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The Amazon effect on your business

The Amazon effect on your business

At the CES Technology Show in Las Vegas, Continental showed off its Cube driverless shuttle featuring robotic dogs taking parcels from the vehicle to the customer’s front door¹.  Four legs are better than wheels for getting around pavements and obstacles. What is the world coming to? What is the Amazon effect on the transport industry? How might the future look?

The Amazon effect

Thanks to Amazon, customers (both B2C and B2B) have greater expectations.  They demand virtually immediate fulfilment of their orders, expecting delivery within the next day or two. This effect is forcing change across transport, logistics and the whole supply chain. This ever-moving situation is both a challenge and an opportunity for those trailer fleets that are willing to face the changes head-on. (source: Forbes)

The Effect of the effect

Among many different perspectives of how the Amazon effect might translate into consequences for the trucking and logistics industry is the vision elaborated by PwC’s Strategy& in its Global Truck Study 2018. It forecasts that “By 2030, trucking and logistics will be an ecosystem of autonomous vehicles directed by a digitized supply chain, combining driverless cable trucks and delivery hubs staffed by robots.”

In its very digital- and automation-driven view of the future, Strategy& highlights three conclusions:

  • Trucking logistics costs will decrease by 47% by 2030, mainly through reductions in labour.
  • Delivery lead times will fall by 40%.
  • From 2030, trucks, thanks to their autonomy, will be on the road 78% of the time compared to the current European average of 29%.

Strategy& also predicts that a more digitized supply chain will reduce administrative overhead, cut out time-consuming inventory and decrease insurance costs, bringing savings of up to 41% by 2030 compared to today’s supply chain.

Future trends

Innovation in transport and the supply chain does not stop at electric and driverless vehicles, the use of AI and predictive analytics to improve driver safety and retention or indeed better online freight brokering services to maximise full trailer loads or robotic dogs to deliver packages over the last few 100 metres. There are plenty of other interesting concepts being developed. The trends include:

  • Paperless for real-time information– The increasing digital automation and robotization of processes across the supply chain enable fleets to bring down their costs, accelerate their responses to new business opportunities and provide information to customers about deliveries in a quick and precise way. Abhinav Singh, a director at Intelenet Global Services observes that too many trailer fleets and other players in logistics rely on manual, often paper-based processes. In an era where providing real-time, accurate data can generate increased customer satisfaction and commercial benefit, logistics firms including trailer fleets need to streamline and automate their processes and improve the efficiency of their operating models to compete in the Amazon era.  (source: TTNews)
  • Going underground–Several commentators in a TTNews article entitled “Reimagining Trucking” believed that underground tunnels similar to those being dug by the Boring Company for transport between cities for pedestrians could be adapted to accommodate freight and take more trucks, containers and cargo off the road network.
  • Driver pool– Brittain Ladd, a supply chain consultant, proposes assembling a consortium of truck fleets that would work with a shared pool of drivers to transport cargo between two defined locations. The drivers would be paid an hourly rate instead of a per-mile rate. Ladd believes that this system could have transported all the loads carried in 2017 with two-thirds of the trucks. (source: TTNews)
  • Rethinking order fulfilment– Amazon is among the companies showing the way in order fulfilment. Amazon is crowdsourcing deliveries to external freight companies, delivering to car trunks, Amazon lockers, people’s private apartments and experimenting with drone delivery points. It is also developing an Amazon franchise delivery business model for which companies can apply. If you are operating on a large scale, maybe you should mirror Amazon and consider going “intermodal”. For example, Amazon has expanded its trailer fleet, created Amazon Air with 40 aircraft and made some initial moves into ocean-going freight. (source: “The Rise of Amazon Logistics” – TTNews)

TIP trailer rental and the Amazon Effect

TIP trailer rental enables you to gain flexible access to trailers whether you need one to fulfil a one-off delivery or you have signed a new contract with a customer for a long-term commitment. The flexibility of our rental contracts gives you the ability to use the best trailers and latest trailer technology without having to bear high upfront purchase costs and the overheads of ownership.

Customers renting trailers through TIP Trailer Services can benefit from preferential rental terms to increase their trailer fleet or reduce its size as demand fluctuates. TIP trailer rental customers also enjoy the benefits of TIP’s maintenance and repair services through its extensive Europe-wide network of workshops and mobile servicing vehicles. To find out how we can help your fleet take advantage of the Amazon effect with TIP trailer rental, please contact us via this TIP contact form.

 

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¹ Source: EuropeAutonews

Well-maintained trailers deliver a European e-commerce boom

European online retailing is enjoying a long phase of seemingly ever-lasting growth. Judging by recent media coverage, this growth looks unstoppable and provides a wonderful business opportunity for road freight transport companies with well-maintained trailer fleets. 

EU retail growth

Forrester Research predicts that e-commerce in Western Europe will grow 11.3% per year on average over the next five years, representing 13.9% of total retail sales by 2022. Excluding groceries, this number will rise to 20% of total retail sales in this region. [source: EcommerceNews.EU] 

Cross-border delivery

The prospects for e-commerce delivery across European borders are also promising. In-depth EU research into the internet purchasing habits of over 260,000 European respondents tells us that 33% of e-buyers made purchases from sellers in other EU countries in 2017 compared with 25% in 2012. Likewise, 22% of e-buyers bought from vendors outside the EU in 2017 compared to 12% in 2012.

Unsurprisingly, Luxembourgers made the most cross-border purchases with 74% buying from non-Luxembourg-based retailers. Turkey accounts for the lowest proportion of cross-border purchases (2%), just behind Romania (3%). [Source: EShopWorld]

In a further boost to European e-commerce and cross-border deliveries, the EU announced in March 2018 that it will establish a parcel delivery prices comparison website. This will enable consumers and businesses to have a reference point for domestic and cross-border delivery tariffs before opting for the best deal. According to an EU consultation, over two-thirds of consumers had given up on making online cross-border purchases because the delivery costs were too high.  A 2015 study found that cross-border parcel prices are on average 3 to 5 times higher than their domestic equivalents for all products. 

Top online sellers

Leading the European online sales league table is Amazon, which posted an online turnover of €38.5 billion in 2015. It is followed by Apple (€6.4 billion turnover), Dixons Carphone (€3.9 billion) and Cdiscount/Groupe Casino (€2.4 billion) [source: EShopWorld]

Analysing European online retailers from several angles, the IREU Top500 2017 list of European retailers found that Apple, Boots, H&M, Ikea, Nike, and Zara were statistically ahead of all the others and “represent the pinnacle of European multichannel retailing”. [Source: IREU Top500]

The greatest choice

Of the 800,000 online stores in Europe, 175,000 are in Germany. The UK is in second place with 108,000 online stores. The Netherlands takes third place with over 82,000 online stores. Researchers attribute this third place to several factors. They are the Netherlands’ high internet penetration rate and the fact that large e-commerce players including Amazon and eBay were comparatively slow to establish themselves in the Dutch market, thus enabling Dutch entrepreneurs to create local e-commerce sites that have enjoyed enduring popularity in the Netherlands. In fourth place is France with 75,000 online stores. [source:Ecommercenews.eu/Dataprovider]

Most popular buying categories

What online-purchased goods are you most likely to be transporting in your trailers?

The EU’s E-commerce Statistics for Individuals survey found that “clothes and sports goods” (64% of e-buyers) was the most popular online buying category. “Travel and accommodation” was the second category with 53% of e-buyers, followed by “household goods” (46%), “tickets for events” (39%) and “books, magazines and newspapers” (34%).

Keeping trailers in TIP top condition

To benefit from the exciting business opportunities provided by online retailing, you need to keep your trailers well-maintained in TIP top condition and, maximise their time on the road.

Having a trailer maintenance programme in place will minimise the likelihood of experiencing an unexpected trailer breakdown. All trailers need regular care, attention, and servicing. Consider outsourcing the maintenance and repair management programme to reliable, well-qualified experts such as TIP Trailer Services.

TIP provides a regularly scheduled trailer maintenance programme.  This helps you anticipate technical issues, keep costs under control and ensure that all trailers are fit for the road throughout the seasons.

Key trailer maintenance services

TIP’s trailer maintenance programme includes servicing, repair, regulatory compliance such as MOT, compulsory tests and periodic equipment tests.

The programme also covers tyre maintenance services and access to our Europe-wide roadside assistance services solution 24/7, 365 days per year.  We can manage repairs through our fixed price damage repair process. TIP can take responsibility for much of the non-core and time-consuming elements of your fleet administration. For further information on how you can keep your trailers in TIP top condition to win more online retail delivery contracts, please contact us using this form.

E-commerce drives trailer rental forward.

E-commerce drives trailer rental forward.

Trailer rental has always been easy to understand and to organise. In the case of an unexpected extra demand for transport, or when a trailer needed to leave the fleet for maintenance and repair, trailer rental was the easiest solution.

Trailer rental is also fast and cost-effective when you use the same supplier, like TIP Trailer Services. Once you are in the trailer rental system, it is just a matter of a phone call, email or even a WhatsApp to make sure to pick-up the trailer you need. And with over sixty pick-up points Europe, there’s always a trailer available that meets your demand.

Trailer rental market is changing

However, the trailer rental market is changing. Just like Apple changed the music industry, Booking disrupted the travel industry and Amazon turned the book selling industry upside down. Now, the transport and logistics industry is about to change as well, all thanks to the Internet. Online retailers grow rapidly and together with the growing use of mobile shoppers, this trend continues. Large online retailers like bol.com are investing highly in future e-commerce. And this will effect the use of trailer rental.

Dutch bol.com 1 million customers a day

Online warehouse bol.com offers nine million articles and is very popular with the Dutch and Belgian audience. Daily 1 million people stop and shop at bol.com. Daniel Ropers, MD at bol.com: “ To serve our clients and to manage our growth, we constantly invest in innovation. Our fast delivery makes client come back and order more. Our latest success is ‘Pick up today’. An article ordered before mid-day can be picked up at an Albert Heijn supermarket in your area. In 2017, bol.com opens a new order picking warehouse in Waalwijk, creating 1.000 new jobs for the region. And not to forget, lots of traffic for the transport industry.”

Zalando on the move

Another brand that brings more work the transport industry is Zalando, Europe’s leading online fashion platform for women, men and children. Zalando attracts over 160 million visits per month. Zalando offers customers a one-stop convenient shopping experience with an extensive selection fashion articles including shoes, apparel and accessories, with free delivery and returns. Can you imagine how much transport this generates?

The Zalando logistics network has three centrally located fulfillment centers in Germany, for an efficient service throughout Europe. The assortment of over 1,500 international brands ranges from popular global brands, fast fashion and local brands, and is complemented by private label products. Trucks and trailers drive 24/7 to the consumers in 15 European markets: Austria, Belgium, Denmark, Finland, France, Germany, Italy, Luxembourg, the Netherlands, Norway, Spain, Sweden, Switzerland, Poland and the United Kingdom.

Your secret weapon is trailer rental

E-commerce shops like Bol.com and Zalando will stimulate the need for transport, as volumes grow. Good news for the transport industry; e-commerce forces the transport industry to become more flexible than ever. Trailer pooling helps to have enough trailers on the ground when there is an extra demand. Trailer rental is your secret weapon, if you do not own a large trailer fleet and you could play ‘big-time’ at a certain moment.

Trailer rental is the solution

Reliable transport assets form a major chain that make the super fast supply chain stronger. If you get more work out of e-commerce, how can you deal with demands that are always changing? The answer here is: trailer rental. Expand your trailer fleet with 50,000 assets, all ready to transport your goods from A to Z and back from Z to anywhere your next freight is waiting.

Transporting goods has never been more fun to organise if TIP Trailer services is your business partner. We help with trailer rental and accommodate you along the journey. Are you involved in seasonal peaks or overloaded with transport demands? Contact TIP for your trailer rental solution.