Digitalization has made e-commerce an important part of the global consumer market. According to a US research firm Forrester forecast, e-commerce will grow from $4.4 trillion (about HK$34.4 trillion) in 2023 to $6.8 trillion in 2028. The booming e-commerce market has also driven a sharp increase in the demand for e-commerce logistics services. Want to understand more about the operational process of the e-commerce industry? The following article will introduce the common e-commerce logistics models, analyse the e-commerce logistics process, and recommend a quality e-commerce logistics company.
Common E-commerce Logistics Models
Common e-commerce logistics methods include self-built logistics, courier delivery, third-party logistics (3PL), and cross-border e-commerce logistics. E-commerce companies can choose different logistics solutions based on their business characteristics and development stage.
Self-built Logistics Model
The self-built logistics model refers to e-commerce companies investing in and establishing their own warehousing, transportation, and distribution facilities and systems, controlling the entire logistics operation. This model allows e-commerce companies to have better logistics control and flexibility. It can be optimised and adjusted according to business needs. However, it also requires a large investment of human, material, and financial resources, and higher demands on the company’s resource integration capabilities.
Courier Delivery
E-commerce companies print their own logistics labels, organise the product packages, and then cooperate with large logistics companies to deliver the goods to consumers. The advantage is that the delivery volume is relatively stable. However, traditional logistics companies have fixed pickup and delivery times, and goods need to take longer to reach the consumer.
Third-party Logistics (3PL) Model
The third-party logistics model refers to e-commerce companies outsourcing part or all of the logistics links to professional third-party logistics companies, which provide full-service logistics services such as warehousing, transportation, and distribution, improving efficiency. This model allows e-commerce companies to focus on their core business without worrying about logistics.
Cross-border E-commerce Logistics Model
Cross-border e-commerce logistics can provide e-commerce companies with one-stop logistics services such as overseas procurement, customs clearance, warehousing, and distribution. This model can help cross-border e-commerce sellers expand overseas markets and achieve efficient product circulation. It also requires the logistics company to have professional capabilities such as overseas warehouse networks and customs clearance.
E-commerce Logistics Process
Regardless of which e-commerce logistics model is adopted, the basic e-commerce logistics process generally includes the following steps:
Order Integration
After receiving the consumer’s order, the merchant integrates and classifies the orders according to the order time, quantity and type of goods, and delivery method, and prepares the list of goods to be shipped.
Inventory Management
Allocate goods from the inventory system based on order requirements to ensure timely delivery.
Sorting and Packaging
Package the goods and arrange logistics distribution according to the delivery route.
Last-mile Delivery
The logistics service provider completes the last-mile delivery from the distribution centre to the consumer’s delivery location.
After-sales Service
Provide services such as shipment tracking and returns/exchanges.
Each link in the e-commerce logistics process is related to the overall logistics efficiency and requires close cooperation between e-commerce companies and logistics service providers to jointly optimise the process.
How to Optimise E-commerce Logistics Delivery Efficiency?
Excellent e-commerce logistics delivery efficiency can not only reduce the company’s costs but also improve customer satisfaction and significantly enhance the company’s competitive advantage. To optimise e-commerce logistics delivery efficiency and help companies increase sales, the following suggestions can be considered:
1. Upgrade the Warehouse Management System
Through intelligent warehouse management systems, providing real-time inventory status, and realising paperless and automated warehouse environments, can help improve inventory transparency and accuracy, and increase productivity.
2. Utilise Smart Warehouse and Delivery Technologies
E-commerce companies can also consider using smart technologies, such as introducing automated guided vehicles (AGVs) to handle the shelving, picking, and unloading processes. This not only helps reduce human errors, but also further improves the efficiency of warehousing, transportation, and delivery.
3. Strengthen Cross-border Logistics Collaboration
For cross-border e-commerce companies, it is recommended to work with cross-border logistics companies with overseas warehousing and customs clearance services to ensure the smooth flow of cross-border goods.
Recommended E-commerce Logistics Company – U-Freight, Your Trusted E-commerce Logistics Partner
As a leading international logistics company, U-Freight provides one-stop freight forwarding, logistics management, and e-commerce logistics solutions. With rich industry experience and a professional service team, we create more efficient and intelligent e-commerce logistics services for you. Our advantages include:
One-stop Logistics Services
We provide a full range of e-commerce logistics services, including freight forwarding, warehouse management, and last-mile delivery, to meet your needs from procurement to delivery.
Smart Logistics Technology
We have pioneered the introduction of autonomous mobile robots (AMRs) technology, seamlessly integrating it with our intelligent logistics management system to strengthen e-commerce order delivery operations. AMRs can automatically receive order information and complete product transportation, significantly improving picking and packing efficiency.
Global Logistics Network
Leveraging our global logistics network and strong cross-border logistics capabilities, U-Freight can provide you with comprehensive cross-border e-commerce logistics services, including overseas procurement, customs clearance, warehousing, and distribution. Regardless of your target market, we can build a stable and efficient cross-border supply chain to help you rapidly expand your global business.
U-Freight will use its quality service and advanced technology to help customers stand out in the highly competitive e-commerce market. Contact us immediately to get a quote and create a new future for e-commerce logistics together!
