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With the restaurant industry in shambles, the entertainment industry halted, the travel industry scrambling, and mom and pops closing en masse, those in e-commerce might be feeling a little survivor’s guilt. For online businesses, the numbers during the coronavirus pandemic have been like a second holiday season. Not just here in the states, but around the world.
E-commerce is thriving in Thailand, where 95% of people wear a mask in public and the death rate has been 450 times lower than in the US, and the United Arab Emirates where over 90% of consumers have shifted to online shopping during the pandemic.
These numbers may give the impression that it's all roses and sunshine in the e-commerce world, but there's another side to the story. Because e-commerce is impossible without shipping.
COVID-19 Hit Shipping Channels Hard
E-commerce relies on shipping and logistics, and this has been a key vulnerability. Shipping channels were immediately disrupted when COVID-19 struck. Basil Karatzas, CEO of shipping finance advisory and brokerage firm Karatzas Marine Advisors & Co., said in March that every facet of the shipping industry was taking a hit.
“Operations of shipping companies and related industries, including terminals, ports, etc., have been affected due to personnel having been advised to refrain from traveling or reporting to work.”
Karatzas went on to say, “Supply chains and logistics have been affected as well, for instance, we understand that the Chinese trucking industry has collapsed too, as the government has imposed travel limitations, which prevents containers-for-export from reaching the loading dock, and containers-for-import keep piling on the dock waiting for discharging vessels.”
All those containers floating around, piling up, and sailing at only 10% capacity has caused behind-the-scenes problems for e-commerce. And even as markets are recovering in China and elsewhere, research from Statista suggests that in a severe impact scenario, the North American sea and air freight forwarding market is expected to contract by 12.1 and 9.5 percent respectively, compared with the previous year. If e-commerce is the future of retail, we’re going to need to fortify the shipping channels we rely on.
The Next Phase In The Shipping Industry Is A Reinvention, Not A Recovery
“Bringing e-commerce freight forwarding back to normal isn’t good enough, because ‘normal’ was fragmented and inefficient,” says Cheri Wang, CEO of Coshipper. “We need to use this time to reevaluate shipping and innovate our way into a future that delivers with simplicity, transparency and accountability, in a way that’s less vulnerable to structural crisis.”
Wang points to a lack of transparency and accountability as the most problematic issue with traditional shipping. “When something goes wrong with delivery, the customer usually has no recourse. The freight forwarder often passes the buck, and it’s impossible to tell who exactly is responsible for what went wrong.”
Furthermore, she says, the traditional freight forwarding process requires the duplication of data between multiple channels. Wang says communication between the warehouse, the freight forwarder, the consumer, and other interested parties are easily streamlined using existing digital systems. “It saves everybody time and money to do things differently. The time is now.”
Consumers Demand Fast Shipping
A survey of 2500 American consumers found that online shoppers don’t simply want free delivery, they also want their orders delivered quickly. 64.3% of respondents said cost was the most important factor when it comes to shipping, followed by 18.7% who cited speed as the most important.
With Amazon Prime offering some of the fastest and most efficient delivery methods in the e-commerce space, consumer expectations are shifting. 72.7% of survey respondents said they are unlikely to do business with a site again after a poor delivery experience.
“For brands that like to think they aren’t competing with Amazon, the data clearly suggests that shoppers think they are,” said Kirsten Newbold-Knipp, Chief Growth Officer at Convey, in a statement.
It’s easy to click through our dashboards thinking our e-commerce operations exist in a vacuum between the computer and the customer. But they don’t. Our success is dependent upon functional shipping industries, efficient and transparent freight forwarding systems, and the workers on the ground who make delivery of our goods possible. We’re at a turning point. Things look good for the future of e-commerce, and it’s important that we’re using and building systems that work well for everybody involved.
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November 01, 2020 at 07:10AM
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E-Commerce Looks Strong, But We Need To Examine Its Key Vulnerability - Forbes
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