Amazon and China’s Alibaba have set a breakneck pace for parcel deliveries, with online shoppers the world over now expecting express or next day delivery at low cost. While international shipping can’t be that quick, processes like automated sortation and over-labelling are being deployed to shave time off every stage of a parcel’s journey to the customer. The streamlining of warehouse operations is driving significant change in the retail logistics industry. Innovations are coming thick and fast, designed to directly help retailers ramp up vital cross-border sales.
Commercial parcel operators see speed as an opportunity to raise their service levels and build business with ambitious retailers. Their retail clients are searching out new channels of growth, now that domestic markets are reaching saturation point. If they can acquire customers in new territories, they can map out decades of revenue growth for the future. Cross-border e-commerce will swell to between a $1 trillion and $2 trillion market by 2030, depending on certain scenarios, McKinsey calculates, so the size of the prize is not in question. The winners, I believe, will be the brands working closely with the most forward-looking, yet flexible supply chain partners.
3PLs are getting fit for the future
While the postal channel is the dominant channel for international parcel shipments, commercial parcel operators also play an important role today, providing competitively priced, and reliably quick shipping. They tend to offer ‘track-and-trace’ visibility for parcels in transit and services such as insurance and contingency planning, which isn’t provided in the postal channel.
Asendia UK falls into this camp, and it’s certainly the case that we go to great lengths to understand our retail clients’ specific needs and aspirations. We not only have a customer experience programme which takes a consultative approach; we’ve also balanced the automation of our parcel processing, with a commitment to flexibility around the specific needs of the retailers we ship for.
Steady march of warehouse robotics
E-commerce warehouses have been using basic automation for years, but today robotic mechanisms are becoming increasingly intricate and sophisticated in what can be achieved, with more logic and mobility built into the robots. Over time, costs for the hardware and software will fall, allowing this smart tech to be deployed industry-wide. A reality is that without more automation, e-commerce companies and their shipping and parcel partners will simply struggle to keep pace with demand, and stay in the race with the likes of Amazon and Alibaba.
We’ve recently introduced six robotics arms for rapid over-labelling of parcels in our UK operation in Heathrow, London. These are speeding up an essential pre-shipping process on behalf of our global retail clients, including ASOS, Boden, Chilly’s and Urban Outfitters. Combined with new automated sorting technology, also now live, the Heathrow system has dramatically reduced parcel handling touchpoints, so that we can process at a rate of up to 7,200 parcels per hour.
Parcels arrive onsite and an automated cross-belt sorter, with scanners, printers, digital photography and six robots, together take care of the relabelling, routing, sorting, weighing and dimension-checking of parcels. The system has maximum flexibility for despatch, able to sort into bags, pallet boxes, cages or any other container required.
Bags of benefits from automation
Thanks to the automated parcel processing, retailers’ shipments can catch earlier flights and road haulage departures, meaning shoppers get hold of their items sooner. Peak trading, typically in the run up to Christmas, will be easier to manage, with less risk of delays to parcel processing. A great deal of highly demanding manual work has been taken out of the equation, allowing staff to be re-deployed.
It’s also now possible to access valuable data, collected by the automated system and its photographic elements, to help improve service levels, spot problems and forecast more accurately. Having volumetrics for all parcels will help with revenue protection and better control of sizing, which is a key driver within distribution networks. Equally, having photos of all parcels is a very good security benefit for ourselves and our retail clients.
Don’t automate at the expense of flexibility
Customer expectations for delivery times keep on rising, as consecutive surveys from the International Post Corporation (IPC) confirm. One recent IPC survey found that when asked what one thing postal companies should do to improve cross-border deliveries, 32% of the respondents chose ‘make them faster’.
This palpable need for speed is the key reason many operators are looking to make the switch from postal-parcel to commercial-parcel deliveries, industry experts note. At the same time, expectations for the transparency and reliability of goods for delivery are becoming more exacting. It’s now increasingly taken for granted that customers can track exactly where their goods are, for example.
While I’d be the first to advocate automation of some elements of the parcel processing operation, there are potential dangers of over-automating fulfilment operations where specialist services might be required by retailers. It’s all about finding ways to automate at workable points of the parcel journey, leaving some scope for specialist exceptions. In the automation game, it pays to leave plenty of wiggle room for creative choices, flexibility and scalability in the wider fulfilment operations you offer.