By Jean-Paul Rodrigue
The emergence of e-commerce has allowed for new forms of logistics and freight distribution that are starting to have noticeable impacts on ports and terminal operations. This digitalization of retail required the setting of physical distribution components relying on home deliveries, which include several facilities designed and positioned to answer demand promptly.
E-commerce is a distributional form of consumption since demand is dependent on the available distribution capabilities, particularly its timeliness and reliability. The setting of e-commerce supply chains involves not only the procurement (inbound) aspects of logistics but as well the final distribution dimension of home deliveries. Logistics becomes essential for e-commerce because the consumer is directly exposed to its performance. Supporting this new distribution system required new types of facilities to fulfill roles such as processing and packaging orders, sorting large volumes of parcels by geographical destinations, and decomposing shipments for final delivery routes. While parcel deliveries companies have developed segments of this distribution system for the last few decades, e-commerce incited its expansion in scale and scope to levels not seen before.
The online retailer Amazon epitomized this paradigm, accounting for 38% of all online retail sales in the US and 4% of total retail sales. It commands substantial volumes and can dictate how the parcels generated by e-commerce will be handled through distribution channels that are increasingly under its direct control.
Read the full article by PortEconomics member Jean-Paul Rodrigue – first published @Port Technology International – by following the link.
