COVID-19 and eCommerce logistics
In the 1852 retelling of the fable “Solomon’s seal” a sultan asks from the king a sentence that would always be true in all times and situations. Solomon was stumped. Surely this can’t exist? In times like these we are inclined to agree.
The impact of Covid on global ecommerce logistics
We’re engulfed in a crisis. It will have consequences for your entire supply chain - among the most critical elements of which is warehousing. It’s logistical importance is why many e-commerce SMEs choose to run their own warehouse.
Yet this centralisation represents an increasingly ‘fragile’ and brittle modus operandi. An operation that is all too exposed when our best laid plans get disrupted by inevitable, yet unforeseen events. The popular and established strategies work, but only when they are not disrupted—and we live in a world where disruption is the only constant. - MIT Review. And these disruptions are fast becoming the norm. It’s only March, yet it seems we’ve already seen it all. Record floods, record storms, record bushfires, each of these have caused havoc for the logistical operations of countless e-commerce SMEs.
Now we face the 23 letters of nucleic acid that are COVID-19. It’s disruption is truly global, and looks set to have the most far-reaching, long-lasting, paradigm shifting consequences. In the face of such disruption, the limitations of overly concentrating your supply chain are clear. Single supplier businesses have been left scrambling after they were caught out by China’s lockdown. While the logistical complexity of warehousing has increased closer to home.
The impact on e-commerce logistics
Regular issues are exacerbated in times of crisis, including labour, operational efficiency, maintenance, equipment and processes. The e-commerce SMEs operating their own warehouse are experiencing this in full. But at a time when focus is demanded on numerous business-critical areas, it can feel like an overwhelming number of ‘unnecessary’ fires to put out.
First there is the human impact. In times of crisis, individuals are understandably nervous and productivity is hard to maintain. Strong leadership and empathy is necessary to maintain morale. COVID-19 is an invisible threat, employees themselves are a potential hazard.
Requiring quick implementation of new procedures for testing, isolation and potential quarantine. Mitigating strategies are necessary too, such as staggered shifts and dividing staff into multi-skilled ‘pods’. Plans for when schools are closed need to be quickly drawn up.
Second, it is difficult to maintain operational efficiency in a crisis. Especially when demand now surges enormously for some products while being completely destroyed for others. All while China’s quarantine of over 12000 facilities has exposed the costly ‘efficiency’ and short-term mindset of JIT strategies.
Maintaining some inventory keeps your operations more elastic and efficient. Rapid changes in demand are hard to respond to. Meaning warehouses now find themselves overstaffed, or in the case of Amazon and Morrisons, chronically understaffed. Or simply in the wrong place.
Maintenance, equipment and processes are also affected. What if your equipment fails while the technician is in isolation? Or the replacement parts are unavailable? And how will you isolate contractors from your workforce?
Mitigating the impact
There are ways to mitigate the impact, aside from outsourcing your warehouse. Bezos has an extensive network of professional and rigorous warehouse operators. We’ve implemented measures including: temperature checks, distancing protocols - especially on breaks, installing hand sanitisers, providing gloves, staggering shifts, banning visitors, individually assigning equipment and sanitising it regularly, and separating warehouses into independent multi-skilled ‘operation zones’.
Even with these precautions, the virus is almost certain to have an impact at some point. How will you cope if the local area is locked down? Or schools are closed and your staff stay home? Or capacity is reduced due to an infection?
Or if you must shut down your warehouse altogether Leveraging a distributed warehouse network is central to an ‘anti fragile’ e-commerce logistics operation. This was evident before the crisis, with many SMEs turning to Amazon’s FBA. Unfortunately, that strategy revealed its flaws when Amazon suspended shipment of all ’nonessential’ items to warehouses.
Borrowing their logistics network revealed an inherent conflict of interest between Amazon’s ability to make money, and your product’s ability to help them do that. Amazon is self-interested. Truly. As Jeff himself so infamously proclaimed “your margin is my opportunity.” Now, many e-commerce SMEs are left scrambling for a way to maintain their operations and customer satisfaction. Troublingly, the pandemic response could well become the new normal.
Experts suggest COVID-19 will not disappear any time soon. The possibility of a ‘second wave’ is very real. And a viable vaccine is 12-18 months away at best. So we’re approaching a protracted period of uncertainty and substantial change to normal business operations as well as our daily lives.
In addition, the crisis is only one month old, we’re already in a deep recession and demand has fallen off a cliff. For many, sales have too. The search for where to cut costs is now well underway. The crisis presents an unprecedented situation for all SMEs, perhaps even a paradigm shift. Fortunately, with every crisis comes opportunity.
As an SME you have the opportunity to prove to your customers you can reliably supply them while maintaining excellent standards of customer service, now and in the future.
You have the opportunity to capitalise on the ‘big names’ struggling to meet demand. The opportunity to analyse your operations and improve efficiency. The opportunity to use this analysis to improve resilience, and become more ‘anti fragile’. The opportunity to rethink your logistics strategy and optimise it for maximum customer satisfaction.
As an individual you have the opportunity to provide your team, your boss, and your business with logistical solutions. The opportunity to be an invaluable asset in times of crisis. In times like these, it can seem like nothing will remain the same. Yet King Solomon found the sentence that would be true in all times and situations. That sentence? This too, shall pass.
The virus will see a forced migration to e-commerce shopping. You have the opportunity, now, to position yourself for exceptional growth once it is over. Bezos is here, ready to help you achieve that. Your actions now determine how you’ll emerge on the other side. Because this too, shall pass.
If you are operating your own warehouse and need an alternative, Bezos can help. Our fulfilment as a service platform allows e-commerce sellers to better manage their logistics. We partner with a network of fulfilment centres across the UK, and are able to accommodate any need.
The benefits of using our platform:
- Access to multiple warehouses and last mile carriers across the UK: almost unlimited warehousing and fulfilment capacity at the moment.
- Multi-channel fulfilment: have your inventory in one place and fulfil all your different channel’s orders, thus minimising inventory cost and maximising utilisation
- Pay as you go model: no minimum volume, no long term contracts
- Easy onboarding: we integrate with Amazon, Ebay, Shopify and 30+ other platforms
- Easy to understand pricing: Storage, fulfilment and delivery fees. No platform fees, no integration costs, no hidden costs.
Learn more about how Bezos can help you, please contact us to get a quote.