Global Last-Mile Delivery is Becoming the New NormalPosted on June 25, 2019
No longer are shoppers limited by in-stock inventory at the closest mall. Driven by the growth of eCommerce, today’s shoppers—especially younger ones—are now shopping globally from their laptops, tablets, and phones, driving unprecedented parcel shipping volumes around the world. Meanwhile, big eCommerce is shifting the customer mindset toward free and faster shipping, regardless of the distance and price of the item being shipped.
A 2018 Pitney Bowes study shows that 94 percent of global consumers now shop online, and 64 percent of consumers had purchased goods from another country.
From the first mile through to the last mile, challenges to the global cargo chain can be daunting for today’s shippers. However, despite these challenges, savvy shippers are turning to solutions that simplify their cross-border shipping supply chain and embracing the advantage of the opportunities an endless aisle delivers, be it around the corner or across the ocean. And it isn’t going to slow down anytime soon.
In total, cross-border eCommerce accounts for 15 to 20 percent of the world's online traffic and is growing at close to two times the rate of domestic eCommerce, according to a study reported by DC Velocity. Moreover, cross-border sales are expected to represent 22 percent of global online sales by 2020, the report states.
The Emerging B2B2C Model
According to Techopedia, “Business to Business to Consumer (B2B2C) is an emerging ecommerce model that combines Business to Business (B2B) and Business to Consumer (B2C) for a complete product or service transaction. B2B2C is a collaboration process that, in theory, creates mutually beneficial service and product delivery channels.” Increasingly, the second “B” (retailer) is selling goods to “C’s” (Consumers) that are held in inventory and shipped direct to C’s by the first “B’s” (manufacturers and suppliers). Thus, the second B has opened up an “endless aisle” of merchandise, globally, just like the giant marketplaces have.
As the B2B2C business model continues to grow worldwide, the need to orchestrate cost-effective and time-critical movements from first mile, to cross-border and injection into last-mile parcel networks (“parcel cargo chains”) has never been more critical.
There are plenty of challenges being faced by global shippers including:
- Customs compliance: You need to know how to accurately classify products and prepare documentation to avoid delays in customs.
- Border security compliance: Not every product can be shipped to every country or to every consignee. Shippers failing to screen consignees can face sanctions.
- Landed costs: Knowing when and how to accurately calculate international duties, taxes, and fees are crucial to your bottom line.
- Tracking: Goods are handled by a number of partners during the cargo chain journey. They need to exchange and normalize disparate data. Having access to timely tracking data will help to keep loyal customers.
- Partner Selection: Increasingly retailers are diversifying cross-border transport services. It is important to select the right mix of partners that offer a combination of expertise, value, and reliability.
Many parcel cargo chain solutions are emerging to meet the challenge, including those offered by global parcel carriers, freight forwarders, and 3PLs. Many rely on best-in-class international transport management software like WiseTech Global’s CargoWise One platform that is used by 25 of the top 25 freight forwarders to automate end-to-end first-mile, cross-border and last-mile delivery.
To learn more about the emerging parcel cargo chain models, along with strategies to overcome the challenges of international shipping, plan on attending the Supply Chain Brain webinar “Can Your Cross-Border Supply Chain Ride the Global Parcel Tsunami?” featuring Pierbridge Managing Director Bob Malley this Thursday, June 27 at 1 PM.