E-commerce: The great accelerator

When we look back on this time in history, we can say with some certainty that the pandemic acted as a great accelerator.

It immediately intensified the pressure on a freight network that was already bursting at the seams, and that in turn accelerated our acceptance of new software and automation necessary to streamline our operations to meet pressing customer demands—in both order fulfillment and delivery—despite shrinking labor availability and capacity.

At the same time, it accelerated the exposure of weaknesses in our current supply chains and forced many to rethink the best way to rebuild their networks due to supplier exits—and for some industries, it even forced a major rethinking of how business is done.

“This tsunami of change will be looked on down the road in much the way other sea changes have occurred, not unlike the industrial revolution or the shift from horsepower to the internal combustion engine,” says contributing editor and long-time supply chain consultant Brooks Bentz. “However, the acceleration of e-commerce will resonate the most when this history is written.”

Starting on page 20, Bentz kicks off our 2021 E-commerce Issue with a broad sweeping look at how the rapid increase of e-commerce orders, fulfillment demands and delivery volumes has affected each mode of our shaken freight network. “At this point,” he says, “the increased e-commerce volume generated by the pandemic has no end in sight—and signals a permanent behavioral shift of an indeterminate magnitude.”

Over the course of his reporting, Bentz spoke to a number of freight industry veterans from all modes in an effort to put the impact into perspective. One of the recurring themes is that the shift in freight will likely keep transitioning away from truckload and intermodal and more toward less-than-truckload (LTL) and parcel—two areas where package volumes are soaring, capacity is shrinking, and rates are skyrocketing.

“That specific shift will also have an impact on how freight cost and reverse logistics are attributed going forward,” says Bentz. “The idea of ‘free’ shipping and the spike in returns volume will be addressed in one form or another, which will only result in rising costs for consumers. Managing returns effectively, albeit costly, is the final frontier in supply chain.”

Without a doubt, the biggest impact of e-commerce has been on the parcel business. Starting on page 26, group news editor Jeff Berman has gathered his annual Parcel Express Roundtable experts to put context around this unprecedented time. “The already highly competitive parcel express market has gone into overdrive,” says Berman. “This has resulted in a much longer peak season, elevated rates, tighter capacity and more challenging service conditions—and our panel sees no end in sight.”

As this year’s panel advises shippers, this is no time for complacency. “They advise shippers to explore every delivery option available to them, from curbside pickup to same-day delivery and everything in between,” says Berman. “And make sure to build relationships with all major carriers as well as the established and start-up regional parcel carriers. Customers want options, and shippers don’t want to be left behind.”

Berman brings the panel together for our 2021 Parcel Express Roundtable Webcast on March 25. Keep an eye on your e-mail for your personal invitation to attend this event.