From warehouses to shipping
Except for big retail corporations, most online merchants outsource services of the e-commerce supply chain to third-party logistics (3PL) providers. These companies offer multiple types of online product distribution – from omnichannel to drop shipping. With online consumers expecting fast delivery, time efficiency in order fulfillment is essential. On average, the process takes less than one hour, with nearly 30 percent of professionals estimating it to be under 30 minutes. To improve order-processing speed, distributors adopt enhanced warehousing systems, optimize the entire layout of the warehouse, or employ new pick strategies. At the same time, they employ robotics and consider new packaging techniques and formats.In e-commerce, shipping makes up nearly 90 percent of total order fulfillment costs, and last-mile delivery represents the biggest part of it. Between 2018 and 2023, the share of last-mile delivery costs out of total shipping costs has increased to over 50 percent, pushing couriers to introduce other collecting options as alternatives to home delivery of single parcels. Product dimensions influence the handling costs, too. On average, consumer electronics have higher shipping fees than health and beauty products, which are usually much smaller.
What matters in online delivery
The distance from storage locations to consumers’ homes impacts delivery timing up to the point that online orders are delivered faster in Europe than in the United States. However, consumers of both regions might have to wait longer for their cross-border purchases than for domestic orders. For logistics reasons, less than five percent of cross-border orders are delivered within two days.Besides timing, delivery traceability – and the digital platform enabling it even in real-time for customers – makes all the difference. Although one in five online merchants still gives no updates on delivery status, consumers appreciate receiving information on when and where their parcels are being dispatched and eventually delivered. These details ensure the safety, transparency, and flexibility of last-mile delivery.
