL
Adaptability – The LTL sector had to quickly adapt to the increased demand for ecommerce, and it did so in a couple of ways. Many LTL carriers began final-mile deliveries and increasingly began delivering some bigger products to residences or businesses. Additionally, many large ecommerce retailers are also large LTL shippers, according to Satish Jindel, president of SJ Consulting. As retailers are promising quick delivery, they must ensure their warehouses are stocked. Therefore, they are ordering smaller, less-than-truckload shipments of goods more frequently based on consumer shopping trends instead of large truckload orders.
Improved technology – Consumers of ecommerce retailers are accustomed to knowing exactly where their package is, from order placement to time of delivery, and now, that same expectation is being put on LTL companies because they are increasingly being used for retailers and even for last-mile deliveries. As such, many LTL carriers are investing in technology to allow better order tracking and shipment optimization. The implementation of APIs helps most LTL carriers provide tracking data for multiple shipments in real-time in one easy-to-access platform. The API also allows the retailer to share that same tracking information with their end users. It also helps the LTL carrier, shipper or 3PL optimize the shipping process because they can use the data to determine best lanes, modes and times of day for transit.
New opportunities – In addition to last-mile deliveries, LTL companies are also seeing a surge in returned goods. As retailers offer more options to customers for returning their purchases, getting the product back to a distribution center or warehouse from a brick-and-mortar is opening a new avenue for LTL. Returns will likely never reach a full truckload threshold, so LTLs will be the main option in a lot of cases. Some LTL carriers are also expanding to “white-glove” deliveries, either in-house or through a specialized third-party provider. White-glove deliveries refer to large goods that often require a special skill for delivery and setup – like home appliances or exercise equipment. Additionally, the Custom Logistics and Delivery Association (CLDA) is helping its members integrate and support other modes to help them grow and thrive as ecommerce continues to expand. It will be interesting to see where innovation in LTL goes as ecommerce continues to flourish.
Are You Ready to Handle the Ecommerce Impact?
Companies across the sector that are nimble, efficient, innovative and ready to adapt will thrive in the age of ecommerce. Those that are not may find themselves struggling. The best way to prepare for the future and continuation of the ecommerce boom is to invest in technology. Implementing APIs will help companies become nimbler, provide more data and better track shipments.