The tremendous growth of the e-commerce industry has resulted in the growth of last-mile delivery, which in turn is making logistic companies, including third-party logistics providers, think about offering delivery services for the business-to-consumer (B2C) market segment.
This opens new revenue opportunities and solves common challenges logistics companies face, like ineffective space and fleet utilization due to fluctuations in demand. But despite all the advantages of working with a new market segment, handling both B2B and B2C order fulfillment may overcomplicate your business operations.
The good news is that with the right automation strategy, you can forget about all the difficulties related to serving both B2B and B2C customers. In this article, we give you some useful tips on how you can successfully start offering a last-mile package deliveries.
Why third-party logistics companies start working for consumers
There are a few reasons to enter the B2C market:
1) More effective use of warehouse space
Irregular or seasonal demands for transportation leads to ineffective warehouse management – one month you experience excess stock levels, while another month you have your warehouses only half-field. To reach the optimal level of warehouse space utilization that doesn’t depend on seasonality, you can fulfill your warehouses with orders from individual customers.
Bear in mind, that with orders from both consumers and businesses, there’s a risk your warehouse will become messy. To prevent this, you should reassess your warehouse floor plan and ensure your warehouse management system (WMS) can handle both B2C and B2B orders.
2) Solve the empty leg problem
Unfortunately, vehicles running empty or near empty are common for logistics companies. According toEurostat, 12.3 percent of road freight journeys within the European Union were performed by empty vehicles in 2018. Statistics from the UK government show that over 30 percent of all truck journeys in the UK in 2018 were made when trucks were empty.
One solution to this problem is filling empty cargo space with orders from individual customers. To effectively deal with orders from different sales channels, a good freight management system equipped with load and transportation planning functionality is a must.
3) New source of revenue
Of course, a new customer channel also equals a new revenue stream. There’s every chance your company can successfully enter the market for courier services. As an established logistics enterprise, you have a couple of competitive advantages over Uber-like startups.
Well-established business processes will help you deliver fast and accurately, while a large network of fleets and warehouses will let you deliver large volumes of shipments to a wide range of destinations.
What you should consider before working for individual consumers
Bear in mind that not all third-party logistics (3PL) companies are ready for B2C order fulfillment, however. We’ve created a list of things you should consider when scaling to the B2C segment.
Meeting high customer expectations
Delivery services from Amazon and DHL have raised the bar on the customer experience. Today, when users place orders online, they typically expect highly customized service and almost immediate shipment.
Logistics enterprises working with the B2C segment are struggling to provide this by building a customized application for their customers. Here are the top user wishes you can fulfill with a customer app:
Get custom quotes
The first question a potential customer will ask is how much your service costs. For this reason, one of the best ideas is to implement a shipping cost calculator in your app that allows both registered and unregistered users to calculate the price of a shipment. For more convenience, you can offer several quotes according for different delivery dates.
For instance, one delivery application we developed has urgent, same-day, and economy quotes so users can decide whether they want cheaper but longer delivery or they want their parcels delivered the same or the next day and are ready to pay extra for this. C.H. Robinson Price Calculator is one of the examples of how logistics service providers can implement this functionality into their 3PL applications.
Securely pay for delivery
Next, you should provide users with a secure way to pay for delivery. Enable several payment options so users can choose the most convenient one. Enabling users to pay online without leaving your app is the most convenient and secure method. To enable this functionality, you should implement a payment gateway.
Track parcels in real time
Lack of transparency is a common cause of dissatisfaction with delivery services. Users don’t know where their shipments are when location sharing is turned off on a carrier’s device.
So besides adding delivery statuses, implement real-time tracking functionality that shows the locations of shipments on the map and shows their estimated dates of delivery.
Another integral part of your third-party logistics software is push notifications that alert users about delivered orders. Also, you can offer chat functionality for communication between users and their brokers or brokers and the carriers they work with.
Allow users to track shipments using a QR code or tracking number even if they aren’t registered in the app.
See all parcels in one place
When waiting for multiple packages, users have to sort through details like delivery statuses, parcel locations, and parcel descriptions. To let users get the main parcel details at a glance, you should implement a user-friendly dashboard.
When working on a delivery application for the Middle East market, we created a well-structured dashboard with an intuitive design and real-time data updates. Active parcels are highlighted at the top of the screen. If there are no active parcels, the user sees a list of their most recent parcels.
Get instant support
Another building block of excellent customer service is fast handling of any issues. For this, you should think about creating or scaling your customer support team and investing in creating an admin support panel or using a ready-made customer support platform.
Zendesk, Freshdesk, Salesforce Service Cloud, and Zoho Desk are among the top customer service tools on the market. Hubspot is another popular tool offering solutions for digital marketing, content management, and customer service.
Providing staff with convenient management tools
Still, drivers and logistics managers have to do lots of paperwork and other routine tasks. Automating routine tasks by creating a full-featured admin panel and a driver app will let your staff use time more effectively and hence cut overhead costs.
We’ve prepared some tips and strategies for creating a driver app:
Design an app for real people. Don’t neglect the importance of an intuitive and user-friendly UX for a driver app. A well-structured dashboard with detailed information about shipments and fast and secure payment processing is vital for both carrier and customer apps.
Make your app available offline. A carrier app should be able to download and store delivery information on a drivers phone so it can be accessed even when offline. This feature is a must for markets where internet connections are limited or unstable in some locations.
Comply with industry standards. Implementing FMCSA-approved electronic logging device (ELD) capabilities is mandatory for 3PL software solutions. This will let your users avoid the cost of proprietary e-logging hardware. You can learn from Penske Driver and Samsara Driver, two ELD-compliant custom apps that provide easy-to-use hours of service features.
Automate routine tasks. Implementing route planning functionality into your driver app will help drivers build and recalculate routes depending on traffic information.
Provide immediate help in case of an emergency. An SOS button and chat with the help center is a necessity rather than an add-on.
Also, you shouldn’t forget about a full-featured admin panel for employees at the operational level. Provide employees with functionality for managing lists of warehouses, drivers’ operational zones, and quote calculation formulas.
Organizing international shipments
If you operate in multiple countries and have a large network of warehouses all over the world, you can offer international shipments.
One good opportunity would be to meet the demand for international delivery to countries in which consumers can’t order direct delivery from e-commerce stores based in America, Europe, or China.
To organize the international shipment of e-commerce orders, you can enable this effective international shipping flow:
A user wants to make an order in an online store, but the store offers only domestic delivery or doesn’t deliver to the user’s country. To solve this problem, the user goes to your company’s website and registers in your system.
The user chooses the online store, enters the country of destination, and provides information about the order. After that, the user gets a quote for delivery and the address of your warehouse or a warehouse of your business partner. The user then enters this address on the checkout page of the online store’s e-commerce app or website.
The order is first delivered to your warehouse, after which you deliver it to the user.
The user gets the order from the online store.
Enabling this delivery flow can solve the problem of downtime in your warehouses and fill space on your vehicles for overseas shipments.
Set the stage for future scaling and consider options for growth
If you plan to expand to new markets or scale your company, you should think about a scalable system architecture from the very beginning of development. Best techniques to ensure scalability of supply chain management tools include, cloud computing services and a microservices architecture. As your logistics business grows, you might also want to consider implementing IoT development solutions.
Cloud computing services
If you store and process all data on your own servers, you have to spend money on costly equipment and electricity and hire a professional to configure and maintain your servers. In case you want to scale your system, you need to buy additional equipment.
Scaling cloud computing services is much easier. You can get additional storage space or features whenever you need them. Your cloud service provider will simply upgrade your package within minutes for an additional cost.
Most logistics companies tilt toward cloud-based platforms. For our projects, we commonly use AWS, a leading provider of cloud-based services like compute power, database storage, and content delivery.
Scaling a monolithic application requires scaling the whole application, even if there’s no need to scale every element. Thanks to the microservices approach, you can scale each element independently, making scaling more cost- and time-effective.
Also, every app built using a traditional monolithic architecture has limits in terms of scalability, so the more users you acquire, the more problems you’ll have with your app. With microservices, an app can be scaled gradually without performance issues.
Implementing IoT solutions
Reaching a certain point of maturity, you may experience the need to optimize processes and gain more visibility. Implementing IoT services can help improve core logistics operations, ensure data visibility, and improve the customer journey. Such solutions are also called the Industrial Internet of Things or IIoT. For logistic companies, these include remote systems management, fleet maintenance, and implementing smart logistics modules allowing to easily fully control all your operations.
As you can see, entering the B2C market can be challenging for third-party logistics companies. But with fine-tuned processes and software that’s ready to scale, you can easily overcome the challenges and get maximum profit from new business opportunities.