Do you want to know how to overcome the latest logistics issues to get your shipping operations running smoothly?
Efficient e-commerce logistics are the backbone of any online business, and without them, the implementation of online would be severely limited.
The delivery of goods to the customer is the crux of the online sales process. Any hurdles in this process can lead to unsatisfied customers and ultimately harm the reputation and bottom line of the business.
In this article, we will unpack the latest logistics issues and discuss the importance of addressing these and how they impact customer experience, loyalty, and profitability.
Do not let logistics issues slow you down – read on for simple answers to your questions!
The current state of logistics in the e-commerce industry
The pandemic boosted digital commerce but also caused supply chain and production issues.
With the current high inflation rate, buyers are reconsidering purchasing certain products, creating a challenge for online and offline sellers.
Nevertheless, e-commerce growth shows no signs of slowing down. The e-commerce market is expected to grow in the following years: 8.9% in 2023 and even 9.4% in 2024.
More precisely, the global e-commerce logistics market was valued at $235.70 billion and was projected to reach $1,901.97 billion by 2030, with transportation accounting for nearly 70% of the logistics market.
Although there appears to be some hope for the future, it is crucial to determine how to overcome the obstacles of 2023. And, what are the most pressing e-commerce difficulties for this year?
The top 9 logistics issues in 2023
The logistics industry has been defined by natural and human-made disruptions in the past two years. Let’s have a look at the top 9 issues in 2023.
1. Increasing fuel and rising freight costs
Behind the e-commerce growth record, high freighting rates were caused by a spike in fuel prices and the ongoing shipping container shortage.
Transportation costs and the cost of maintaining a fleet continue to rise, and experts predict that they will continue to do so in the foreseeable future.
These factors have contributed to the massive growth in worldwide outsourcing of the shipping function. If you can effectively manage your shipping costs, you’ll be better positioned to compete globally.
Shipping surcharges are particularly nasty and volatile in the current unstable economic climate.
Sendcloud analyzed 700,000 deliveries affected by surcharges and put together a few top tips to avoid shipping surcharges:
- Know your products and their requirements
- Address and place your label correctly
- Choose the right shipping service providers and methods
- Shorten the shipping routes
- Negotiate your shipping contracts
- Automate with Shipping Rules to Reduce Shipping Surcharges
2. Supply chain issues
Port congestion, manufacturing delays, and extreme weather events were significant obstacles for supply chains in 2021 and 2022.
These challenges caused suppliers and manufacturers worldwide to suffer shortages, inventory issues, fulfilment delays, and lengthy backorders for their top-selling items.
Unfortunately, these problems will not just disappear. They are expected to persist into 2023 due to continued high consumer demand for online shopping and the need to catch up from last year’s bottlenecks.
Managing multiple teams, services, and networks effectively is crucial in the highly fragmented logistics sector.
As businesses expand their operations and markets, they must handle more processes and deal with different shipping requirements. Automating these processes is a viable solution.
Utilizing available data can help companies operate from an informed position to address inefficiencies and prepare for potential future challenges, giving them a competitive advantage.
3. Managing customer expectations
The rise in online shopping has led to increased competition and heightened customer expectations.
Today, customers want instant gratification – they expect their parcels and supplies to arrive as soon as possible.
With online businesses like Amazon offering one-hour delivery in some cities, companies are under immense pressure to keep up with demand and stay competitive.
If you provide the same goods at the same price as your competitors, meeting your customers’ demands could be the deciding factor that sets you apart. Meeting those demands should be a top priority for any online business that wants to build customer loyalty and succeed in the long run.
So, what do today’s online shoppers expect?
- Painless purchasing process – a seamless experience with excellent service
- Next-day or even same-day delivery
- Real-time tracking
- Flexible ordering
- Simple returns
Successful e-commerce operations require speed and convenience as key performance indicators.
It is crucial to have a clear communication system between the customer and courier regarding the whereabouts and estimated arrival time of the product.
You achieved this by implementing a shipment tracking system, regular courier updates, and clear delivery instructions from the customer.
4. Labor shortages and inefficient employee management
Despite the increase in wages, logistics operations are still struggling to hire and retain frontline workers worldwide, leading to increased absenteeism and causing a ripple effect throughout the supply chain.
This issue has further worsened due to the already shrinking pool of qualified drivers and dockers, with many opting for early retirement.
As a result, outsourcing to third-party logistics (3PL) service providers has become more prevalent worldwide.
Managing various teams to accomplish the task at hand in the logistics industry is an ongoing challenge. Ensuring everyone is on the same page and working efficiently can be challenging.
To overcome this challenge in shipping functions, there are a few things that can be done:
- Implement a well-defined process that everyone can follow- such as automated labelling
- Delegate tasks effectively
- Provide proper training to employees
- Communicate effectively
Effectively managing employees can go a long way in overcoming logistical challenges.
There are tools and shipping solutions that can help to streamline processes in the warehouse. How? By automating the shipping processes.
5. Damaged goods during transit
Transporting goods always carries the risk of damage during transit, creating headaches for companies on both supply chain ends.
Both parties can agree on how the goods will be stored and handled to reduce the risk of damage during shipping.
Shipping solutions like Sendcloud can be helpful in this regard, as they provide insights on return trends over time. For instance, if you notice that a large percentage of your parcels are being returned due to damage, you can take proactive steps like adjusting your packaging, contacting the courier, or insuring certain items.
By being proactive and using tools like Sendcloud, you can improve your shipping process and reduce the risk of damage to your goods.
To prevent damaged packages during transit, companies can take a few steps, such as:
- Use sturdy boxes and protective packaging to safeguard items during transport
- Create a process for checking the condition of goods upon arrival
- Address any damages instantly to ensure that the customer is not affected
- Ensure that insurance coverage is up to date
- Have a plan in place for dealing with damaged goods
Being prepared for such situations can help create the best outcome for both the sender and the receiver.
6. Incorrect or delayed deliveries
In 2023, online businesses will continue to grapple with one of their biggest challenges: handling incorrect or delayed deliveries.
Even if the delay is not your fault, customers will still hold you accountable, which can be a major headache.
These delivery delays can hurt your business in more ways than one. Not only can you lose out on revenue in the short term, but they can also erode your customers’ trust in your brand over time.
Here are the most common reasons for shipping delays:
- Delays due to inaccurate shipping information
- Shipping delays due to external factors
- Delivery delays due to weather
- Shipping delays for Christmas
- International shipping delays
Manual errors, such as customer addresses while processing orders, can cause logistical issues that result in missed deadlines, delayed shipments, and dissatisfied customers.
One solution to address this challenge is to use shipping software that automates labelling, picking, and packing processes to reduce human error as manual changes are not required.
This increased efficiency to ensure on-time delivery and reduced labelling errors.
Additional tips for e-commerce specialists to deal with shipping delays include:
- Switching between carriers
- Adding pick-up points to your checkout
- Keeping your customer in the loop
- Extending your return period
- Thinking about shipping delay insurance
To avoid late or incorrect deliveries, it is crucial for companies with multiple deliveries to have an efficient tracking system in place.
If you want to keep your online business thriving, it’s crucial to be proactive about delays with your customers.
By communicating clearly and in a timely manner about any potential shipping delays, you can offset the negative impact and maintain your customers’ confidence in your business.
7. Inaccurate tracking
Logistical challenges can be extremely frustrating, especially when you don’t have visibility into the location or expected delivery time of your shipment, particularly if it’s time-sensitive.
Customers demand real-time information about the status of their packages, while dispatchers need to track deliveries and ensure that time-sensitive packages arrive on schedule.
When customers have accurate delivery information, they can plan to be available to receive their packages and avoid missed deliveries.
Inaccurate tracking can be a major headache for businesses and customers.
To keep your business organized and your customers happy, you need a high level of shipping visibility and control.
That’s where Sendcloud comes in – it allows you to monitor all your deliveries on a single platform, providing real-time notifications to you and your customers.
With Sendcloud, you can stay on top of your shipments and ensure that everything arrives on schedule, resulting in happier customers and a more successful business.
8. Reverse logistics
In the past, software solutions for the logistics industry mainly focused on optimizing forward logistics for large enterprise companies.
With the rise of e-commerce, the volume of products being shipped has also increased, resulting in significant challenges such as:
- High warehousing and storage costs
- Difficulty managing returns due to limited workforce
- Lack of standardization in processes and policies leading to increased costs
- Higher emissions, packaging, and waste
The good news is that there are shipping solutions to assist with your reverse logistics needs with purpose-built solutions for e-commerce.
9. Cybersecurity
Data protection remains a critical challenge in the logistics industry, as businesses of all sizes are still vulnerable to cyberattacks. These incidents can result in data loss, corruption, and legal action from clients or partners whose sensitive financial information has been compromised.
One solution is outsourcing IT services to an experienced firm knowledgeable about the latest cyber threats and cybersecurity solutions.
By partnering with such a firm, logistics companies can enhance their data security measures and minimize the risk of cyberattacks.
Logistics: The key to your e-commerce success
Customer retention significantly boosts profits. A mere 5% increase in customer retention can increase profits by 25% to 95%.
However, poor customer experience due to logistics issues can lead to customer churn, with 49% of consumers reporting they have left brands due to poor customer experience in the past year.
Effective logistics management is crucial for the success of any e-commerce business. It not only helps to exceed customer expectations but also ensures competitiveness in the market.
Proper supply chain management allows for on-time delivery, efficient inventory management, cost reduction, increased efficiency, improved customer experience, and increased customer loyalty.
In e-commerce, speed and convenience are key performance indicators for success. Customers expect fast and reliable delivery, and logistics issues can quickly become a barrier to meeting those expectations.
Businesses can meet customer demands and retain their loyalty by addressing these issues.
Overcoming your logistics issues with Sendcloud
At Sendcloud, our goal is to empower online retailers to optimize their shipping journey, from checkout to returns, giving them a competitive edge in the market.
By using our platform, logistics challenges become a thing of the past, and shipping can be turned into an accelerator for your business, providing a seamless and hassle-free experience for your customers.
Sendcloud helps you overcome logistic issues by enabling you to:
- Delight your customers and reduce checkout abandonment with fast, convenient, and affordable delivery options.
- Easily connect and activate multiple carriers through a single solution to skip long and costly integration processes.
- Save time with automated shipping label generation, customs documents for cross-border shipments, and advanced shipping rules.
- Drive customer loyalty and reduce customer service inquiries by providing branded tracking notifications for the best post-purchase experience.
- Create a smooth and efficient returns process, including international returns, with your own branded returns portal.
- Get insights from historical and real-time data based on millions of shipments to stop making delivery promises you can’t keep.
- Add core shipping functionalities to any custom system, WMS, ERP, or marketplace with flexible APIs, saving engineering time and increasing speed-to-market.
Final Thought
Logistics plays a critical role in the success of any business, especially in the e-commerce industry.
By utilizing a shipping solution and outsourcing to experienced firms, e-commerce businesses can stay on top of their logistics challenges and deliver an exceptional customer experience.
Are you an e-commerce business looking to optimize your shipping process and take your consumer experience to a higher level? Then Sendcloud might be the all-in-one shipping platform you’ve been searching for.
Request A Demo and see what Sendcloud can do to overcome your logistics issues.
