Ecommerce and a need for flexibility reshaping fulfilment
Ecommerce is fundamentally transforming the landscape of logistics and fulfilment, as companies adapt to new market demands and regulatory challenges. According to Sam Coiro, head of global business development ecommerce at Maersk, there is a significant shift from traditional cross-border ecommerce models to more flexible, regional fulfilment strategies.
The Shift from Direct-to-Consumer to Local Fulfilment
Historically, the direct-to-consumer model involved international sellers shipping individual parcels directly to consumers, often from countries like China to the United States. However, this model is evolving. Coiro describes a new approach termed the “local-to-local” model, which is gaining traction among ecommerce businesses. This model allows sellers to import large quantities of goods into local warehouses in the US, rather than shipping individual items.
By consolidating shipments, sellers can clear customs more efficiently and avoid the high costs associated with tariffs and duties on each parcel. This strategy not only improves cash flow but also mitigates risks associated with penalties and compliance issues. For instance, using free-trade zones allows companies to store inventory without incurring duties until the products are sold.
Market Growth and Regulatory Changes
The global ecommerce logistics market is witnessing substantial growth. According to Transport Intelligence (Ti), the European market is expected to grow from €336.7 billion in 2022 to €486 billion by 2025. Additionally, cross-border ecommerce flows are projected to increase by 52%, reaching €96.1 billion.
In the United States, recent changes to the de minimis threshold have added complexity to low-value imports, particularly affecting high-volume parcel flows from Asia. The removal of the $800 threshold last August has led to increased duties and compliance costs, creating friction in customs processes. Similar regulatory reforms are anticipated in the European Union by mid-2026, which could further complicate cross-border ecommerce.
Impact on Fulfilment Dynamics
The shift towards regional fulfilment is changing the dynamics of peak seasons in ecommerce. Coiro notes that when inventory is concentrated in a single facility, peak seasons like Black Friday can overwhelm operations, leading to a tenfold increase in labor requirements. However, with inventory distributed across multiple facilities, companies can better manage these surges in demand.
While predictable events such as Black Friday still generate spikes in orders, the operational impact is less severe. Companies can prepare for these events, balancing the labor force more effectively across various locations. Additionally, the unpredictability of social media-driven demand presents new challenges. A sudden surge in orders, triggered by an influencer’s post, requires flexibility and rapid response capabilities.
Changing Carrier Relationships
The evolving landscape of ecommerce is also influencing relationships between shippers and carriers. Coiro emphasizes that while large integrators are often associated with rigid volume commitments, regional carriers are becoming more flexible. Some carriers are willing to waive strict daily minimums but introduce exit clauses that allow them to terminate contracts if volumes do not meet expectations.
This flexibility is crucial for logistics providers operating multi-carrier networks. By aggregating volumes, these providers can negotiate better rates and offer more adaptable solutions to their customers, shielding them from short-term market fluctuations.
Future Outlook for Ecommerce Logistics
Looking ahead, Ti forecasts steady growth in both domestic and cross-border ecommerce logistics in Europe through 2030. However, as regulatory pressures increase in the US and Europe, compliance costs may either suppress low-value cross-border trade or accelerate the shift towards regional inventory positioning.
As shippers and carriers work to build networks that can handle predictable demand spikes and unexpected surges, the traditional peaks in ecommerce logistics may become smoother. This could lead to a greater emphasis on bulk shipping via ocean freight rather than air freight, particularly as companies seek to optimize costs and efficiency.
Frequently Asked Questions
The “local-to-local” model refers to a strategy where sellers import large quantities of goods into local warehouses instead of shipping individual items directly to consumers. This approach helps reduce costs and streamline customs processes.
Recent regulatory changes, such as the removal of the $800 de minimis threshold in the US, have increased duties and compliance costs for low-value imports. Similar reforms are expected in the EU, potentially complicating cross-border ecommerce.
Regional fulfilment allows companies to distribute inventory across multiple facilities, which helps manage labor requirements during peak seasons. This reduces the operational shock associated with sudden spikes in demand.
Note: The ecommerce landscape is continually evolving, and companies must remain adaptable to meet changing consumer demands and regulatory challenges.
