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Cost-effective logistics strategies for businesses generating more online sales

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Cost-effective logistics strategies for businesses generating more online sales. Image: Pixabay
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The Covid-19 crisis has triggered an increase in online sales. With more and more businesses all over the world offering a home delivery service, it pays to focus on cost-effective logistics strategies. While boosting orders and adapting to a new way of selling is beneficial for businesses aiming to pull through the crisis, it’s critical to ensure added shipping costs are accounted for. Here are some steps to balance the books. 

Plan in advance

The vast majority of businesses were caught off-guard by the outbreak of Covid-19 at the beginning of 2020. Now that we have a better understanding of what it means for global trade and consumer buying habits, companies can adjust and adapt and start to make plans in advance. One of the most important considerations when offering online shopping is crunching the numbers related to logistics. Will you be paying for warehousing and distribution? How many packages are you expecting to send or ship per day? Are you dealing with customers locally, nationally or internationally? Where possible, it pays to plan ahead. If you’re expecting a surge in orders, make sure you have the arrangements in place to deal with an influx and ensure you’re operating cost-effectively. Explore different options, get quotes and make sure you’re ready to offer new services. You don’t want to lose customers the first time they place an order because you can’t deliver on promises. 

Exploring funding streams and efficiency savings

There is no doubt that the Coronavirus crisis has wreaked havoc on organizations and companies across almost every sector. With the future uncertain, it’s beneficial for business owners to explore funding streams, to keep a close eye on the books and to look into efficiency savings. Altering staffing structures, adapting to embrace and capitalize on new buying trends and automating processes can save time and money. When it comes to funding plans for growing your business and catering to an online market, businesses can consider personal investment through options like buying and selling stocks, trading share CFDs or selling real estate, external investment or borrowing. Weigh up the options open to you, compare the pros and cons and make sure you understand the risks or implications of borrowing, putting your money into an investment opportunity or giving away part of the business in return for a cash boost.

Saving on shipping

Many businesses that usually rely on in-store sales are exploring new opportunities. If you start accepting online orders, it’s hugely beneficial to look for ways to save on shipping. Consider different options, for example, free standard delivery or express services for a fee, and figure out how the costs add up and what works best for your business. Try to ensure that orders are packaged together to prevent delivering a series of separate items. You can outline order deadlines or time limits to ensure that customers have an accurate idea of when their goods will arrive, for example, offering next-day delivery on orders placed before 3 pm. It’s also essential to build strong relationships with the agents or companies you use to ship your products and to make sure you’re getting the best deal. Your performance and reputation could be affected by the delivery process. 

Online sales have soared in recent months, and many consumers are happier to place orders online than leaving the house. If you’re on a mission to balance the books, it’s crucial to employ cost-effective logistics strategies.  

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Freight Forwarding

Uber Freight to acquire Transplace

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Uber Freight to acquire Transplace. Image: Pixabay
Uber Freight to acquire Transplace. Image: Pixabay
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Uber Freight and Transplace have entered into a definitive agreement for Uber Freight to acquire Transplace for approximately $2.25 billion, consisting of up to $750 million in common stock of Uber Freight’s parent company, Uber Technologies, Inc. and the remainder in cash. Uber Freight will acquire Transplace from TPG Capital, the private equity platform of alternative asset firm TPG.

Uber Freight’s acquisition of Transplace will create one of the leading logistics technology platforms, with one of the largest and most comprehensive managed transportation and logistics networks in the world. The transaction is subject to regulatory approval and other customary closing conditions.

The acquisition comes at a time of accelerated transformation in logistics. The demands of a volatile market and the increasing complexity of globalized logistics are clashing with industrial-age transportation technology. In the midst of capacity constraints and escalating transportation costs, shippers are adapting their operations at an increasing pace and looking for technology, support, and solutions that can modernize their supply chain and keep critical goods, and the economy, moving.

“This is a significant step forward, not just for Uber Freight but for the entire logistics ecosystem,” said Lior Ron, Head of Uber Freight. “This is an opportunity to bring together complementary best-in-class technology solutions and operational excellence from two premier companies to create an industry-first shipper-to-carrier platform that will transform shippers’ entire supply chains, delivering operational resilience and reducing costs at a time when it matters most.”

“The acquisition will combine the world’s premier shipper network platform with one of the industry’s most innovative supply platforms, to the benefit of all stakeholders,” said Frank McGuigan, CEO of Transplace. “Our expectation is that shippers will see greater efficiency and transparency and carriers will benefit from the scale to drive improved operating ratios. All in all, we expect to significantly reduce shipper and carrier empty miles to the benefit of highway and road infrastructures and the environment. Finally, we want to thank TPG for their partnership as we have worked together to position Transplace as a leader in supply chain innovation.”

Transplace was acquired by TPG Capital in 2017. Over the course of the partnership, Transplace has invested heavily in technology and other growth initiatives to further bolster the company’s expansive, high-quality, customizable solutions for managing today’s supply chain. Digitization of the global supply chain and the rapid adoption of logistics technology and solutions continue to drive investment activity across TPG’s platforms.

“Our partnership with Transplace is a strong example of TPG Capital’s strategy to identify industry-leading tech-enabled services companies and invest behind them to drive sustained growth,” said Jack Daly, Partner at TPG Capital and Chairman of Transplace, and Alex Minasian, Principal at TPG Capital. “In a category that continues to benefit from several secular tailwinds, Frank and his experienced team have positioned the company as an innovative leader that is empowering customers of all sizes to improve and optimize their supply chains. We thank the entire Transplace team for their partnership and wish them continued success in their next chapter.”

A logistics platform built for both shippers and carriers

The combination of Uber Freight and Transplace will optimize the movement of freight across the entire marketplace and deliver best-in-class services to shippers, while also unlocking opportunities for carriers. Uber Freight’s vast network of digitally-enabled carriers, combined with Transplace’s trusted shipper technology and operational solutions, will result in a fully scaled logistics platform built to meet both shippers and carriers where they are, no matter the size of their business or their transportation needs.

The combination of trusted services and technology solutions available via Uber Freight will help reduce friction across the supply chain and enable a new era of logistics management:

Shippers will have access to an even more robust set of technology solutions across all transportation modes and services, bolstered by support services based on Uber’s advanced technology and data science expertise.
Carriers will have the ability to collaborate directly with shippers within a seamless marketplace as well as access high quality freight across multiple expanded service lines, including intermodal, cross border and Less-Than-Truckload.

Uber Freight’s brokerage will continue to operate independently from Transplace’s managed transportation services to ensure the highest-quality service for shippers.

Accelerating Uber Freight’s path to profitability

Completion of this transaction will enable Uber Freight to serve substantially more customers at all levels of the freight industry and will expand its presence into Mexico and through new capabilities in intermodal and customs brokerage.

This transaction is expected to accelerate Uber Freight’s path to profitability and help the segment to break even on an Adjusted EBITDA basis by the end of 2022.

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Freight Forwarding

Dronamics and DHL enter partnership for middle-mile drone delivery 

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Dronamics and DHL enter partnership for middle-mile drone delivery. Image: Dronamics
Dronamics and DHL enter partnership for middle-mile drone delivery. Image: Dronamics
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DRONAMICS has signed a partnership agreement with the world’s number one logistics company – DHL Deutsche Post.

With the signed partnership, DHL and DRONAMICS agree to jointly develop solutions and offer same-day cargo drone deliveries to customers using DRONAMICS’ drone delivery network and Black Swan drones. Both companies are discussing mutual exclusivity for middle-mile drone deliveries in selected industries and markets. In addition, DRONAMICS’ goal to become carbon-negative by 2027 and direction to operate on sustainable biofuels in the future will play a part in helping DHL achieve its goal of becoming carbon neutral by 2050.

“Innovation is a key part of DHL’s DNA. We are constantly exploring new technologies to bring value to our customers, and we believe that cargo drones will be an element in the next generation of transportation in logistics. DRONAMICS is a pioneer and leader in the field of cargo drones and our collaboration will help to open up opportunities for urgent, sensitive and time-critical deliveries. We are excited to pilot the use of the Black Swan in customer operations in the near future”

Matthias Heutger, Senior Vice President, Global Head of Innovation & Commercial Development at DHL

“We are incredibly excited that DRONAMICS has been selected by DHL, the world’s largest logistics provider as their first middle-mile drone partner, with a partnership that provides mutual exclusivity in selected industries and markets. This partnership has the potential to generate €1.86 Bn to DRONAMICS’ revenues annually, with plans underway to build and operate over 4,000 cargo drones to support the partnership in the coming years” Svilen Rangelov, Co-Founder and CEO of DRONAMICS

The partnership aims to combine middle-mile cargo drones with DHL’s first and last-mile services. As part of the agreement, DRONAMICS will provide equipment and expertise to operate the unmanned drone flights, employing staff in handling and technical roles. The first commercial flights of the same-day drone cargo services are expected to begin in 2022.

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Freight Forwarding

Aramex and DB Schenker sign a Strategic MoU to expand in Abu Dhabi

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Aramex and DB Schenker sign a Strategic MoU to expand in Abu Dhabi. Image: DB Schenker
Aramex and DB Schenker sign a Strategic MoU to expand in Abu Dhabi. Image: DB Schenker
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Aramex a leading global provider of comprehensive logistics and transportation solutions, and Germany-based DB Schenker, a global leader in supply chain management and logistics solutions,  announced the signing of a strategic Memorandum of Understanding (MoU) with the aim to drive forward synergistic opportunities in supply chain solutions across multiple critical industries to and from Abu Dhabi and the wider MEA region.

By leveraging DB Schenker’s extensive global experience in specialized freight forwarding solutions across multiple industries, the partnership will seek to further boost Aramex’s capabilities and offerings in the region, including, but not limited to, the aerospace, defense, infrastructure, and healthcare industries. Conversely, by teaming up with Aramex and capitalizing on its strong brand identity, leadership position, deep knowledge and expertise in the region, DB Schenker will be able to expand its presence more comprehensively in Abu Dhabi, a strategic and growing trade and logistics hub in the MEA region.

Commenting on the MoU, Othman Aljeda, Chief Executive Officer of Aramex, said: “This is a very exciting strategic partnership that has the potential to unlock more value for existing customers while also enabling us to realize our commercial and diversification goals. Over the several years, we have been strategically focused on enhancing our core freight forwarding business through investment in technologies and expanding on the ground operations with the intention of enhancing our capabilities, capturing greater market share in core markets and diversifying our customer base by penetrating new industry verticals. By joining forces with DB Schenker, a global logistics company we regard as truly complementary to ours in the region, we will accelerate the realization of our goals in the freight forwarding business. Our alliance will enable Aramex to become a stronger, more competitive player in the sea and air freight forwarding services in Abu Dhabi and other core markets. While we are working on the partnership agreement and will update the market in due course on our final agreement, on behalf of the Aramex team, I look forward to working alongside the DB Schenker team.”

Christopher Smith, Chief Executive Officer of DB Schenker, Middle East & Africa, said: “At DB Schenker, we recognize the immense opportunities emanating from Abu Dhabi and the MEA region. We believe our alliance with Aramex was a natural choice given their history, expertise, knowledge, and extensive network in the region. I am confident that together, we will be able to grow our footprint in Abu Dhabi and the wider MEA region. We are excited about this expansion plan, and we look forward to realizing synergies and scaling our operations in the region to serve our existing major accounts and new potential clients more comprehensively.”

Traditionally Aramex’s freight forwarding business was largely focused on the cyclical Oil & Gas (O&G) sector. While the company will continue to serve this important sector, the energy industry has witnessed lower levels of activities in recent years, which inevitably had a knock-on effect on Aramex’s freight forwarding business. However, in 2020 the healthcare, pharmaceuticals and FMCG segment helped offset some of the weakness from O&G. Going forward, the company will continue to strengthen its freight forwarding capabilities through strategic partnerships, investment in technologies and hiring and upskilling the necessary talent.

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