Industry
Freight Forwarding Considerations for E-commerce
E-commerce runs two opposing flows. Goods arrive in bulk on pallets and leave one order at a time, and freight forwarding is almost entirely about the first.
Two flows, one business
An online retailer moves goods twice. Stock arrives at a fulfilment site in bulk, on pallets or in containers, in whatever quantities the buying team ordered. It then leaves in individual parcels, one order at a time, to addresses that were unknown when the stock was bought.
These are different industries in practice. The inbound side is freight forwarding: full loads, part loads, pallets, ocean and road movements, customs formalities where a border is crossed. The outbound side is parcel distribution, with its own networks, its own economics and its own failure modes.
Confusing the two is the most common planning error in the sector. A business that has grown up thinking about parcel rates often has no view at all of its inbound freight, which is where a surprisingly large share of its landed cost sits, and where a delay has consequences that no parcel carrier can fix.
Getting goods into a fulfilment site is a compliance exercise
Fulfilment operations, whether operated by the retailer or by a third party, receive at scale and therefore receive to rules. Deliveries are booked into a slot, arriving without one may mean being turned away, and the receiving requirements typically extend to labelling, pallet configuration, carton identification and how the delivery is documented.
Those requirements exist because the receiving process is automated or semi-automated, and a non-conforming delivery cannot simply be dealt with by someone being helpful. It is rejected, or it is accepted and charged for as an exception, and both outcomes cost more than getting it right would have.
The requirements are set by the operator of the site and vary between them. The practical rule is to obtain the current receiving specification for the specific site before the goods are packed at origin, because most of what it asks for has to be done at the point of packing rather than corrected afterwards.
Peaks, forecasts and being wrong in either direction
Online retail demand is concentrated into peaks, and the peaks are known in advance while their size is not. Freight capacity into fulfilment sites tightens at exactly the same moment, because every competitor is trying to do the same thing on the same dates.
Being wrong in either direction is expensive. Stock arriving late for a peak misses the trading period it was bought for, and its value falls immediately afterwards. Stock arriving too early occupies storage that costs money and is charged by the space and the time it uses.
The freight implication is that peak inbound movements should be planned earlier and with more tolerance than the rest of the year, and that a plan built on the assumption that capacity will be found at short notice is a plan that has not accounted for everyone else's identical plan.
Returns run the other way and behave differently
Online retail generates returns at a rate that surprises businesses arriving from other channels, and returned goods are not simply the outbound flow reversed.
They arrive unpredictably, in mixed condition, in packaging that has already been opened, and often from many origins to a single point. Each item has to be inspected, graded and then either returned to stock, repaired, sold through another channel or disposed of, and until that happens its value is uncertain.
Where returns cross a border, the arrangements are more involved than the original export was, and the applicable procedures vary by jurisdiction, by commodity and by the circumstances of the return. They must be confirmed with the relevant authority or a licensed customs broker before goods are sent back rather than after they have arrived.
Common requirements
What shipments in this sector usually need.
- A booked delivery slot at the receiving site, obtained before the goods leave origin.
- Labelling, carton marking and pallet configuration matching the receiving site's current specification.
- Pallets built to the height, overhang and stability limits the site accepts, since rebuilding on arrival is charged.
- Advance shipping information supplied in the format the receiving operation expects.
- A defined process for returned goods, including where they go and who inspects them.
Quoting
What to describe in a request.
- Describe the inbound movement in freight terms: piece count, pallet count, weights and dimensions as they will be presented.
- Name the receiving site and confirm whether it requires booked slots and a specific labelling standard.
- State whether the shipment is peak stock tied to a trading date or routine replenishment, because the tolerance differs.
- Say whether the goods are already palletised or will need consolidating before they can be received.
- Flag any goods with battery content, aerosols or other restrictions, which are common in general merchandise ranges.
- For cross-border returns, establish the applicable procedure before goods are shipped back.
From cargo to requirement
Describe what the goods demand of the movement.
Handling, dimensions, timing and site constraints are more useful than an industry label on its own.
European road freight