The rise of e-commerce companies like Amazon, Overstock, Alibaba, and eBay has had a significant impact on standard shipping practices, according to industry expert Victor Restis.
With the onslaught of e-commerce companies hitting online shopping with full force over the last ten years, shipping has changed almost overnight. These companies are using more efficient shipping methods to move more products and at far less cost per pound. The traditional bricks-and-mortar retailers are feeling the pressure to create their online presence for this very reason.
But it’s not just e-commerce companies that are changing the way we ship; Restis says other major forces like Amazon, Walmart, and Alibaba are affecting traditional shipping practices as well. For example, these companies have found ways to take over markets by offering free shipping on all orders or providing additional incentives like discounts if the customer agrees to use their services over standard carriers. Another trend has been ‘reverse logistics,’ where many customers order products just because of guaranteed quick delivery times even though they don’t need them right away.
For example, Amazon is establishing itself as a logistics company. They buy inventory upfront, ship it to their distribution centers, store it, and then when an order comes in for, say, a Sony TV, they pull the product from the warehouse of one of their suppliers. Then, they package it up with all of the necessary materials like manuals, etc., make sure everything is correct, print off the label and schedule a time for pickup, among other things.
There are several factors why companies on this scale have put pressure on traditional shipping methods. First, these companies have built massive automated warehouses which minimize or eliminate the need for human labor, which allows them to operate at a massive scale and provide goods and services at prices that just can’t be matched.
With e-commerce companies dominating online shopping, they also dominate traditional carriers, namely the major shipping companies like FedEx, UPS, and USPS. This is having a significant impact on how we ship products around the world. For example, increasingly large cargo ships are being built because electric vehicles have increasingly replaced petroleum-powered vehicles. Diesel trucks still exist, but their numbers continue to dwindle as more people use electric cars and other forms of transportation like Uber and Lyft. In addition, the cost per pound of shipping has gone down significantly with recent advancements in technological products like mobile phones and tablets.
Even faster delivery speeds have been realized with new developments in the drone industry. Several companies have found ways to utilize drones for various functions, including shipping and deliveries, which seems natural. Drone companies are working with commercial and military to speed up transport times by delivering materials quickly from one location to another. But it’s not just about being able to deliver fast; drone technology could eventually eliminate the need for expensive warehouses altogether. Drones would be able to move items from one location or, say, your house directly into your driveway – this could potentially cost big savings on storage costs as well as cut out middlemen carriers completely.