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Tag: Descartes

Delivery Efficiency is Paramount for Profitability

Posted on by David Priestman

The outlook for 2025 is challenging for any business involved in the retail fulfilment process – from online retailers to logistics providers. The changes to UK National Insurance and the National Living Wage made in the November 2024 budget has had serious financial ramifications for companies already operating on wafer-thin margins. Furthermore, consumer demand has also stalled, with the UK braced for weak consumer spending throughout the next 12 months as public confidence falls.

So how will the industry react? Where can retailers look to improve fortunes throughout 2025? Is it possible to cut costs without compromising the high level of experience customers now demand? Andrew Tavener, Head of Marketing, Descartes explores.

Impossible Squeeze

Britain’s largest retailers are warning of potentially thousands of job cuts this year as the industry braces for higher taxes and employment costs. A bleak Christmas shopping season failed to alleviate concerns about the outlook for 2025, with the British Retail Consortium (BRC) confirming sales growth over the “golden quarter” between October and December came close to flatlining. Consumer confidence is low. The UK’s economic growth projections have been downgraded. Retailers, therefore, have tough decisions to make. Not all will have the confidence and sheer size of brands such as Next which has said it will increase prices by 1% this year to help offset a £67m rise in wage costs driven by budget tax changes.

At the same time, of course, customers’ expectations continue to rise. If consumers are to be enticed into spending, they want to enjoy every aspect of the transaction – both online and in person. There is no tolerance for delivery mistakes. As the Home Delivery Consumer Sentiment Study 2024 confirms, problems such as expensive electrical items left on the doorstep in the rain or delivery confirmation photographs of someone else’s doorstep are a fast track to customer loss.

Workforce Shortages
Andrew Tavener, Descartes

How will companies respond to this squeeze? Where are the opportunities to impose tighter cost control while also providing an exceptional customer experience and, of course, attaining legislative sustainability goals while accommodating customers’ environmental expectations for green delivery?

Optimise and Communicate

For an industry already operating on tight margins, these new financial pressures are potentially devastating. However, there are clear opportunities to improve performance whilst also improving the customer experience. The simplest, quickest and least expensive step is to ensure customers are kept informed at every stage of the fulfilment process, especially the last mile.

Managing delivery expectations effectively not only improves customer satisfaction it also reduces the missed deliveries that are so costly for any logistics business. In addition to minimising the number of expensive redeliveries, improving first time delivery performance avoids the risk of product damage or loss that can occur when customers are not at home. Leveraging notifications to reduce costs and improve the customer experience should be a key objective for any retailer over the next 12 months.

The entire delivery operation can also be significantly improved through intelligent, real-time route optimisation that improves delivery density. Artificial intelligence (AI) and machine learning will also play an increasing role throughout 2025 to further maximise the value of the existing fleet. By comparing planned delivery schedules with the actual performance over a period of time, AI can highlight specific addresses that cause problems – from a certain location that demands additional time to make the delivery to the impact of school drop off on local roads – to achieve far more delivery certainty.

Companies actively including essential driver feedback – such as potholes slowing down traffic – into the mix, can also avoid delays and improve overall delivery performance.

Encourage Behavioural Change

A key trend throughout 2025 will be the move towards driving behavioural change at the checkout to further enhance delivery cost effectiveness. Retailers can leverage up-to-date delivery information at the checkout to provide customers with intelligent date and time choices that support more efficient delivery schedules. Encouraging a customer to opt for the same delivery time as a neighbour by offering a low cost, even free delivery, for example, radically reduces travel distance and allows the retailer to be far more sophisticated about maximising capacity and sharing resources across defined geographic regions. Adopting this approach has enabled John Lewis to increase delivery capacity by 35% without adding vehicles or drivers and reduce fulfilment costs by £1.8 million.

As retailers gain confidence in exploring intelligence to meet different economic goals and customer expectations, the model will become ever more sophisticated. From matching delivery offers to customer delivery personas to including information around clean air zones and traffic restrictions within the routing model, retailers can ensure customer promises can be achieved without incurring profit denting fines. Sustainability goals can also be automatically factored into the process, allowing retailers to continually amend delivery options and prices, using low cost local ‘green’ deliveries to further improve customer perception and environmental performance in decarbonising fleet operations.

Critically, this process allows retailers to encourage customers towards delivery options that suit existing delivery schedules. This not only improves delivery density and gains operational cost benefits without adding stress to drivers, it enables retailers to meet rising customer expectations without resorting to the over-promising that can lead to disappointment.

Retailers have been improving their delivery performance year on year but the new financial pressures facing businesses throughout 2025 are raising the stakes. The letter written by over 80 UK retailers to UK chancellor Rachel Reeves in November 2024 predicted the challenges created by changes to National Insurance, the National Living Wage, and the ongoing packaging levy. With the latest BRC sales figures confirming their worst fears and the economic outlook for the UK looking bleak, efficient, effective and timely operational performance is now critical.

Real-time optimisation, in tandem with the use of intelligence to drive changes in consumer behaviour, will be key to achieving essential operational change. Using AI to continually assess both delivery performance and consumer persona response will allow retailers to further refine the process. How do customers respond to low-cost delivery offers in January following the festive overspend compared to peak season? Are consumers more likely to embrace green delivery slots if the retailer shares CO2 calculations or are price and convenience bigger incentives? The ability to leverage customers’ desires and behaviours will become an increasingly key weapon this year as retailers push to control costs without compromising experience.

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How to Optimise your Shipper TMS Implementation

Posted on by David Priestman

In any software selection process, costs are a key consideration. In the case of a shipper Transport Management System (TMS), there are two sets of costs: recurring costs, which typically relate to the number of shipments flowing through the system; and one-off implementation costs. While recurring costs are more likely to correlate to volume, value and return-on-investment (ROI), it’s important for any shipper to understand, evaluate and minimise their one-time costs, while optimising their software for long-term value.

Elmer Spruijt (pictured below), VP, Global Sales, Descartes, explains what shippers need to know about TMS implementation costs.

Investigate your needs

Any shipper looking to acquire a transport management system (TMS) will be looking at how the various solutions on the market can optimise their operations. However, with the cost of a TMS anything from 30,000 EUR to 900,000 EUR (£25,000 and £750,000), it is key to have a clear understanding of the value and benefits you need your new TMS to deliver – and look at the costs in relation to the value created. Based on capabilities, related costs, and expected value you can make the right choice for your business, streamlining implementation and set up, and ensuring longevity of the system.

Shipper TMS Implementation

The main influencers of TMS implementation costs to consider, include:

1. Connectivity with carriers/forwarders

Automation is the key driver of operational benefits. Particularly for high-volume shippers an efficient and effective operation is essential. However, automation not only requires the setup of connections with internal systems like your ERP, but also with external carriers/forwarders for the booking/tendering of shipments; exchanging instructions; status messages and alerts; and invoicing. All of these factors should be included in any TMS you select. Yet, setting up these connections requires effort and cost, and if you work with several carriers/forwarders this can be significant.

Some TMS solutions have a published API which allows any external carrier/forwarder to connect their systems to the TMS. However, many carriers/forwarders are not willing or able to create the connection, and even if they are, they will most likely want to charge the integration cost to you. This makes having a TMS provider with a large, connected network and the ability to easily add new carriers/forwarders crucial to keeping connectivity costs under control.

2. Complexity of business rules

The more advanced shipper TMS solutions can handle many different scenarios (transport modes, different freight types, regional differences, etc.) which typically require configuration, while the more basic solutions often only allow for one process flow and set of rules with minimum deviations. If your current process for working with suppliers and carriers/forwarders is not supported by the TMS, you may struggle to use it effectively and fail to achieve the desired results.

The word here is caution, as many shippers can be inclined to choose a sleek, modern, and inexpensive solution, only to discover it doesn’t align with their workflow. The consequences are likely to include manual workarounds and even termination of the contract with the TMS vendor after a few months.

Almost all shippers need the ability to define advanced business rules in their TMS to automatically consolidate shipments, select the optimal transport mode, build multi-stop loads, follow routing guide logic, and automatically select the best carrier. Securing expert support during the initial implementation is essential for maximising the benefits of your TMS, although it does involve effort and expense. While companies want to keep costs to a minimum, implementation costs that configure and connect the TMS correctly will allow you to reap the benefits from the TMS for the next 10+ years.

3. Third-party solutions and involvement

A modern and complete TMS should handle all modes of transport; connect with all involved carriers/forwarders; automate the information exchange; and provide real-time visibility. However, some TMS providers still rely on third-party solutions to provide some capabilities, for example real-time visibility and parcel rate shopping/shipping. The need to involve third-party solutions and often third-party resources during the implementation adds complexity and requires building/configuring interfaces to facilitate data model alignment and data exchange. These will obviously not only impact the initial setup effort and costs, but also impact the future maintenance effort.

4. Project team expertise with the selected TMS

Some large ERP vendors, who also provide a transport management component, may rely on external partners to implement their TM solutions. With the complexity and different types and levels of functionality involved in a TM implementation, it may be the case that the project is staffed with individuals inexperienced in your specific requirements. Not only is this likely to take more time (and cost) to complete the implementation, there is also risk of a sub-optimal TMS configuration.

A project team experienced with your selected TM solution, and with demonstrable understanding of your business needs, will – in contrast – bring best practices and standards that can greatly reduce the effort and cost of setting up the TMS, while ensuring system configuration that will maximise your savings potential. How to save money on a TMS implementation before you start?

There are three fundamental ways to save costs:

1. Take the opportunity to consolidate the number of carriers/forwarders you are working with, or let smaller providers connect via a carrier portal rather than a direct API or EDI connection. This means they will need to manually accept shipments/loads while you receive automated updates in your TMS. Automated real-time visibility may still be available with those carriers through a separate connection to an integrated visibility platform like Descartes MacroPoint™.

2. Limit the number of solution vendors involved in your overall TMS. This will have the most impact in terms of implementation time, cost, and the required implementation team expertise. Having one team of true experts overseeing your complete solution will result in optimised process handling and a reduced risk of unexpected implementation complications and costs.

3. Beyond these external factors, the active involvement of your own team is essential. Having the right stakeholders (including key users) participate and reach consensus on the optimal processes, along with reliable IT support and a project manager from your side, will significantly influence project costs, timeline, and overall success.

Conclusion

Shippers that have implemented a TMS have indicated that the analysis and design phase is crucial to the overall project. Make sure that the right people allocate sufficient time to deliver a robust solution design document, as well as participate in acceptance testing which will minimise change requests, and timing delays due to bugs throughout the project. Optimising your TMS implementation by understanding and scoping your needs up front, examining ways to consolidate the complexity of the project, and ensuring the right stakeholders are involved in each step of the process will help ensure that both your one-time costs are limited, and you are setting yourself up for long-term value.

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Descartes Acquires Sellercloud

Posted on by Keith McKinley

Descartes Systems Group, supplier of software to logistics-intensive businesses in commerce, announced that it has acquired Sellercloud, a provider of omnichannel ecommerce solutions.

Based in the US, Sellercloud supports small and mid-market retailers, distributors, wholesalers, and manufacturers with multi-channel ecommerce operations. Sellercloud’s Inventory Management Solutions and Order Management Solutions help customers synchronize, plan and manage inventory levels across multiple sales channels. In addition, Sellercloud helps product sellers orchestrate the fulfillment process from routing orders to the right warehouse to enabling warehouse staff to better manage order picking, packing, shipping, and returns.

“Our integrated ecommerce solutions are designed to help product sellers through all phases of their growth, from a single product startup to a global multi-channel enterprise,” said Mikel Richardson (pictured), General Manager of ecommerce at Descartes. “Sellercloud expands our product suite with advanced inventory and order management capabilities that our customers have been asking for. When combined with Descartes’ existing ecommerce shipping, fulfilment and warehouse management solutions, we believe the result is a truly differentiated offering to manage the full lifecycle of domestic and cross-border ecommerce shipments.”

Mikel Richardson

“We continue to listen to our customers for key areas of investment in our Global Logistics Network,” said Edward J. Ryan, Descartes’ CEO. “Sellercloud directly complements our ecommerce investments in XPS, ShipRush, pixi, and Peoplevox, and we’re excited to welcome the Sellercloud employees, customers and partners into the Descartes family.”

Sellercloud is headquartered in New Jersey. Descartes acquired Sellercloud for up-front consideration of approximately US $110 million satisfied from cash on hand, plus additional potential performance-based consideration. The maximum amount payable under the all-cash performance-based earn-out is US $20 million, based on the combined business achieving revenue-based targets in each of the first two years post-acquisition. Any earn-out is expected to be paid in fiscal 2026 and fiscal 2027.

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Tariffs and Trade Barriers as Top Concern of Supply Chain Leaders

Posted on by David Priestman

Descartes Systems Group, a global leader in uniting logistics-intensive businesses in commerce, released findings from its 2024 Supply Chain Intelligence Report: Escalating Challenges for Global Supply Chain Leaders survey, which examined the most significant global trade challenges facing logistics and supply chain leaders today. The study showed that 48% of respondents identified rising tariffs and trade barriers as their top concern, closely followed by supply chain disruptions at 45% and geopolitical instability at 41%. Moreover, tariffs and trade barriers ranked as the priority issue regardless of company size, as respondents at companies with less than 250 employees, 251-500, 501-1,000, 1,001-50,000 and 50,000+ employees all cited it as the most significant issue they are currently facing.

These challenges and others (see Figure 1) highlight the need among organizations involved in international trade to sharpen their supply chain analytics practices to help build more resilient supply chain networks, including having robust, technology-enabled insights to keep pace with frequent and complex tariff updates, quickly find new markets, secure better sources of supply and acquire timely and high quality competitive intelligence.

Figure 1: Respondents’ top challenges in international trade operations

 

Results also showed that the impact of top global trade challenges on organizations can potentially vary by factors other than company size, including business growth, country and industry. For example, tariffs and trade barriers were more concerning for companies expecting greater than 15% growth (51%) than for those companies with shrinking/limited to no growth (43%).
“Evolving tariffs and trade policies are one of a number of complex issues requiring organizations to build more resilience into their supply chains through compliance, technology and strategic planning,” said Jackson Wood (pictured), Director, Industry Strategy at Descartes. “With the potential for the incoming U.S. administration to impose new and additional tariffs on a wide variety of goods and countries of origin, U.S. importers may need to significantly re-engineer their sourcing strategies to mitigate potentially higher costs.”

Non tariff trade barriers

Descartes and SAPIO Research surveyed 978 supply chain intelligence leaders in key trading nations across Europe, North and South America, and Asia-Pacific. The goal was to understand the nature of the global trade challenges they were facing and to identify if concerns varied by factors such as country, industry, company size and business growth. Respondents are members of company leadership teams, from management level to Chief Executive Officer or Owner. To learn more, read the 2024 Supply Chain Intelligence Report: Escalating Challenges for Global Supply Chain Leaders report.

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The Transformative Impact of AI Tech Adoption in Logistics

Posted on by David Priestman

In the ever-growing and highly competitive logistics sector, automation has become indispensable, with the latest innovations in the form of Artificial Intelligence (AI) transforming business dynamics more radically than ever before. The potential of this technology to enhance productivity is almost unfathomable, positively affecting both the profitability and efficiency of companies, as well as their ability to foster economic growth.

According to 2023 statistics from the US International Trade Administration, the UK AI market was worth more than £16.8 billion and is expected to grow to £801.6 billion by 2035, while government research suggests that around one in six UK businesses has embraced at least one form of the technology.

This growth in AI adoption opens up a range of possibilities for companies in the logistics sector. Taking the data that can be gleaned from connected devices, AI can transform it into useful insights to be managed by Robotic Process Automation (RPA) solutions. In this way, simple and repetitive tasks, usually performed manually by employees, are automated, which generates opportunities to embrace more strategic value-added tasks.

“With the help of Artificial Intelligence, we can accurately predict the demand for goods and services and generate possible scenarios from current market conditions. This will allow logistics companies to allocate resources efficiently, plan transportation routes and optimise inventory levels, which results in a significant reduction in the operating costs that presente a management challenge: fuel, labour and vehicle maintenance,” says Erick Martins (pictured), Solutions Consultant at Descartes Systems Group.

“For players in the sector, having a tool that offers predictability, while allowing them to reduce costs and overcomes possible hurdles in processes, is strategic and makes it an indispensable resource for the coming years.” Adding operational efficiency and improving customer experience. “The application of AI to logistics operations is a trend that should expand the frontiers of the sector in the coming years,” he adds.

The implementation of automation solutions in the areas of logistics and supply chain opens up a new world of potential for companies as they allow them to work with large volumes of data, analysing it in real time, spotting trends and anomalies – and making decisions that result in tangible business benefit.

Here, therefore, are four reasons to incorporate AI and machine learning-based connectivity tools:

1. High return on investment by reducing mileage, fuel consumption and driver time, thus increasing productivity. Thanks to machine learning techniques, more deliveries can be made with fewer vehicles, resulting in significant savings. These improvements not only affect the operational aspect, but also have an impact on the administrative processes of logistics, including customer service, customer retention, availability and visibility for all departments involved.

2. High availability combined with security. The Software-as-a-Service (SaaS) model is a trend that is increasingly being adopted by businesses. This approach eliminates the need to acquire, install and maintain software, as it only requires the payment of a monthly fee that allows access to various functionalities that are always updated and in compliance with current regulations.

3. Integration into a single system. Integrating all platforms with a single provider offers several advantages, such as the ability to prioritise tasks according to their importance, including route planning, last-mile execution, and delivery confirmation. The route planning tool combines information on customer restrictions, vehicles, service windows, and routes, as well as the definition of rest stops and other details that allow you to create an optimal route.

4. Global visibility of traffic (both customer and order). Today’s technology offers real-time visibility into trucks, routes, orders, and customers for all functions of every organisation. This makes it possible to compare what is planned with what is actually being executed, identify driver locations and evaluate their performance. In addition, analytical tools can be used to generate reports and dashboards, facilitating route management and adjustments.

“Given the speed at which the segment is growing and the increasingly demanding needs of consumers, AI will soon be part of a strategic approach within companies with the aim of optimising efficiency, improving service quality and maintaining competitiveness in a market as dynamic and agile as logistics,” concludes Martins.

Conclusion

The implementation of AI in logistics operations represents the next crucial step in the modernisation and optimisation of processes in this sector. With its immense potential, AI will be an indispensable tool defining the future of transportation and logistics. However, integrating these tools into existing systems and adapting processes to maximise their benefit is key.

It is essential to be willing to adapt, acquire new knowledge and skills to be prepared for the changes that AI will bring. Its strategic adoption will allow businesses to stay competitive and meet the demands of an ever-changing and evolving market.

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Will Workforce Shortages cause Peak Season Chaos

Posted on by David Priestman

Workforce shortages are affecting three quarters of logistics companies. With peak season fast approaching, what steps are being taken to avoid customer disappointment asks Andrew Tavener (pictured), Head of Marketing, Descartes?

Peak Performance

Supply chain performance is being undermined by an endemic lack of staff – with 37% of companies experiencing high workforce shortages. The biggest problems are in transportation operations, closely followed by warehouse operations, and the impacts are being felt throughout the supply chain, from financial performance to customer service.

Staff shortages cause pressures throughout the year, but the problems are highlighted during peak season. Black Friday only works as a great opportunity to offload discounted stock, for example, if the fulfilment process is super-efficient. Any problems, from inaccurate picking to product damage or delivery errors, will rapidly wipe out any margin on a discounted item. The success of the Christmas buying frenzy depends, obviously, on customers receiving goods before 25th December – missed or late deliveries will lead to a massive spike in new year returns, refunds and product write-offs.

Add in the potential loss of customers following bad experiences and inefficient fulfilment can wipe out the vital revenue boost retailers demand from peak season.

Avoiding Mistakes

Stressed people inevitably make mistakes – and understaffed warehouses and delivery teams are often under pressure, especially when demand spikes. With no signs of the workforce shortages abating, how are companies looking to improve fulfilment and deliver an optimal peak season customer experience?

Scaling up to meet additional demand is becoming harder year in year due to the lack of available staff and so automation has become a priority – 58% of firms say senior management believe technology is key to mitigating the impact of the current workforce market. By prioritising both driver performance and warehouse operations, companies are looking to eradicate the repetitive, time-consuming tasks that deliver little added value and put enormous pressure on staff during peak seasons.

Improving driver productivity has an immediate impact on delivery capacity and, as a result, customer experience, with companies exploring innovations in areas such as delivery route optimisation (54%) and driver mobile productivity (45%).

Knowledge Workers

Companies are not only struggling to recruit and retain warehouse and delivery staff; in fact, knowledge worker and manager positions are the hardest to fill. With 58% of companies confirming that workforce shortages have impacted customer services, they are turning to automation. Tools such as real-time shipment tracking can release knowledge workers from time wasted chasing information to focus on the analysis and planning required to optimise the business.

Real-time shipment tracking also meets customer expectations for shipment visibility – and, by providing automated updates, a company can eliminate highly manually-intensive calls and emails and release pressure on customer service teams.

Improving automation not only reduces the stress for existing employees – and hence cuts the risk of errors that can damage the customer experience – it can also play a vital role in improving recruitment. Workers are not attracted to tedious, repetitive work and highly manual working environments are a serious deterrent, especially for millennial and Gen Z workers. Investing in workforce skills and providing an automated working environment that allows individuals to embrace added-value tasks enables organisations to improve recruitment and retention, and create a workforce with the capacity to respond effectively to the demands of peak season.

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Cathay Cargo use New Technology to Transport Giant Panda

Posted on by David Priestman

Cathay Cargo, a global provider of air freight services, successfully utilized Descartes Systems Group’s Bluetooth® Low Energy air cargo tracking solution for real-time monitoring of the condition and location of Giant Pandas An An and Ke Ke during their safe journey from Chengdu, China to Hong Kong. The pandas arrived at Hong Kong International Airport on September 26, 2024. Descartes, the global leader in uniting logistics-intensive businesses in commerce, provided the technology that ensured the animals’ well-being throughout the transport.

“We’re excited that our technology played a role in the safe arrival of such a special shipment from Chengdu to Hong Kong,” said Frank Hung, VP Sales and Marketing at Descartes. “With our advanced IoT-based tracking capabilities, our customers are not only able to monitor the location of their shipments in real-time, but also shipment conditions such as temperature, light, vibration and humidity—which takes on an even more important dimension for Cathay Cargo in this unique situation.”

Cathay Cargo has used the Descartes solution as part of its Ultra Track cargo tracking service since 2021. The solution helps the air cargo carrier provide customers with real-time shipment location and condition status for airport-to-airport moves of high value goods such as electronics, perishables and pharmaceuticals. The Ultra Track service is available in 29 airports across Cathay Cargo’s network.

The Descartes air cargo tracking solution is designed to help airlines and ground handling agents (GHA) provide forwarding and shipper customers with end-to-end shipment visibility. Descartes Bluetooth® Low Energy powered tags placed on Unit Load Devices (ULD) or pallets provide location and condition status data that is captured by Descartes Bluetooth® Low Energy readers. Readers are part of the Descartes global Internet of Things (IoT) network and a Descartes Global Logistics Network™ service. Shipment status can be tracked whether goods are in the air or on the ground to help the air cargo community automate the end-to-end tracking of freight location and shipment status information such as precise temperature, movement, shock, light and humidity.

“We’re pleased to have supported Cathay Cargo in this extraordinary endeavor,” said Scott Sangster, General Manager, Logistics Service Providers at Descartes. “Customers with temperature-controlled, time-sensitive and other specialized cargo expect to be kept informed of the location, condition, and chain of custody of their air shipment throughout its journey. By building out our IoT network in more geographies, deploying active readers across more locations and expanding the reach of the network, we’re helping the air cargo industry meet requirements for real-time, multi-dimensional cargo visibility and facilitate more secure, efficient, and responsive logistics operations.”

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Taking the Uncertainty out of Peak Season 2024

Posted on by David Priestman

Peak season 2023 was challenging for retailers. Cost of living concerns dented consumer confidence, whilst global supply chain problems led to delays and cost increases for retailers. While these issues lie outside the control of any business, continued inefficiency in last mile delivery undermined both customer experience and profitability.

According to the latest Home Delivery Consumer Sentiment Study 2024, two thirds (67%) of consumers experienced a problem with a delivery in the three month period surveyed. With 63% of those consumers responding by taking some form of action against the retailer or delivery company, or both, how are retailers gearing up for peak season 2024?

Supply chain and economic uncertainty is inevitable, affecting not only customer experience and profit margins but also key strategic objectives such as environmental commitments. The onus is on retailers to control the controllables and eradicate uncertainty from the consumer fulfilment process, especially at peak season, explains Andrew Tavener, Head of Marketing, Descartes.

No Second Chances

As the third largest market for eCommerce, UK retailers should be leading the way with highly efficient fulfilment processes and an optimised consumer experience. With an expected increase of 7.3% in 2024, the market continues to boom and ecommerce increasingly dominates retail revenue. Yet the last mile fulfilment processes continue to disappoint, especially with the timeliness of delivery: 22% of consumers report a delivery came much later than promised and 21% at a different time.

Ensuring a consistent, timely delivery experience becomes even more difficult during times of peaks in demand. Adding resources to manage the peaks is expensive and will rapidly eradicate margin during times of low utilisation. Alternatively, companies can opt to resource for the normal or average run rate and try to buy-in delivery capacity for managing peaks. Yet with workforce shortages affecting three quarters (74%) of companies, over-resourcing or scaling up on demand is easier said than done.

Furthermore, when customers’ perceptions are seriously influenced by the quality of the delivery, can retailers really afford to rely on third-party temporary resources, especially given the significant contribution to revenue provided by peak season sales? The majority (63%) of those experiencing a delivery problem respond by taking an action that has an impact on both reputation and bottom line: almost a quarter (23%) of consumers say they lost trust in the delivery company and 19% would not order from that retailer again. There is no second chance: when two thirds of customers are regularly experiencing a delivery problem, and one fifth are lost to the business, the cost of fulfilment uncertainty is extremely significant.

Levelling Out Demand

Retailers cannot afford to make delivery promises they cannot meet – and that challenge becomes even more telling at peak season. How much does it cost the retailer when a discounted Black Friday offer is delivered to the wrong address or damaged? What are the implications for the bottom line when Christmas orders finally arrive in January and are immediately returned?

The good news for retailers is that speed of delivery is becoming less important year on year: far fewer customers are prepared to pay for fast delivery, preferring a lower cost alternative. Many customers also prioritise a precise delivery window over next day options, wanting the certainty of a delivery that arrives when they are at home. There is also more interest in environmentally friendly options, especially within younger generations.

Retailers can leverage these delivery personas to flatten out demand and improve fulfilment certainty. Price conscious consumers don’t need an expensive next day delivery option, so don’t offer it. Environmentally aware individuals will respond well to delivery choices that include ‘green slots’ where deliveries are consolidated in a specific area to reduce miles travelled.

Embedding Predictability

Retailers can influence buyer behaviour by offering achievable delivery options at the Point of Sale, including dates several weeks in advance, based on real-time insight into existing commitments and delivery resources. Continually monitoring the capacity planning process, with in-bound orders constantly assessed to present consumers with a range of delivery options and prices that accurately reflect the retailer’s capacity and cost model imposes far more certainty over the entire last mile process.

With a view of the total demand and resources available across all geographic areas, a retailer can become far more sophisticated about maximising capacity and sharing resources across defined geographic regions. Adopting this approach has enabled John Lewis to increase delivery capacity by 35% without adding vehicles or drivers, and reduced fulfilment costs by £1.8 million.

More efficient distribution also enables retailers to advance sustainability objectives by default through reduced mileage. Furthermore, the ability to nudge customers towards ‘green’ delivery slots that maximise delivery density and reduce costs allows a business to reinforce Environmental Social and Governance (ESG) goals.

Boosting Confidence

Online spending will continue to grow, but a sophisticated customer base has high expectations. They want to feel confident at every step in the ecommerce transaction, especially fulfilment. By flattening out demand and eradicating false promises, intelligence led capacity management reduces the risk of delivery problems, reinforcing the quality and consistency of customer experience.

Building on this improved experience, retailers and delivery companies can avoid further consumer anxiety through improved communication at every touch point. Advance notice of the delivery window is a given, but the addition of on-going updates throughout the process will minimise the risk of missed deliveries whilst also reinforcing customer confidence. Problems happen – but keeping customers up to date in the event of accident, traffic or breakdowns will foster a far better relationship than leaving people in the dark about why delivery promises have been missed.

It’s also important to add in the strong chain of custody, especially for the more expensive goods that are often purchased during peak season. Proof of delivery, including picture and signature capture, is now a core component of a good delivery experience for high value items, and increasingly key to boosting customer confidence.

Conclusion

There are many aspects of retail operations that are outside the business’ control. Supply chain disruptions can be caused by geopolitical change, weather events, even the widespread shortage of mariners. Inflation and interest rates affect not only operational costs but customer behaviour. There are, however, significant improvements that can be made to eradicate fulfilment uncertainty and transform customer confidence.

Embedding real-time capacity planning in the ecommerce model allows retailers to eradicate uneconomic delivery slots, protecting margins. Offering only achievable, affordable delivery options based on in depth capacity information boosts delivery performance and minimise the chances of problems that can undermine customer perception, even lead to customer loss. And by mapping customer delivery personas into the delivery choices provided, with notifications of progress throughout the entire delivery process can proactively enhance customer perception. In an uncertain world, it’s time for retailers to add essential predictability to the ecommerce retail model.

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Logistics Software Webinar

Posted on by David Priestman

Selecting the right logistics software is crucial for optimising supply chain operations, but the process goes beyond just issuing an RFI or RFP. Watch our logistics software webinar, entitled ‘Logistics Software: Beyond the RFI & the RFP. Achieve Supply Chain Excellence’, where industry experts will guide you through mastering the logistics software selection and procurement process.

Requesting quotes, proposals and further information from vendors of ERP, TMS, WMS, SCM, SCE and other supply chain software solutions, is just the beginning of thte process. Are you planning to buy new logistics software in the next 12 months?

In this logistics software Webinar you’ll learn how to:

  • Define clear requirements for effective RFI and RFP processes.
  • Evaluate and compare solutions beyond surface-level features.
  • Engage stakeholders for alignment and buy-in.
  • Avoid common pitfalls in software selection.

Logistics Software Webinar

Editor Peter MacLeod is joined by Gary Rosier-Taylor, VP of Fleet Sales for Descartes, and Phil Turton of Viewpoint Analysis (pictured below), an independent technology expert on evaluating and purchasing the right IT systems for your logistics operations. He argues that software and IT procurement is broken right now, with the vendor selection process taking too long. Buyers should spend time on their short list and streamline everything. Avoid getting what you asked for, rather than what you need. Try selling to the salesperson and using a ‘rapid RFP’. Score vendors appropriately after every interaction. Do you trust them to deliver?

What sort of additional knowledge does a buyer need to extract from a vendor to trim the shortlist?

  • Whether you’re in transport and distribution management or IT procurement, this logistics software webinar will equip you with the strategies to make informed decisions. Watch now

Descartes (Nasdaq:DSGX) (TSX:DSG) is a global leader in providing on-demand, software-as-a-service solutions focused on improving the productivity, security and sustainability of logistics-intensive businesses. Customers use its modular, software-as-a-service solutions to route, track and help improve the safety, performance and compliance of delivery resources; plan, allocate and execute shipments; rate, audit and pay transportation invoices; access global trade data; file customs and security documents for imports and exports; and complete numerous other logistics processes by participating in the world’s largest, collaborative multimodal logistics community.

Viewpoint Analysis are Technology Matchmakers – helping business leaders find and select enterprise technology, and IT vendors to be found. There are thousands of software vendors in the enterprise arena. As a business with a technology need, how do you know what’s available and which solution is right for you? Viewpoint takes business leaders from problem to vendor selection with our Technology Reference Guides, Technology Innovation Series, Matchmaker Service, and Rapid RFI and RFPs.

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Scope 3 CO2 Reporting is in the Spotlight

Posted on by David Priestman

With the second deadline for Corporate Social Responsibility Directive (CSRD) compliance on the horizon, now is the time for shippers that qualify as “large undertakings” to take action – or risk not meeting the impending deadline, as Eric Geerts (pictured), Senior Director of Product Management at Descartes, outlines.

The second wave

Sustainability has long since ceased to be a semi-vague term that companies use within their marketing and corporate communications to appease customers, partners and investors. Today, sustainability must be tangible and demonstrable in terms of performance and ethics. Stakeholders not only want to see the finances, but also want to know, for instance, a company’s CO2 emissions, increasingly important in the context of so-called Scope 3 emissions – indirect emissions caused by another organisation’s activities in another’s value chain, such as the transport of goods.

To regulate this, the European Union has developed a reporting requirement – the Corporate Social Responsibility Directive (CSRD). Under CSRD, from January 2024 the first wave of businesses – those listed on an EU-regulated market exchange – had to comply with disclosure requirements across 12 European Sustainability Reporting Standards (ESRS), covering four categories:
• Cross-cutting: General principles and general disclosures.
• Environmental: Climate change, pollution, water and marine resources, biodiversity and ecosystems, resource use and circular economy.
• Social: Own workforce, workers in the value chain, affected communities, consumers and users.
• Governance: Business conduct.

From January 2025, the second wave of EU-based business – those classified as “large undertakings” (any listed or non-listed company that has at least EUR 25 million in total assets; and / or at least EUR 50 million in net turnover; and / or at least 250 employees (average) will also have to be able to report on these disclosure requirements. Non-EU companies (including EU subsidiaries of a UK parent) that operate in the EU may now also fall under the CSRD scope. They shall be required to provide sustainability disclosure if:
• their net turnover generated in the EU (at the consolidated or individual level) exceeds EUR 150 million for each of the last two consecutive financial years
• they have at least one subsidiary (listed or defined as a “large undertaking”) in the EU or an EU branch with an annual net turnover exceeding EUR 40 million in the previous financial year.

For shippers, this means having the capability to provide detailed information on their Scope 3 CO2 emissions. And of course, this can only be done on the basis of the right data and insights. In most organisations, this should be well on the corporate agenda. But for those who have yet to start, it is now five minutes to midnight – and the clock is ticking.

Lack of data and insights

Being able to measure Scope 3 CO2 emissions is a challenge. Typically, companies do not have sufficient data or fail to extract the right insights from that information. Moreover, the CSRD requires far more accurate data reporting than has previously been expected of them. Historically, for example, organisations may have relied on the emissions of one container to determine the impact of hundreds of others. In practice, however, numerous factors affect emissions; factors such as type of vessel, route, weather, speed, or load. You also need a solution for the different transport modes. Under CSRD, extrapolation of data won’t be an option; everything will have to be done at a far more granular level.

Everything, therefore, starts with the right data: both in-house data and data coming from external parties, such as carriers. On top of that you need a lot of master data, such as for example the carbon intensity indicator of every vessel, and the right calculation algorithms. All that then needs to be integrated to generate insights for reporting and compliance. Manually collecting this information and tying it together in an Excel sheet is obviously a hopeless task. Fortunately, technology can lend a hand. Many organisations – particularly those who became bound by the compliance requirements of CSRD in wave one – have therefore opted for a Transport Management System (TMS) to gain access to a vast amount of accurate data and CO2 reports, saving a vast amount of time and money in making that information transparent.

Transport Management System

So what exactly does such a TMS do? A TMS is a software application that manages the planning, execution and tracking of physical movements of goods, as well as the freight settlement. The technology helps with various challenges facing shippers: from order planning and transport selection to transport execution and financial settlement. A TMS brings together business-critical data and saves organisations a huge amount of administrative work such as transport documentation, cost calculation and invoicing, but also in preparing CO2 reports.

A TMS is therefore an indispensable tool to aid with CSRD compliance (and other sustainability reporting standards, such as IFRS S1 and IFRS S2 – as well as future standards being assessed). However, as with most software systems, a TMS implementation can easily take three to six months. So to be ready by January 2025, businesses due to comply need to get started immediately.

Turning an obligation into an asset

Companies that fail to comply with the reporting obligation may face unpleasant penalties. First, non-compliance will be made public. In a market increasingly striving for sustainability, this can obviously cause severe reputational damage. After all, you don’t want to be a violator of CO2 measures. In addition, organisations also risk legally imposed fines. And while these amounts have not yet been officially established, it is estimated that they could be at least tens of thousands, if not several million euros. In addition, depending on the jurisdiction, there is the treat of imprisonment for company directors to keep compliance and legal teams on their toes.

Of course, many organisations have been working on their sustainability credentials and value proposition for some time; well presented and demonstrable, sustainability is without doubt an asset to gain a competitive advantage. Customers actively seek out companies that care about the planet. They want to get sustainable delivery options and be able to choose the solution with the smallest ecological footprint. So those businesses that have detailed information from a TMS and can offer the right options have more than one advantage over competitors that don’t. In turn, this will also improve financial figures – after all, eco-friendly delivery options are a lot more efficient and make it possible to consolidate deliveries.

Don’t be put off by the looming deadline of CSRD compliance. With the right data and insights, being able to show sustainability throughout the supply chain accurately and with transparency offers a raft of opportunities. So take advantage now to embrace compliance ahead of time and gain a strategic edge over the competition.

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