Ecommerce is big business, and unless you’re selling software or digital goods, you’ll eventually need to interact with customers in the real world. When someone places an order on your website, you’ll have to send the product to their home.
Good ecommerce transit is essential to a successful ecommerce business because it ensures your products reach your customers safely and on time.
What is Ecommerce Transit?
Ecommerce transit refers to how ecommerce companies ultimately get their products to customers. Just like you think about the best way to get to your destination when you go on vacation, your business should think about the best ways to get orders to your customers.
The method of transit you select impacts the shipping speed, how much shipping costs, and how customers perceive your company.
Why Transit is Important in Ecommerce
Ecommerce transit is important for a few reasons.
One is that the speed of your transit choice plays a huge role in customer satisfaction, the kinds of customers you attract, and how they perceive your company. For example, Amazon has made a name for itself with its Prime one- and two-day shipping services. Customers who need something delivered to their door quickly know that Amazon will get the job done.
If you’re going for similarly time-sensitive consumers, you’ll need a fast delivery option. Rapid transit can also help your business feel more premium. On the other hand, customers may be more willing to accept slow transit times for discount prices or less urgent products.
Transit options also play a massive role in shipping costs. For example, sending products by air is far more expensive than using ground-based shipping or putting something on a container ship.
Ecommerce Transit Options
There are four main types of ecommerce transit—ground, rail, marine, and air.
Ground or road-based transit refers to shipping products using ground-based methods such as trucks, the postal service, or companies like FedEx and DHL.
A significant benefit of this option is cost—you can ship something by truck for a relatively low price. The variety of shipping companies and competition also help to keep prices low. This option also offers high traceability because it’s easy to track where your products are in real time.
Finally, ground transportation doesn’t place many restrictions on what you can ship. Other options, like air transit, may refuse to ship certain volatile materials or products.
The drawback of using ground transit is that trucks have a limited capacity and can be delayed by weather, traffic, or even accidents.
Trains are another ground-based transit option that offers some advantages over road-based shippers, as well as unique drawbacks.
Compared to trucks, trains can move far more products at one time. They also tend to be more reliable because they aren’t prone to traffic jams and accidents and see fewer impacts from severe weather.
Trains are also greener than trucks, which can benefit companies that value sustainability and want to be ecologically friendly.
The drawback of trains is that rail infrastructure in the US is much weaker than road infrastructure. You can use rail to serve major cities, but it might only reach some rural areas. You also can’t provide door-to-door service or last-mile delivery via trains as you could with a truck or van.
The large capacity of trains also means they’re not ideal for smaller loads or shorter distances.
Marine transit refers to large container boats moving products from one port to another.
Shipping products long distances by boat is one of the cheapest ways to move products, especially international shipping overseas. Ships also have an immense capacity and are least susceptible to accidents and loss.
However, boats are slow—it can take weeks or months to ship something by boat compared to just days over the air. They also only work when there is a water route between your origin and destination.
Air transit is the fastest but most expensive option for shipping ecommerce products. If you want quick delivery times and a great customer experience, it’s hard to beat air-based delivery services.
However, air transit costs up to five times more than road transit. There are also more restrictions on what you can ship. Heavy items or hazardous goods like lithium batteries may be banned or subject to heavy regulation that can add costs and delays.
Trends and Challenges in Ecommerce Transit
Choosing the right e-commerce transportation option for your online business can take time and effort. Shipping options are constantly changing, so keeping up with current trends and challenges is essential.
Since the COVID-19 pandemic, ecommerce order volumes have reached record highs, putting a significant strain on ecommerce delivery solutions. Some of the top challenges ecommerce businesses faced in 2022 were delivery expectations and transportation capacity.
Most responded with strategies like negotiating shipping rates or changing fulfillment companies, but others have tried to use technology and integrations to optimize their shipping solutions. For example, software that can automate rate shopping to find the best prices have grown popular among ecommerce businesses.
Another major challenge is labor. According to a survey by Saddle Creek Logistics Services, 59% of respondents said their labor costs within the supply chain had increased over the past year. These labor shortages have resulted in slower order processing times, delivery delays, and frequent customer service failures.
Warehouse space is also a growing concern. Vacancies for industrial space hit record lows in 2021, and there is increasing demand for warehouse space. The lack of adequate warehouses can make it challenging to locate products near customers and increase shipping times.
Many ecommerce companies are responding to these challenges by outsourcing their fulfillment. According to the survey, 57% of respondents say they already use third-party fulfillment companies, and another 20% plan to outsource fulfillment within the next year and a half.
Another trend highlights the rise of free shipping rather than fast shipping times. For example, 43% of companies responding to the survey offer free shipping on all orders, which likely helps to reduce customer dissatisfaction caused by slow shipping times. By contrast, only 25% offer one- and two-day shipping.
The Final Word
For ecommerce companies, having a great product and an easy-to-use website is just one piece of the puzzle. You need to be able to get your products into the hands of your customers once they make a purchase.
Choosing the right transit option is essential to protecting your brand’s reputation and creating a great customer experience. Consider the pros and cons of each and choose the one that best fits your small business needs.