Streamlining Marketplace Logistics: Strategies for Faster Deliveries

Consistently delivering packages on time is hard, but it’s critical to maintain marketplace customer satisfaction. Today, marketplaces find it particularly challenging as delivery costs continue to press on profit margins. Innovation is the answer, as technology can help marketplaces keep ahead of logistics challenges.

In this article, we outline some of the challenges marketplaces face and discuss core logistics innovations that digital marketplaces should adopt. We also explain why innovation complexity can take away from a marketplace’s core business – and how partnerships solve that conundrum.

Delivering The Goods is Tough

E-commerce marketplaces are grappling with increased fuel and freight costs. From spikes in fuel prices to blocks along shipping channels and a growing shortage of shipping containers. Post-COVID inflation is also still affecting many markets.

With transportation more expensive there is pressure on the bottom line of businesses, and it makes cost-cutting tempting. The risk: cut transport costs to the bone, and customer satisfaction can suffer. 

Some marketplaces can afford to overinvest in quality logistics, but the ongoing supply chain disruptions, including port congestion, manufacturing delays, and extreme weather events are making life hard anyway. Add the need to handle returns to the picture, and it can seem like an unassailable problem.

These challenges are quite broad too – and, in all fairness, it can be a tough act for marketplaces to try to fix every single logistics challenge they face.

Common Challenges With Logistics

Let’s take a closer look at what these challenges look like. Not knowing the location of customers' packages is a major source of stress, especially with time-sensitive international shipments.  Real-time tracking is vital to keep customers informed and reduce anxious inquiries. But delivering this real-time tracking isn’t always easy.

Siloed departments, outdated technology, and the sheer intensity of a peak season can lead to communication failures, causing missed deadlines, costly errors, and frustrated customers. Modern platforms that allow seamless information sharing between warehouse employees, customer service reps, and other stakeholders are essential for operational efficiency.

What’s more, traffic jams, weather disruptions, and unexpected customs hiccups are inevitable.  Delays severely impact customer satisfaction, so proactive communication is key. Here, predictive analytics tools can help anticipate potential roadblocks in advance.

Another core issue that adds to the expense are things like empty trucks, ships, or planes which all directly translate to lost revenue, increased costs and increased environmental impact across the logistics sector. Companies are trying to reduce the risks by implementing route optimization tools and exploring backhauling opportunities whenever possible to ensure vehicles are always carrying something, optimising efficiency and cutting costs.

Customer Expectations Can Be High

In trying to win over customers, marketplaces can also find that they make promises that impact profitability. Customers adore free shipping, but it can seriously impact profit margins. The key is to strike a balance between meeting expectations and preserving profitability. 

Free shipping as a limited-time promotion, a loyalty reward, or a tiered option for customers who are willing to wait longer could be a better choice.  It’s important to be strategic about factoring shipping costs into the overall product pricing strategy.

Limiting the impact of shipping costs can also be accomplished by diversifying shipping methods to reduce reliance on any single carrier and to allow shopping around for better rates. Negotiate aggressively with suppliers and consider consolidating loads whenever possible.

A full warehouse is great but it’s worth stopping it from becoming so packed that logistics can't work efficiently. A blocked warehouse can hamper the ability to replenish inventory and keep orders flowing. 

But it also comes down to outdated warehouse management systems sometimes, which often slow down logistics – a particular problem during peak seasons. Marketplaces should consider investing in modern systems that offer advanced analytics, slot optimization, and automation tools that will streamline operations and save your team significant time and effort.

Again back to customer expectations, a streamlined process for dealing with incorrect orders is essential to avoid tarnishing a brand's reputation. Use a system that allows for quick order tracking and modification.

The Impact Of Innovation

In the end, long hours and increased pressure can lead to burnout and resignations if not handled thoughtfully.  Proactive planning, flexible shifts, cross-training, and an emphasis on open communication are essential – but logistics teams need much to truly move the needle.

Clearly, the challenges around logistics are extensive – it’s not just down to cost or peak season pressure. What’s more, it’s so widespread that it’s not hard to find a marketplace that’s experiencing problems with logistics. 

Where there’s a widespread problem, there’s also innovation. Delivering e-commerce packages to an order-hungry public is the definition of a widespread problem that results in innovation.

A great example is local hub pickups. When customers order online, they’re instructed to collect packages from stores or lockers. Local hub pickups reduce last-mile costs and give e-commerce merchants more flexibility. 

Another innovation that’s doing a lot to mitigate delivery challenges is crowdsourced delivery. This model taps into networks of independent drivers for on-demand services, perfect to help scale delivery during peak times. 

In some geographic regions autonomous delivery, with robots and drones, is rolling out. Where suitable, autonomous delivery offers the potential for efficiency and cost savings in the future. 

AI is also transforming logistics on multiple fronts because AI intelligently makes decisions much faster than humans. For example, route optimization algorithms streamline delivery routes – saving time, fuel, and money. AI-based demand forecasting can also ensure the right inventory is in the right place, minimising out-of-stock prompts and reducing wasteful overstocking. 

Complexity Necessitates Partnerships

These innovations are, collectively, game-changing for marketplace logistics. None of these innovations are exorbitantly expensive, and they’re not inaccessible either.

However, there is a challenge. Technology innovations for logistics can be complex to implement and require specialist knowledge. It’s one thing to be a marketplace expert that successfully shifts goods day in, day out. It’s another to develop expertise in logistics technology or to set up a crowdsourcing network.

The answer: partnerships. With the right partnerships, marketplaces can focus on what they do best: selling, while leaving the logistics to experts who know how to avoid tough problems and how to optimise.  Some of the benefits of partnerships include:

• Focus on core strengths: Implementing innovative logistics solutions, whether it's AI-powered route optimization or setting up local hubs, demands focus and resources. A partnership allows marketplaces to remain laser-focused on their primary business drivers, while outsourcing logistics management to experts.
• Knowledge gap & expertise: Staying on the cutting edge of logistics requires specialised knowledge. A partner specialising in logistics technology will have the experience, resources, and ongoing R&D to effectively navigate market changes and ensure optimal solutions.
• Scalability and adaptability: As a marketplace grows, so do its logistics needs. Partnerships enable quick and efficient scaling. Experienced partners will have the infrastructure and established networks to accommodate rapid growth and changing market demands.
• Streamlining communication: Logistics can involve multiple touchpoints – carriers, warehouses, customs, etc. A strong logistics partner becomes an extension of your team, centralising communication, and reducing fragmented information that can lead to costly inefficiencies.

How Do Partnerships Work in Practice?

Take local hubs. Where local hubs are practical, marketplaces should try to partner with existing hubs rather than set up their own. Existing hubs have the scale and momentum to deliver successfully, whereas a brand-new hub will take time to catch. 

For AI-powered efficiencies, it is obvious that a partner with AI expertise would be needed to make the most of the optimisation potential of AI, given the sheer complexity of AI.

Effective partnerships also help with the nitty-gritty of logistics. Consider packaging, for example. A lack of standardisation quickly makes packaging inefficient, which means packaging becomes yet another obstruction, blocking a smooth logistics journey.

For example, as a logistics partner, Packhelp offers a full-service packaging platform that stops the use of inefficient and unstandardized packaging. Customisable packaging stores, warehousing, and logistics support, all help to optimise packaging efficiency. It’s a partnership that reduces damage during shipping, delivers cost savings, and enhances the user experience end-to-end.

What’s Next For Logistics

Changing customer expectations, pressure on logistics chains as well as technological breakthroughs are all factors that are influencing the logistics industry.

Automated driving vehicles will become more common, which alongside new materials for vehicles, will improve overall efficiency, hopefully driving costs in time.

We know that there’s a potential for drones to enhance last-mile deliveries, especially in remote areas. But it needs technology to enable it: both for drones and other vehicles, IoT sensors will continue to help track shipments, collect live traffic data, and communicate this to the warehouse.

Technology will continue to be the bedrock for driving sustainability and efficiency in logistics. The industry will increasingly leverage the power of the Internet of Things (IoT), artificial intelligence (AI), and machine learning (ML) to enhance supply chain visibility, automate repetitive tasks, and optimise operations. 

Real-time tracking of shipments, monitoring of environmental conditions, and remote asset management will enable logistics companies to make data-driven decisions, reduce delays, and prevent theft.

Humans and AI will increasingly work together, as logistics professionals use advanced technological skills and analytical abilities alongside AI output to plan better – and respond faster.

Sustainability As a Key Factor

Sustainability will be a key priority for the logistics industry. Companies are expected to invest more in eco-friendly practices, reducing their carbon footprint through the use of electric vehicles, alternative fuels, and renewable energy sources. 

Warehouse operations will become more efficient, with technologies like warehouse management systems (WMS) optimising inventory, minimising energy consumption, and reducing waste. Transportation management systems (TMS) will play a critical role in promoting sustainable practices by optimising routes, consolidating shipments, and minimising empty miles, thereby reducing fuel use and emissions.

In the broad, emerging technologies like autonomous vehicles and drones will revolutionise last-mile delivery, making it faster, more cost-effective, and environmentally friendly. Blockchain technology will improve food safety and traceability, allowing companies to trace the origin of their products and ensure quality. Robotics and automation will streamline warehouse operations, increasing productivity, accuracy, and cost-efficiency.

As the logistics industry embraces these technological advancements, it will achieve unparalleled efficiency, reliability, and customer satisfaction. Logistics companies that invest in digital transformation and stay ahead of the curve will gain a competitive edge, enhance operational agility, and deliver superior customer experiences.

Choose A Partner for Innovation

Successfully navigating logistics challenges means embracing innovation to support customer satisfaction, cost control, and profitability. 

Innovative technology and the partnerships that make it possible are at the core. Choosing the right partner – from packaging to shipping, to delivery – can enable marketplaces to solve even the toughest of problems.

Doing nothing is not an option, logistics challenges are not going away. Marketplaces should consider Packhelp as a logistics partner thanks to our deep expertise in providing customised packaging solutions that can enhance the customer experience and improve operational efficiency. 

Packhelp As a Logistics Partner

Packhelp offers a wide range of customizable packaging options, allowing marketplaces to create branded, visually appealing packaging that reflects their brand identity. This can help marketplaces make a strong first impression and create a memorable unboxing experience for customers.

Our packaging solutions are also designed to optimise logistics and distribution. Our experts help reduce shipping costs, minimise damage during transit, and streamline the overall fulfilment process for marketplaces. 

As marketplaces grow, Packhelp can scale its packaging solutions to meet increasing demand, ensuring their flexible and adaptable services can accommodate the evolving needs of expanding businesses.

What’s more, Packhelp offers eco-friendly packaging options, allowing marketplaces to demonstrate their commitment to sustainability and appeal to environmentally conscious consumers. 

With extensive experience in the packaging industry, Packhelp can also provide expert guidance and support to marketplaces, helping them navigate the complexities of packaging and logistics. 

This combination of customisable solutions, efficient logistics, scalability, sustainability, and industry expertise makes Packhelp an attractive logistics partner for marketplaces looking to enhance the customer experience and optimise their operations.

At Packhelp, we’re here to assist – at least with packaging, but also with any other advice you might need. Get in touch with us here.