What is the Relationship Between Technology and eCommerce Logistics?
The logistics industry has been around since the 1980s, developing and advancing with the times every step of the way. When the 21st century rounded the corner, the logistics industry got a whole new upgrade in the form of eCommerce logistics.
This upgrade came with innovative new ideas, streamlined delivery mechanisms, and the most important element, technology. New ranges of API integrations and UI/ML/AI-driven systems have been created to help eCommerce businesses with a variety of logistics functions, from choosing the best eCommerce logistics company for different orders to handling delivery exceptions efficiently.
Top 5 Vital Key Areas of Logistics Technology
Logistics technology as an inventive new industry may have come up only in the last decade or so, but in a short period of time, it has changed the face of logistics as well as ecommerce businesses. With the help of logistics technology, online businesses and traditional stores have been able to find more effective ways to maximize their fulfillment, keep costs low and maintain their brand integrity.
This is because logistics technology relies on a combination of innovation, automation and customization. Using the tools listed below, enterprises have been able to utilize logistics technology in methods that are specific to their needs and offer opportunities for the greatest scope for growth.
1. Blockchain technology
The use of Blockchain in logistics is absolutely essential when it comes to the collection of data. A blockchain works as a collector and repository of data with specified storage limits. Blockchain enables transactions to be verified more precisely and provides options for more precise record-keeping. This is the core of greater transparency and visibility in supply chain operations.
2. Big Data
Big Data gives ecommerce businesses access to a wide network of data points that enables both businesses and customers to track their consignments. In addition to this, information on traffic, congestion and weather updates is also passed on through this network, which enables route optimisation to be carried out. Big data is most helpful when it comes to automating various parts of the delivery process.
3. IoT and RFID
The internet of things (IoT) is the ultimate mode of connectivity and using sensors built into cars, cargo units, trains, etc, consignments can be monitored and tracked in real-time. It enables greater accuracy for in-transit orders and ensures more efficient delivery. Radio Frequency Identification (RFID) uses similar sensors to send out radio waves which effectively tag inventory for tracking.
4. Machine Learning
Machine learning algorithms have been helping the logistics industry make leaps and bounds when it comes to identifying patterns in delivery performance. Using machine learning, the risk to suppliers can be reduced as well as overall freight costs. The major benefit of machine learning is that it enables more collaborative efforts to be engaged with for various partners in the supply chain.
5. AI (Artificial Intelligence)
Artificial Intelligence is probably one of the most revolutionary things brought forward by both science fiction and then actual science. In logistics, AI is used to quickly analyze and compute data on various aspects of shipping operations. Delayed delivery management, NDR management and even returns can be streamlined with the help of AI. AI also works to keep various systems and software constantly updating and upgrading.
Learn in Details How is Technology Transforming the eCommerce Logistics Industry
Technology has become a new way of life and it has breathed new life into the logistics industry. To keep up with the constantly growing needs of customers, ecommerce businesses have turned to the logistics industry to fulfill orders. And shortly thereafter, the logistics industry turned to the tech experts of the world.
Together, new and more efficient methods were designed and programmed to simplify the variety of complex functions that are performed by players in the logistics industry. Thus the era of logistics technology was born. In this article, we’ll be diving into the myriad ways that technology has been revolutionizing the eCommerce Logistics sector.
1. AI-driven courier selection
Selecting the right logistics partner is always a difficult task. When you’re tied up with multiple logistics partners, it can be a cumbersome process to determine which orders should go to which logistics partners to be shipped.
Logistics aggregators, like ShipRocket and Vamaship, and logistics intelligence platforms, like ClickPost and MetaPack, make use of AI-driven courier recommendation engines. Basic courier recommendation engines use fixed rules like price and serviceability to determine a viable shipping partner for the order.
Logistics intelligence platforms like ClickPost offer access to more advanced AI-driven courier recommendation engines which also allow you to configure rules based on your business priorities and historical data, like delivery time, % of SLA breaches and stuck shipments to select a logistics company for each order. This allows you to increase your order fulfillment percentage and reduce your logistics costs.
2. Manifestation over APIs
Most logistics partners maintain a variety of APIs, each of which handles different aspects of order manifestation. There is a separate API to handle the creation of the order on the logistic partner's platform, another that prints shipping labels, another for AWB (airway bill) generation, and then for assigning a delivery agent to pick up the order. These APIs can be integrated to ensure smooth order manifestation.
Ecommerce businesses can either integrate directly with logistics partners or make use of a pre-integrated platform. ClickPost is one such platform that gives ecommerce businesses access to a single API integration that will take care of the entire manifestation process.
3. Automated Tracking Updates to Customers
One of the biggest challenges to eCommerce businesses is keeping customers informed of the whereabouts of their orders. When customers are waiting for their orders, they are typically extremely excited and anticipating the arrival of their order.
Ensuring they receive real-time tracking updates can go a long way in making sure customers maintain their excitement and anticipation for the order. Ecommerce businesses can integrate with logistics partner APIs and third-party tools to pull tracking information from logistics partners to push to customers.
Good third-party tools make use of both Push and Pull integrations to get real-time tracking data from logistics partners. It allows you to own the entire tracking process and not remain reliant on logistics partners to give customers tracking updates. Sending these tracking updates to customers can be standardized & automated to give customers real-time tracking updates.
4. AI-driven Identification of Delays and Stuck Shipment
Tracking of orders isn’t just for customers to stay updated, it’s for businesses too. Monitoring all orders while in transit can help you identify when SLA breaches occur, like delayed deliveries and stuck shipments. Without a proper system for monitoring the status of orders, nearly 50% of SLA breaches are undetected or go unreported.
AI-driven tools can be utilized to identify the different types of SLA breaches that occur, in which reasons, and the causes for them. This allows both logistics partners and eCommerce businesses to strategically address specific SLA breaches and actively reduce the number of delayed and stuck shipments, and also potentially reduce your RTO percentage.
5. NDR automation
When a failed delivery attempt occurs, an NDR (non-delivery report) is notified to the eCommerce business, specifying the details of the failed delivery attempt and the reasons why it occurred. These reasons can include unavailability of the customer, incorrect address or contact information was provided, or the customer refusing the delivery.
Some failed delivery attempts may also be fake deliveries, where a delivery agent falsely claims to have attempted to deliver the item despite making no such attempt. Adding multiple tech interventions can help immensely to improve the overall order fulfillment percentage.
A good tech-enabled NDR management system pulls real-time information on failed deliveries from the logistics partner’s platform using APIs. As soon as an NDR is notified, issue-specific queries are automatically sent to customers, seeking their response and information to ensure the next delivery attempt succeeds. The updated information is then automatically sent to the concerned logistic partner so the delivery can be completed smoothly. This automated process can help you reduce your call center costs by 10% and RTOs by 20%.
What are the Key Benefits of Using Logistics Technology
We’ve seen the specific ways in which technology has touched the logistics industry, giving us this beautiful melting pot of flavours that comes under the umbrella of logistics technology. Using a combination of big data, machine learning, AI and all the other logistics technology tools we listed above, both the logistics industry and ecommerce businesses have been able to expand exponentially.
The quality of services provided by both industries has increased immensely and now gives customers a greater level of ease and convenience. On top of that, these players in both ecommerce and logistics have also experienced a series of advantages that has enhanced their operations as well. Here are the most notable of those advantages:
1. Greater Accuracy
A huge portion of logistics technology relates back to the collection, storage and analysis of data. A lot of this data circles around monitoring and tracking stock, orders and deliveries. Everything from customer and order information to delivery performance data is collected via technology with a level of accuracy that cannot be met through manual efforts.
2. Greater Transparency
Another bonus you get when all of your information is being collected through a programmed system is that the information becomes more readily available and easy to reference when you need to. For example, if you’re having trouble keeping track of stuck shipments, you can quickly refer to the logistics technology you have in place that is tracking your shipments and even customise that system to notify the causes for these stuck shipments.
3. Reduce Manual Efforts
One of the best things about utilizing logistics technology is that it gives you the ability to automate a large portion of your operations. Whether it is the above-mentioned data collection that absolutely needs to be done or handling delivery exceptions through customer interactions, logistics technology can streamline these processes.
The added advantage is you can also analyse the data to determine which parts of your delivery operations and supply chain could be improved with the help of automation. You can then incorporate an appropriate system for the same.
4. Reduce Costs
With all of this automation in place, there is a consequential reduction in money and resources spent on completing these operations. Tasks that previously required multiple hands to be carried out, such as verifying information or monitoring transactions, can be carried out with a single program that simply needs to be integrated with your system.
In fact, many ecommerce businesses struggle financially to establish an internal infrastructure, which requires a separate team of technicians to be employed. This entire cost can be avoided by employing the services of a third-party logistics company that makes use of the requisite logistics technology.
5. Better Customer Experience
A customer’s final delivery experience can be affected by a wide range of factors. There may have been a delay in the delivery or difficulty that arose at the time of delivery. Perhaps there have been frequent occurrences of stuck shipments or inaccuracies in the information provided on the shipping label.
All of these factors can be influenced by the use of logistics technology and with its help, most of these factors become non-issues. We’ve shown you how technology can be used to communicate with customers to fix shipping exceptions and keep customers informed of their order status. With logistics technology in place, customer experience goes from okay to satisfactory to exemplary.
Technology is truly changing the way logistics functions, seeking to optimize every step of the process wherever possible. Selecting a logistics partner for different orders can be determined by AI-based engines keeping in mind parameters that were never considered only a decade ago.
AI has also played a huge role in helping businesses monitor the performance of their logistics partners and actively address issues related to delays and stuck shipments. Automating a process for NDR management has truly revolutionized order fulfillment by allowing businesses to convert failed deliveries into successful ones quickly. As technology continues to advance, the eCommerce logistics industry will be right there beside it finding the best uses for it.