A picture can be worth a thousand words.
But sometimes numbers tell an even more compelling story.
Following are statistics from recent logistics and fulfillment studies, along with our take on what this data might suggest about how you manage fulfillment and how you work with eCommerce fulfillment 3PLs.
Percentage of online sales growth in the United States since this time last year (Adobe Analytics)
Our take: This is a marked contrast to the 11% and 15% growth in U.S. eCommerce sales in 2018 and 2019 (source: 2020 State of Logistics Outsourcing). And it’s all due to COVID-19, which obviously isn’t over yet. Don’t be surprised if these increases inspire more companies to increase their use of logistics outsourcing (or try it for the first time) in order to stay on top of the additional demand, especially as the peak online shopping season gets closer.
Percentage of parcel shipping growth in May 2020 vs May 2019 (Convey)
Our take: The rise in eCommerce orders has, not surprisingly, driven a huge increase in parcel shipping volumes, and many parcel carriers are scrambling to keep up. Be sure that your company carefully vets any potential 3PL fulfillment partners with parcel handling and shipping proficiency in mind. Not all 3PLs bundle parcel management with their warehousing-related services. Since shipping is by far your biggest fulfillment expense, it makes sense to have a parcel shipping expert on your side.
Amount of warehousing square footage currently under construction (CBRE Industrial & Logistics Report; AT Kearney Analysts; CSCMP’s 2020 State of Logistics Report)
Our take: This sounds like great news until you consider that most of this space is already spoken for or is destined to be snapped up almost as soon as it’s ready. No matter how fast developers are building DCs, warehouse absorption rates remain super-high. In light of this, don’t wait too long to search for additional fulfillment space in your current or new eCommerce fulfillment market of choice.
Estimated percentage of eRetailers who outsource fulfillment, either fully or partially (DHL)
Our take: Outsourcing to eCommerce fulfillment 3PLs is on the rise because eRetailers want to focus on growth without having to build, fund and manage the significant infrastructure (buildings, systems, trained workforce) that’s required to deliver world-class fulfillment. Some companies work with several 3PLs, while others work with a single partner with a nationwide fulfillment network.
Current size of the U.S. truck driver shortage (American Trucking Association)
Our take: We know what you’re thinking: “I’m an eTailer, so what does this have to do with me?” Actually, plenty, because before you can ship your goods out of a fulfillment center, you first have to get them shipped to that fulfillment center. So be sure to factor this into your 3PL selection criteria. A reliable and scalable eCommerce fulfillment 3PL may be able help you tap into well-established carrier relationships and additional capacity.
Percentage of U.S. eCommerce sales that Amazon is currently responsible for (CSCMP’s 2020 State Of Logistics Report)
Our take: How could we not include at least one statistic that pertains to the market’s biggest eTailer, especially since it bills itself as a 3PL? But here’s the thing: Just because you’re selling on Amazon doesn’t mean you have to rely on Amazon to be your warehousing and shipping partner, too – even if you’re selling to Amazon Prime members. Thanks to Seller-Fulfilled Prime you can still participate in the Prime program and display the highly coveted Prime badge while fulfilling orders via a 3PL or your own warehouse instead of Fulfillment By Amazon (FBA), the company’s fulfillment arm. And lately, there have been quite a few added reasons why you might want to consider alternatives to FBA.
Percent that eCommerce logistics costs are rising annually (Armstrong And Associates Report: eCommerce Logistics in The United States)
Our take: Until 2020, this cost uptick was outpacing the growth of eCommerce revenue. When costs are growing faster than revenue, that’s never good. Make sure any 3PL you’re working with is fully committed to delivering savings for your company, not just delivering the goods. (And for some great ideas about doing this, check out Amware’s A- Z guide to eCommerce cost-cutting.) Your bottom line will thank you.