Going the E‑Commerce "Extra Mile"--E‑Commerce Logistics Costs Hit $117.2 Billion in 2017

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Apr 26, 2018, 11:15 ET

MILWAUKEE, April 26, 2018 /PRNewswire/ -- A report published Thursday by Armstrong & Associates, Inc. (A&A) estimates that e‑commerce logistics costs in the U.S. hit $117.2 billion—representing 6.9% of total U.S. logistics costs. The report, "E‑Commerce Logistics in the United States," provides a deep‑dive into e‑commerce logistics in the U.S., with a focus on domestic and international transportation, warehousing and fulfillment, last‑mile delivery, and reverse logistics.

E‑commerce retail is no longer a novelty—it's the new normal. The industry has shown significant and sustained growth. In the last five years, we've seen a compound annual growth rate close to 15%, and the industry shows no sign of slowing down.

We can't overemphasize the role logistics plays in e‑commerce retail. Providing two‑day delivery for a seemingly endless assortment of products is no small feat. E‑commerce as we know it would not be possible in the United States without our vast, efficient logistics infrastructure. Logistics networks are quickly growing and changing to meet the ever‑higher bar set by e‑commerce retailers.

The E-Commerce "Extra Mile"

We frequently talk about the "last mile" in logistics, the short but costly final leg of a product's journey. E‑commerce retail has taken this concept a step further. The shift from brick‑and‑mortar to e‑commerce retail has resulted in a such a significant addition to the typical logistics journey for retail products that we think of this as e-commerce's "extra mile."

The well-traveled path from distribution center to store location is being replaced by a much more complex series of moves: from distribution centers to fulfillment centers to parcel hubs and sortation centers to last-mile delivery providers for residential delivery. As logistically complex product categories such as groceries and furniture make the shift to e‑commerce, the "extra mile" is only becoming more cumbersome and costly.

E‑commerce's "extra mile" was previously traveled by someone else—the customer. E‑commerce retail has assumed an entire logistics step that had previously only existed on a very small scale. Logistics networks have undergone dramatic changes to accommodate e‑commerce, but the transformation is far from complete. We estimate U.S. e‑commerce logistics costs will grow at a rate of 18.8% through 2020.

About the Report

"E‑Commerce Logistics in the United States" is for logistics providers, retailers, investors, and researchers who wish to understand the massive shift in logistics networks supporting e‑commerce retail. Readers will gain an in‑depth knowledge of e-commerce retail's impact on domestic and international transportation, warehousing, last‑mile delivery, and reverse logistics; key logistics cost drivers; major challenges and innovative solutions; and services and technologies provided by leading third-party logistics providers.

Topics include:

E‑Commerce Logistics Costs and 3PL Revenues for 2017–2020E
E‑Commerce Networks, Transportation Logistics, and Domestic Transportation Management
The Last Mile
E‑Commerce Warehousing and Value‑Added Services
Cross‑Border E‑Commerce Logistics and International Transportation Management
E‑Commerce Reverse Logistics

Logistics providers, retailers, and technology providers are rapidly innovating to create tomorrow's e‑commerce landscape. Ten "Focus On" sections provide case studies or analyses of emerging topics, including:

Amazon Logistics (including our estimates for Amazon's total inbound, outbound, and fulfillment costs)
Same‑Day Grocery Delivery
Value‑Added Warehousing and Distribution Services for Beauty Products and High‑End Apparel
Shifting International Logistics Networks and the Global Impact of E‑Commerce on Fast Fashion
Seasonality Trends in Cross-Border E‑Commerce Logistics

"E‑Commerce Logistics in the United States" is available for purchase from Armstrong & Associates (http://www.3plogistics.com/product/e-commerce-logistics-united-states/) or complimentary for A&A Expert Information Service subscribers (http://www.3plogistics.com/product/premium-market-research-analysis-expert-information-service/).

ABOUT ARMSTRONG & ASSOCIATES, INC.

Armstrong & Associates, Inc. (A&A) was established in 1980 to meet the needs of a newly deregulated domestic transportation market. Since then, through its leading third-party logistics (3PL) market research and history of helping companies outsource logistics functions, A&A has become an internationally recognized key information resource for 3PL market research and consulting.

A&A's mission is to have leading proprietary supply chain knowledge and market research not available anywhere else. As proof of its continued work in supporting its mission, A&A's 3PL market estimates are the most often cited in securities filings by publicly traded 3PLs, media articles and trade publications. In addition, A&A's email newsletter currently has over 59,000 subscribers globally.

A&A's research complements its consulting activities by providing a continually updated detailed database for analysis. Based upon its unsurpassed knowledge of the 3PL market and the operations of leading 3PLs, A&A has provided strategic planning consulting services to over 30 3PLs, supported 17 closed investment transactions, and provided advice to numerous companies looking to benchmark existing 3PL operations or outsource logistics functions.

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Milwaukee, WI 53227 USA
Phone: +1-414-545-3838 Fax: +1-414-545-3906
Website: www.3PLogistics.com

SOURCE Armstrong & Associates, Inc.