August 31, 2021

How Shopify and Other E-Commerce Platforms Transform Logistics

Miles Varghese
Miles Varghese
Helping independent freight forwarders/brokers better stay in-sync, collaborate, and improve operations with their shippers/clients. Co-founder & CEO @ Cargologik.com
e-commerce logistics

In shipping, there are a million different terms to describe the expansion and advancement of technology. Freight brokers, freight forwarders, carriers, regional contract service providers, and other entities dot the landscape of logistics. The supply chain is complex, with both generalists providing overarching services and more specialists that go all-in on one specific aspect of the chain. It can get very complicated, very fast.

In recent years, the role of e-commerce has changed how everyday companies approach transportation management, and companies like Shopify, WooCommerce, and Magento, have created an entirely new foray of management. 

Rather than trying to handle minimal needs, today’s e-commerce logistics platforms are designed to rapidly scale with shippers and serve as a system of record for the whole operation. 

Let’s take a closer look at these entities and how they’re playing a vital role in the digital transformation of the industry. 

What Is E-Commerce Logistics?

E-commerce logistics describes the way in which companies, such as retailers, approach the need to handle shipping and management of digital or online orders, regardless of where a customer placed an order. 

These orders are also often taken on the terms of the customer including how they are placing their order. All businesses should focus on enabling and removing roadblocks for their customers to do business with them. 

In this case, the digital order can be via desktop, mobile, or tablet. It can be on an iOS or Android device. They can be using Chrome, Edge, Safari, Firefox, or whichever browser they prefer to use. And usually over a phone or business internet connection. Regardless of the device, browser, connection, and any other factor, brands should be in tune with their customer’s activity and the environment around that activity.

This, in turn, leads to a lot of complexity to consider. These associated activities behind it generally take one of three forms:

  • An in-house strategy where the shipper packages the shipment, schedules pickup and plans for replenishment needs. 
  • Dropshipping, also known as shipping direct to consumer (DTC e-commerce), where the order is routed to a distribution center or manufacturer for fulfillment and without disrupting your internal flow of goods. 
  • Working with third-party logistics providers (3PLs) that provide multiple services, from transportation procurement through scheduling and warehousing, to reduce your workload. 

All three methods of managing e-commerce logistics have something in common—they focus on finding efficiencies wherever possible and enabling the customer. And that’s a distinction that has come out of the biggest ecommerce platforms like Shopify—unity through data and improved experiences. Simplifying and enabling the brand creation process, as it concurrently does on the “customer” side.

Business E-Commerce Logistics Platform Development Continues to Emphasize the Need for Integration

The types of platforms for managing e-commerce have expanded dramatically in recent years. According to The Wall Street Journal, e-commerce order volume surged more than 10 years over the past year. This jump in e-commerce orders related to lockdowns, lifestyle changes, and created supply chain flux where things are crazier than ever to balance and manage. Transparency is becoming ever more important during these times, where end-consumers still want their 2-day shipping and real-time alerts on their phone. 

Meanwhile, mergers and acquisitions within the industry, such as Shopify’s purchase of 6 River Systems Inc., have stimulated additional interest within innovation in logistics. Together, Shopify’s advancements work toward a way to improve efficiency, expand fulfillment capabilities, and help shippers scale their networks. Shopify and companies of the same status quo are continuously developing new ways to streamline shipping execution, and part of that goes back to how well these systems integrate (talk to) to one another. 

Without integration, e-commerce platforms fall short of their value proposition. Integration through API and EDI, not to mention other options, such as RPA-based resources, can help shippers and intermediaries, like digital freight forwarders, reduce reliance on outdated processes and create more value for their trading partners. It adds up to a more informed, digital freight network that can handle more of your operation, so you can focus on interacting with your customers and building more value in your brand.

A Few Considerations for Choosing E-Commerce Platforms

E-commerce logistics platforms offer a way to scale operations based on demand. Still, shippers need to know a few things about how to maximize the value of these platforms to reap the rewards of digital transformation. 

  1. Choose a partner based on capabilities and how well they align to your current and projected needs.
  2. Evaluate the real worth of value-added logistics services, like packaging. 
  3. Focus on offering fast, free shipping to meet customer demands. 
  4. Automate redundancies by using chatbots or other advanced features to enable digital freight management.
  5. Increase order quality and accuracy by leveraging the collective buying power of companies like Shopify.
  6. Think about the environmental cost, using data within Shopify to understand the carbon footprint reductions possible within strategic e-commerce management.
  7. Gain control over your inventory flow, reallocating freight when necessary, forecasting demand based on ordering trends, and more.
  8. Connect your warehouses to track inventory across the full network regardless of its current stage in the shipment lifecycle. 
  9. Scale inventory based on regional demand, avoiding overordering and positioning inventory closer to end-users. 
  10. Diversify your carrier mix to reduce the “monopoly” a carrier may have on rates when you work with only that given carrier. 
  11. Remember to consider the impact of reverse logistics, especially since e-commerce has some of the highest returns rates in the industry. 

Enhance Customer and User Experiences With an E-Commerce-Ready Tech Stack

Shopify-users have a clear advantage in the world of e-commerce logistics. But the simple reality is that any company that connects systems and puts the power of technology to work can achieve record-breaking growth through the current e-commerce surge. T

There is money to be found and ways to improve efficiency at every turn, and it all begins by understanding your network, reducing the traditional delays and barriers to growth, and letting the limitless power of the cloud permeate your company. Last, these advances will naturally lend themselves to improved customer and user experiences, reduced overhead expenses, and a path to stay ahead of your competition.

Learn more about how your team can put the power of digital connectivity to work in e-commerce logistics by signing up for Cargologik today.

To get the most out of our platform, book your free, personalized training call with our Success Team

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