The Amazon Effect is impossible to ignore. By definition, it refers to the impact the juggernaut, and all other digital marketplaces, has had on the retail industry. As online shopping and ecommerce has increased, smaller, local retail stores have suffered. However, more recently, the Amazon effect has traveled all the way down the supply chain. It is now something that nearly every consumer, every retailer and every business has been affected by, including shippers, carriers and 3PLs.
The Impact on the Less-Than-Truckload Sector
Longer lead times. Amazon has made two-day shipping almost expected among consumers. However, with the driver shortage, carrier capacity being very tight and freight volume being very high (thanks to the ecommerce boom), it is increasingly more difficult for truckload and less-than-truckload carriers to meet the demand for a quick turnaround. Therefore, shippers are now building in a longer lead time for their end users because it is better to promise an executable delivery date rather than agree to two-day shipping and not have a carrier available to meet that. As a result, you will build trust, have more control over your supply chain and reduce costs. As an example, one logistics provider “found that costs per load were reduced between 15-19% by providing 2.21 additional notice days from the previous year.”
Tracking shipments. As more and more LTL carriers answer the call to fulfill big-box stores' freight needs, they as well as the shippers need visibility into their freight at all times. This is a direct result of Amazon and consumers “needing” to know when and where their freight is while on its way. Shippers must be able to tell the big-box store who is carrying their freight, where it is and exactly when it will arrive. Historically, this type of end-to-end visibility was not a priority for most LTL shipments, but it is now. Implementing APIs into a transportation management system will automatically provide this visibility and share it between the shipper and the carrier.
Final mile or other specialized freight. More freight has led to new opportunities for LTL carriers. Many have added final-mile to their service functionality to capitalize on ecommerce and retail needs. Some LTL companies are even delivering some bigger or specialized products/freight to residences or businesses. Because a number of large ecommerce retailers are also LTL shippers, they must ensure their warehouses remain stocked and are, therefore, ordering smaller, less-than-truckload shipments of goods more frequently based on consumer shopping trends instead of large truckload order, according to Satish Jindel, president of SJ Consulting.
The Amazon Effect is Here to Stay
With ecommerce’s hold on the retail industry continuing to increase (it held 35% of all retail sales in 2020), the Amazon Effect is not going away. However, the transportation and supply chain industries will adapt to thrive. Visibility into freight will make all the difference for LTL shippers and carriers moving forward. Utilizing freight-pricing APIs that can automate tracking, invoicing and freight bill auditing will help companies continue to adapt to consumer and retailer demands as we work through this ecommerce boom.
Contact Banyan Technology today to learn more about how LIVE Connect™, our volume-pricing API solution, can help your company improve shipment visibility and tracking and ensure transparency to all supply chain partners.