E-commerce: Never ending stream of logistics challenges

We’re running out of ways to describe how e-commerce has reshaped the logistics landscape. Nearly every feature we assign over the editorial year contains advice for logistics professionals on how to fine-tune operations through strategy or technology to meet these new, pressing demands.

However, for the last few years we’ve chosen the March issue to go a little deeper into how the ongoing growth of e-commerce continues to influence the various modes, services, and operations practices that make our logistics and freight transportation networks function. We call it our Annual E-commerce Issue.

And, quite frankly, there’s no one better than long-time contributor Brooks Bentz to kick off this annual collection. Through his decades of freight transportation experience—from senior executive posts on the carrier side in railroading, trucking, and 3PLs to his years of consulting at the senior global level at Accenture—there’s little he hasn’t witnessed in the market over the past 50+ years. In fact, he’s had a front row seat to watch every phase of the e-commerce evolution unfold.

“Think about this,” says Bentz. “According to our sources at Boston Consulting Group, the e-commerce market is poised to capture 41% of global retail sales by 2027, up from just 18% in 2017. That tells the story pretty well.”

According to Bentz, while there’s little doubt that e-commerce has already driven significant change in the U.S. economy, every single mode finds itself in a state of continual adjustment.

“That reality has made for substantive change in the patterns of freight handling and has ushered in much more B2C sales, which shifts modes from truck to parcel across a much broader geographic footprint,” he says. “With this new environment, coupled with consistent disruption, we now face a never ending stream of logistics challenges.”

Bentz uses the influence of that front row seat to gather a group of top freight transportation analysts to go mode by mode in an effort to help shippers better manage the “Amazon-sized” task of keeping all of these goods flowing at unprecedented levels.

And while Bentz defines the challenges prevalent across the modes, contributing editors Bridget McCrea and Roberto Michel take us inside the four walls to explore the rapid developments happening in the warehouse management systems (WMS) market and then share the findings of our Peerless Research Group (PRG) survey that offers the most current snapshot of warehouse/DC software, automation and robotics investment levels—the money for the stuff that makes e-commerce work.

McCrea reports that there’s little doubt that WMS innovation will continue to drive fulfillment operations as the software becomes even more intelligent and more intertwined with other applications running the show. “Let’s face it,” says McCrea. “Without an efficient warehouse or DC up and running on an optimized WMS, there wouldn’t be an efficient, profitable e-commerce operation. The warehouse is where the magic happens, and the WMS is the hub of that operation.”

Michel then puts context around the findings of our 2024 Outlook Survey starting on page 40. While the rapid growth of e-commerce during the pandemic saw off-the-charts investment numbers inside the four walls, he reports that spending has cooled a bit as it has become more targeted on doing more with the labor force you have.

“We have to keep in mind that most DC operations are still heavily manual,” says Michel. “So, it makes sense that we’re seeing investments in areas like labor management, voice picking, and goods-to-person robotics continue to be strong because they help drive labor productivity and don’t necessarily require big upfront expense.”