A new study by global technology company Pitney Bowes shows that the growth of e-commerce has caused an increase not only in consumer shipping but also in manufacturing shipping volume. Instead of just directing a larger proportion of product toward e-commerce channels, brands are manufacturing more product overall and selling directly to consumers.
“Manufacturing shipping is largely driven by B2C growth,” said Jason Dies, EVP and VP of sending technology solutions at Pitney Bowes. “The rapid penetration of e-commerce and the ability of small businesses to cheaply develop a web presence has caused many smaller manufacturers to sell their products directly to consumers.”
Parcel volume has more than doubled over the last five years, with year-on-year growth of 17%. Pitney Bowes forecasts that global shipping will surpass 100 billion parcels by 2020 and 200 billion by 2025. Manufacturing shipping volume is predicted to experience a 6.5% compound annual growth rate. Simultaneously, e-commerce revenue is expected to continue to grow; the U.S. accounts for 38% of global parcel shipping revenue, amounting to $119 billion.
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But the proliferation of new DTC brands has coincided with growing awareness of environmental impact. The carbon footprint of shipping is a concern to many sustainability-minded brands, but eliminating shipping itself isn’t a possibility. Instead, Pitney Bowes recommends that companies explore ways to improve shipping efficiency. That allows a brand to continue to ship a high volume of product without compromising brand values.
“[There are] numerous ways to be environmentally friendly, such as reducing waste by choosing the right box for a given order; getting hubs closer to clients so trucks spend less time on the road; and consolidating items into a single order whenever possible,” said Dies.
Introducing these practices also benefits a brand’s bottom line because reduced packaging means lower costs, as do shorter transport times. Faster shipping has also been shown to be a consistent driving factor in customers’ decision to purchase, which gives a greater incentive to move inventory closer to the consumer. For brands, fortunately, shipping services are also investing in these types of solutions.
“The trend we see is that all carriers are focused on efficiency, especially around last-mile delivery, while trying to meet growing consumer expectations to be faster and free,” said Dies. “Carriers are [conducting trials on] new strategies to deliver the best customer experience, to keep costs down, boost productivity and generate profitability, such as forming partnerships, designing next-generation sending technologies and developing last-mile innovation.”
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