October 13, 2020
Basically, on-demand logistics is the way we are able to keep track of our shipments and packages. It’s the set-up that allows end-users to communicate with shippers, mainly through online platforms. Usually there are other features also available to the user including GPS-based tracking of delivery vehicles, scheduling of orders, and an online booking system.
1. A thriving e-commerce market
E-commerce is growing. Year after year, it is claiming a bigger share of the global retail sales. And the projections show that it will continue to expand. More and more users are preferring online shopping, which allows them to shop whenever they want, from wherever they want. It also allows them to hunt for competitive prices and take advantage of deals and promotions. All that combined with reliable and timely delivery means for many users there is no turning back.
E-commerce holds the largest share within the on-demand logistics industry. Other categories include industrial deliveries, peer-to-peer shipments and moving and shifting services. It is no surprise then that growth in e-commerce is directly proportional to a rise of on-demand logistics.
2. Demand for efficient and timely deliveries
On-time delivery is a major driving force behind the growth of e-commerce. That in turns is fuelling the growth of on-demand logistics. Many traditional shippers are struggling to keep up with the high efficiency that on-demand logistics offers. And companies are changing their strategies to stay competitive, usually basing the updates on the new on-demand logistics model.
3. Overall cost-effectiveness and convenience
With the pressure on to improve their shipping and delivery, many companies find themselves unable to keep up. Usually, the cost of maintaining long-term logistics agreements end up making the strategy unfeasible. Production and demand constraints further complicate this set-up. At a time like this, on-demand logistics provides the opportunity to take advantage of a faster, more-efficient model without any strings. Businesses do not need to tie themselves up with lengthy contracts and can pay shipment by shipment. Even if companies are maintaining a delivery system of their own, on-demand logistics remain their go-to the moment there is a sudden increase in shipping volume or they just need a backup. During this pandemic, many major companies have turned to on-demand logistics to fill the gap left behind by their traditional set-up.
4. Value of real-time tracking
Real-time tracking of goods and deliveries is of immense importance to the growth and development of businesses. Firstly, it allows for companies to come up with more accurate scheduling based on accurate information about when goods are expected to arrive. That in turn has a ripple effect of efficiency down the line, helping with production and other shipping. Secondly, it gives companies a leg-up in identifying any possible pitfalls or delays. A longer-term study of the data can help zoom in on bottlenecks in the supply chain, and provide businesses the tool to resolve those problems and increase efficiency. Moreover, real-time tracking substantially reduces the risk of loss. Knowing the location of goods can enable companies to enhance security, thereby reducing the risk of theft or other losses.
What does it all mean?
On-demand logistics is rising, and will continue to grow. North America has the largest revenue share in the industry right now. Even now, the region faces acute driver shortages, leaving the system unable to cope with unexpected rise in demand. An already existing demand, combined with the growth of e-commerce and end-user preferences, mean on-demand logistics is projected to grow exponentially in the years to come.
A veteran logistics expert with decades of experience in freight distribution, operations and management.
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