The addition of eCommerce into the world of retail along with an expanding global customer base, and shrinking product life cycles are all contributing to increased performance pressure on warehouse service providers.
comScore Reports $56.1 Billion in Q1 2014 Desktop-Based U.S. Retail E-Commerce Spending,
In Q1 2014 alone, desktop eCommerce sales in the U.S. amounted to $56.1 Billion. And almost 10,000 U.S. businesses take part in this industry, organizing and directing the flow of hundred of millions of dollars worth of merchandise a year.
Unfortunately though, according to a study by the Georgia Institute of Technology, less than 30% of the warehouses in the U.S. are operating efficiently.
As technology continues to evolve, the art of maintaining a productive supply chain must also change to keep up with the physical laws of supply and demand.
The days of housing a massive inventory based on market analysis and yearly sales predictions have given way to a much more nimble “on-demand” supply model where most items in the shipping chain are pre-sold and in the pipeline to be delivered to the final customer.
The result is that companies are reducing their warehouse space and the staffing required to maintain these cavernous storage facilities as they opt to employ third-party vendors to handle order management on an as-needed basis.
The Outsourcing of Logistical Functions to Third Parties
By expanding their distribution networks, warehouse facilities in various geographical locations are reducing travel distances and delivery times by enabling retailers to ship to stores and to end users faster.
With the expertise of third party logistics companies, businesses can save additional money by not having to launch their own physical fulfillment center.
Shifts in Warehouse Management
These shifts in the marketplace mean that fulfillment and distribution centers must now be outfitted with operational solutions and technology platforms that can respond flexibly to consumer requests in real-time while providing the people who work at the warehouses with the information they need to fulfill and ship orders on a truncated timeline.
The warehouse of the 21st century requires technology solutions and floorplan/warehouse layouts that facilitate increased velocity and adaptability. More frequent, smaller orders will increasingly require fulfillment at the split case or item level.
SKUs need to be kept in relatively smaller quantities with the possible need for the addition of more fulfillment centers located strategically to meet ramped up delivery time expectations across the delivery region footprint.
If you’re a logistics manager and need a partner to help you strategically manage and successfully move your products out of the port and onto their final destination, feel free to reach out to us to discuss your needs.
And for detailed information, maps, and contact information for the ports of Los Angeles and Long Beach, be sure to download a free copy of our Comprehensive Port Service Guide.