Various models of logistical services exist in today’s e-commerce market: the Amazon model, e-stores running their own warehouses or using the warehouses of their logistical operators. What are the factors that decide whether a specific model will be the most successful in a given situation?

When commencing their online sales operations, e-store owners must choose a specific model of logistical services that will ensure efficient and effective deliveries based on a clearly-defined role and responsibilities of the logistics operator. Depending on the number of legs in the journey of the shipment to its end recipients and the scope of outsourced services, the role of ROHLIG SUUS Logistics as a logistics operator may require a different degree of involvement in each stage of the delivery chain.

Dropshipping is one of the more popular models of logistics services; in this model, the operator collects the shipment from the manufacturer’s/importer’s warehouse and delivers it directly to the end recipient. The model enables the elimination of the e-store warehouse from the logistics chain and guarantees the minimisation of costs and damage to the shipment. Companies that decide to collaborate with the logistics operator based on this model must remember that choosing dropshipping is a mutual decision between the manufacturer/distributor and the e-store and requires trilateral arrangements with the participation of the logistics operator, in particular with regards to information flow, specifying the title transfer point or providing services with regards to returns or cash on delivery. The model therefore requires excellent communication and mutual trust at the beginning of the collaboration, in particular with regards to specifying the limits of liability for the goods and integrating the systems operated by each party to the process.

Our observations show that even small e-stores understand the potential of outsourcing logistics services, as it allows them to focus on their main activities without having to invest in solutions that the logistics operator can provide in a much more efficient manner.

What are the biggest organisational challenges facing logistics operators working with customers from the e-commerce sector as an ‘addition’ to other sectors that the operator works with?

A major organisational challenge facing logistics operators working in the e-commerce sector is to ensure an efficient method of storing a large amount and variety of stock-keeping units. Narrow aisle forklifts compatible with the WMS software ensure efficient warehousing operations by enabling faster picking of goods, including smaller goods stored on the top shelves of the warehouse racks. ROHLIG SUUS Logistics is currently implementing this solution in its warehouses, increasing picking efficiency and ensuring higher optimisation of the use of available space when dealing with a large number of stock-keeping units.

Another challenge is connected with the completion of the delivery itself, the so-called final mile, meaning the comfort of customers from the B2C sector when collecting the shipment. It affects the quality of the entire shipment process and the image of the e-store. E-consumers make more and more online purchases, buying not only small goods, but also larger size wares, such as gym equipment, audio and video devices, household appliances and garden furniture, expecting online stores to provide a similar range of services as they do in the case of smaller size packages. The final mile is a challenge for logistics operators, for example due to having to deliver products of non-standard sizes, requiring careful planning of each stage of delivery and preparing a much more complex process.

We must also ensure a high level of quality of the entire order delivery procedure, which e-store customers find particularly important. Aside from the price of the product and time and cost of delivery, they pay close attention to the visual appeal of the package itself, timeliness of delivery or manners of the delivery driver. In order to gain the loyalty of their customers, online stores must ensure that each stage of the delivery process is a positive experience for e-consumers – starting from the purchase of the product until its delivery, using the so-called ‘customer experience’ model. The role of the logistics company is therefore not only to ensure maximum flexibility in choosing the optimal time and space of delivery, but also to pay close attention to a number of other factors affecting the customers’ experience with the online store.

Furthermore, e-consumers more and more often expect e-stores to provide additional services, such us bringing their purchases up the stairs, unpack them or deliver them during non-standard hours. In order to respond to the constantly growing needs of e-customers, we’ve expanded our range by services such as ‘white gloves’ – packaging deliveries with exceptional care, or advance notice service, thanks to which customers will receive mail and telephone notification of incoming shipments, as soon as they are loaded onto the delivery van. We also send text messages to our recipients with information on the delivery process. The customer receives a message when the goods are prepared for shipment, and another when prior to the planned delivery time. The messages include information about the weight of the delivery and whether the upstairs delivery service has been purchased. Clear communication between the driver and the end recipient with regards to the upstairs delivery service is a definite advantage, as the comfort of delivery during the final mile depends on providing reliable information to the client at the appropriate time.

Do such services require some particular functionality with regards to IT systems?

Modern IT system supports the development of e-commerce, significantly optimising the time needed to complete deliveries and resulting in the increase in the satisfaction of e-customers, who are becoming more and more demanding with regards to the quality of service during the entire delivery process. Due to this, integration with the IT systems of our customers (purchasers of our services) is one of the key areas in the operations of the logistics operator. At ROHLIG SUUS Logistics, we provide modern and flexible solutions based on our own systems and an integrating data bus. They include the exchange of information using an online application, webservice or exchange of files.

We are currently implementing the RSL Shipping system in our company, enabling the integration of our JDA WMS system with the software used by couriers and other businesses, which will result in faster and more efficient e-commerce services.

Speaker: Anna Galas, Contract Logistics Development Director at ROHLIG SUUS Logistics