More trailers are needed to manage dynamic distribution disruption

 

The job of a logistics trailer fleet manager is becoming more exciting every day as the demand for transporting goods keeps on changing. Blame it on the Internet; the always disrupting digital movement that has already affected so many branches. The increasing number of online shoppers pushes the limits of transportation and requires more trailer fleet flexibility. Experts search for a solution to turn the supply chain into supply elastic; with enough flexible volumes available at every depot. If your trailer fleet is not large enough to cover all depots, a trailer rental or trailer pooling solution might be the answer to this problem. Contact TIP to learn more about this or download our latest whitepaper about The Flex Challenge.

Cross border sales

Online shops in Europe have achieved a combined growth in sales of 18,4% in 2015 compared to the year before. Collective web sales increased to 156,28 billion euros. Many of the top merchants sell online across Europe, filling up many trailers. “This cross-border success is particularly notable at a time when European policymakers are taking high-profile steps aimed at creating a single online shopping market across Europe”, says Internet Retailer.

Otto omni channel’s success

Nobody knows where this growth will end, as e-retailers keep on expanding their logistic network to enable instant delivery. Let’s have a look at some dazzling figures of two large e-retailers in Europe; Cdiscount from France and the German-based Otto.
In 1949, Otto started as a German fashion mail order company with a paper brochure, which allowed you to choose from 28 pairs of shoes. The Otto Group soon became one of the largest online retailers for fashion and lifestyle in the world.

Besides selling fashion and lifestyle goods, Otto made their logistics network available for third parties which allowed the company to sell more goods than ever. In Germany, the largest online furniture retailer is not a furniture brand, it is mail order company Otto thanks to its strong omnichannel strategy. The total online revenues from e-shops like Otto, Bonprix, Baur, Schwab and the Mytoys Group reached a staggering 7,5 billion euros in 2015. The majority of sales is still made in Germany followed by France.

Same day delivery by Cdiscount

In France, Cdiscount is the leading e-commerce company with a total revenue of 2,7 billion euros in 2015 (source JDN). The online brand of the Casino group, well known for their supermarkets, has built an impressive logistics network. The distribution of online goods starts from more than 320,000 sqm of logistics space. This gives them a leading position when it comes to distribution space, followed by Amazon, who is likely to take this first position after they have opened their new fulfillment center of 107.000 sqm in Amiens, Picardy in 2017.

Cdiscount’s bulky goods are delivered the same day throughout the country. Orders placed up to 14.00 hours or 15.00 hours are delivered between 19.00 hours and 23.00 hours on the same day at the home of the buyer. This speed of delivery asks for a strictly organised warehouse. The ‘same-day flow’ falls into several batches during the day and requires less than two hours of picking, preparing and shipping. On a normal day, between 30 and 50 trailers are filled for delivery.
Having the distribution network and system in place; Cdiscount opened up their logistic fulfillment services to others. This turned out to be a big success: 9.500 third party sellers realised a revenue of 638 million euros in the third quarter of 2016.

More trailers are needed to manage dynamic distribution disruption

Trucks and trailers arriving and leaving at Cdiscount’s depot. © Picture courtesy of F.Fauconnier / JDN

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