Today there isn’t an industry that hasn’t been influenced and impacted by technological advancement. When it comes to leveraging technological innovations, the eCommerce industry is no exception. In fact, eCommerce was born due to technological advances, the driving force behind the industry’s upward trajectory. According to a report by GlobalData, the Indian retail eCommerce market is expected to witness a substantial 18.2% CAGR during the forecast period of 2018 to 2025. Moreover, during this duration, the market is projected to reach a value of US$ 120 billion by the end of 2025.
However, during the disrupting growth of eCommerce, the sellers have witnessed several challenges from third-party logistics companies. So what are these challenges? Let’s find out.
Why Sellers Rely upon Third-Party Logistics Companies
Third-party logistics companies or 3PL have been significant supporters of the growth of the eCommerce industry. A report by Statista states that the Indian third-party logistics market shall grow from INR 580 billion in 2020 to INR 1.2 trillion by the end of 2025. The report also says that the 3PL market shall witness an 18% CAGR during the forecast period. But what makes third-party logistics companies so helpful to the sellers? Let’s have a look:
On-Time Pickup and Delivery
If the orders are picked up on time, they will be delivered on time. The 3PL companies ensure that the sellers’ orders are picked up and delivered within the agreed timeline. This, as a result, helps the sellers to ensure they can provide impeccable customer satisfaction.
The third-party logistics companies provide special packaging for fragile orders. This allows the sellers to send products in good quality to the customers. To ensure that the product is delivered undamaged, the sellers rely on 3PL’s systematic and damage-proof packaging.
The ultimate goal is to deliver its products to the customer without any hindrances or customer’s need to follow up. To make this goal achievable for the sellers, the 3rd-party logistics companies provide end-to-end services.
Although, over the period, some logistics challenges might hinder the growth of a seller’s business. Below are some challenges that are affecting the seller’s business.
Challenges Faced by eCommerce Sellers
The Capacity of the Warehouse
With the growing demand for online products, the eCommerce business is in full swing these days. However, many third-party logistics companies cannot keep up with the changing dynamics of customer demand. It is noticeable that warehouses that were optimum for the eCommerce sellers five or six years ago might not be capable enough to cater to the growing demands of today’s customers. Third-party logistics is a constantly changing industry where ensuring the proper accommodation of the trending products is a significant challenge for the stagnant space in a warehouse.
Disruption in Customer Demands
The dynamics of customer demands are constantly changing. For instance, COVID-19 has compelled third-party logistics to develop order fulfillment and delivery solutions to cater to the stringent government safety policies, including contactless operations, adherence to COVID-19 protocols, and many more to protect the workers and customers. Moreover, the seasonality can cause the 3PL companies to pivot to accommodate the surge in demands for a specific product.
Lack of Skilled Workers
In a customer-centric industry such as logistics, offering the best possible service is the key to success. To achieve this, third-party logistics companies must have qualified staff. However, acquiring skilled staff has become a more considerable concern for the 3PL companies today compared to the previous years. According to a report by Inbound Logistics, 60% of surveyed respondents listed finding, training, and retaining qualified workers as a major challenge in 2020. Staff deficiencies can lead to damage to the brand reputation and business growth. Moreover, it also increases labor costs for the sellers, which further diminishes the profit quotient for their business.
Stringent Government Regulations
3PL companies transport goods to multiple cities, states, and, in some cases, countries. As such, they must adhere to the rules and regulations of the area they are about to deliver the goods. The government regulations may vary at different locations, and third-party logistics companies must be updated and compliant with all these rules to operate smoothly. However, meeting the stringent rules at all times might be challenging for logistics companies as they might not have complete access to appropriate human resources. As a result, the sellers have to face massive roadblocks to completing their delivery on time, and in extreme cases, they might have to face higher RTOs or return to origin.
Pickrr Advantage to Overcome the 3PL Challenges
Today the sellers have to undertake several parameters before they select a third-party logistics partner. They have to monitor which courier partner is doing well in a particular delivery area, what type of products a courier company delivers the best, and most importantly what will be the best possible cost for delivering a product to the customer. Pickrr Advantage is designed to bring additional values and benefits to the customer by adding guaranteed improvements in turnaround time (TAT)% for the sellers. Pickrr Advantage provides first attempt delivery within the zone specified TAT for better results. It allows sellers to cut down the efforts to analyze the courier partner’s performance and then select a suitable courier company. The ease of courier selection is followed by the rule-based dashboard, which further enhances the profit margin for the sellers.
Benefits of Pickrr Advantage
Leveraging Pickrr’s more than six years of experience in the logistics industry, Pickrr Advantage is designed and developed to offer several benefits to the sellers. Some of the benefits include:
Unified Rate Card
Under Pickrr Advantage, the company offers a unified rate card to the sellers. Irrespective of the courier partner’s cost, Pickrr offers a standard rate card to the eCommerce business owners. Here the entire courier allocation is done by Picker’s ML platform, which allows the company the guaranteed first attempt of delivery within the zone specified TAT. The unified rate card provided in Pickrr Advantage is developed to provide best possible rates to sellers. With the help of these rate cards, the sellers can avail better profit margins by reducing the billing hassles.
Pickrr has been disrupting the logistics space in India for more than six years. The cumulative data has led the company to use intelligent technologies for data analysis to create and formulate a multifold combination of pincode to pincode serviceability. Pickrr Advantage allocates the third-party logistics for end-to-end pickup and delivery tasks based on the analytics. The algorithm used by Pickrr Advantage uses the data such as the zone of pick up and delivery, segment of the seller, and mode of preferred transportation for allocating the courier for the sellers. The smart courier allocation by Pickrr Advantage assures 95% improvement in the TAT performance across all orders.
Reduced RTOs with Better NDR Management
In case an order is not delivered to the end customer, the seller has to bear both forward and return freight charges. This is one of the crucial and daunting challenges for any eCommerce seller today. Using Pickrr Advantage, sellers can identify areas with higher potential for non-delivery. The ML-powered solutions alert the sellers about the risky area/customer to prevent RTO. Moreover, it also recognizes the 3PL logistics companies for better TAT% for the sellers.
The eCommerce industry is facing a paradigm shift due to the COVID-19 outbreak since 2020. Several reports suggest that shoppers are now ordering more products online. However, third-party logistics companies are under tremendous pressure to cater to the changing dynamics of the industry. Pickrr Advantage offers smart allocations and unified rate cards to the sellers to remove the burden of choosing the best courier partners for their business. To know more about Pickrr Advantage and its benefits for the business, connect with us.