Page 9 - Logistics News - Issue 01 - 2024.indd

E-C O MME RC E D E L I V E R Y

impact the bottom line. Some of the most common ones optimal packaging can result in damaged items, leading to
include: replacement costs and lowered customer satisfaction.
• Delivery distance: Longer routes often mean higher costs.
• Package weight and size: Heavier or larger items are typically Adopting a few cost-effective measures in your packaging
more expensive to deliver. process can significantly streamline your e-commerce delivery
• Rush deliveries: Urgent deliveries or next-day shipping can and reduce costs:
significantly increase costs. • Implementing a standard packaging size where feasible.
• Returns: Failed deliveries and returns can rack up expenses, • Making use of lightweight, quality packaging materials.
particularly if the return rate is high. • Investing in bulk supplies to benefit from economies of scale.
• Considering eco-friendly packaging solutions, which can be
Strategy 1: Negotiating shipping rates with cheaper and appeal to environmentally-conscious consumers.
carriers
E-commerce businesses depend hugely on their ability to deliver Strategy 3: Leveraging technology for
products to their customers in a quick, efficient and economical delivery route optimisation
manner. A substantial part of operating expenses in e-commerce Utilisation of technology has become a vital part of a cost-
is shipping costs. Hence, negotiating lower shipping rates with effective e-commerce strategy. One area where this holds
carriers becomes a significant cost-effective strategy. Reduction significant value is in optimising delivery routes. Delivery route
in shipping rates directly impacts your profit margins and can optimisation technology leverages advanced algorithms to
give you a competitive edge in pricing your products. determine the most efficient way to deliver packages. Such
technologies take into consideration a variety of factors,
The value of negotiating shipping rates can’t be overstated. including distance, time, fuel consumption and traffic conditions.
Contrastingly, failure to land a good deal can result in overpaying, They include:
harming your less-than-ideal pricing. To effectively negotiate • Easy-to-use dashboard for monitoring delivery status.
with shipping carriers, develop an understanding of your typical • Predictive technology for identifying route problems ahead of
shipping profile, including the volume, weight and destination of time.
your shipments. Leverage this data to create a compelling case • Real-time tracking options to maintain transparency with
for a rate reduction. customers.

Another tip is to consider working with multiple carriers as When employed correctly, delivery route optimisation
this gives you the advantage of choosing the most affordable technology can cut costs significantly. There are numerous
option. An additional strategy is having a fallback option, which benefits:
enhances your negotiation power. Remember, carriers also need • Decreased fuel expenses: By choosing the most efficient
your business and can likely meet your terms more than you routes, you can cut down on fuel expenses.
realise. • Reduced delivery time: Faster, more direct routes allow for
quicker deliveries, which also means less time spent on the
Strategy 2: Implementing an efficient road and, therefore, lower labour costs.
packaging process • Improved customer satisfaction: Customers are likely
In the e-commerce realm, your packaging process can directly to appreciate the faster delivery times and the increased
impact both your delivery costs and customer satisfaction levels. transparency, which can enhance your company’s reputation
When not executed properly, you may find yourself overspending and boost sales in the long run.
on materials and postage while also running the risk of damaged
goods upon arrival. Strategy 4: Utilising third-party logistics
providers (3PLs)
The logistics behind package delivery are often dictated by In a bid to streamline operations and maximise cost
weight and dimensions. Bulky or improperly shaped packages efficiency, many e-commerce businesses are turning to
can lead to increased shipping costs. Additionally, less-than- third-party logistics providers. 3PLs take control of the

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