Package to the People

We’ve lost sight of the true purpose of logistics. In 1846, Swiss Military officer Antoine-Henri Jomini first defined logistics as “...the art of well-ordering the functionings of an army, of well combining the order of troops in columns, the times of their departure, their itinerary, the means of communication necessary to assure their arrival at a named point…”

Fast-forward to today, logistics carries more modern definitions, and across all industries is most commonly used to get a package – the most common denominator (unit) of the logistics ecosystem – to a person. This we all know.

The common thread between today and Jomini’s 1846 definitions is the human element: that logistics has always been a function that supports "people systems" rather than "machine systems." The problem is that the logistics industry, in its current evolved state, is largely unable to accomplish this simple purpose of focusing on people to get them what they need, when they need it. For example, inventory visibility is an issue that plagues almost every person (customers, execs, and staff) involved in the logistics mile.?

Here I’m covering the problems that this current state has caused, how consumer and global trends are pushing our logistics industry to improve more than ever, the reason we got here in the first place (think siloed tech), and our lifeboat out (I think Jomini would like this military reference).

Fundamentals First

Before we get started, there are a few concepts to clear up. The first is supply chain vs. logistics. We hear these terms interchangeably. Supply chain management is an overarching concept that links together multiple processes to achieve a competitive advantage, while logistics refers to the movement, storage, and flow of goods, services, and information within the overall supply chain.

The Council of Supply Chain Management Professionals defines logistics as "part of the supply chain process that plans, implements, and controls the efficient, effective forward and reverses flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet customer's requirements."

In contemporary terms, logistics is broken down into first yard, first mile, middle mile, last mile, last yard, and reverse logistics, which includes inbound and outbound logistics.

Inbound logistics is one of the primary processes of logistics concentrating on purchasing and arranging the inbound movement of materials, parts, or finished products from suppliers to manufacturing or assembly plants, warehouses, or retail stores.

Outbound logistics is the process related to the storage and movement of the final product. The related information flows from the end of the production line to the end user.

The inbound and outbound logistics processes are run multiple times to move a package across its journey from the origin to the final recipient. Alright, basics are out of the way, let’s get started.

State of Logistics

After 亚马逊 , the pandemic massively altered our behaviors and expectations. We all witnessed and are part of it. The shift to digital and online shopping added billions of packages to the rail, creating a major ripple for B2B2C inbound and outbound logistics to deliver logistics efficiency and meet customer expectations.

The following four themes are of utmost importance:

• Global Logistics Market: It’s a $12T largely fragmented manual logistics market growing at 5% YoY driving 159B packages across the globe, growing at 21% YoY that will get past 205B packages by 2024.
• Expectations: Whether retail or commercial logistics, consumers and businesses need speed, visibility, and convenience that cut across B2B, B2C, and D2C. These expectations drive customer retention, loyalty, delight, and net new acquisitions, collectively making up the customer experience. eCommerce and retail, though, stay the primary drivers, with the eCommerce share of retail sales to cross 30% by 2026, up from 21% today.?
• Logistics Tech: Logistics backend is full of siloed solutions and monolith systems that don’t talk to each other seamlessly. On the front lines, 50% of the largest US enterprises still rely on pen & paper, spreadsheets, and emails, which leads to 40% inaccurate data getting into systems after hours of delay.
• Unboxing Logistics: Logistics isn’t only about retail; it also isn’t about just shipping or tracking. It’s much broader, and logistics tech is a foundational requirement wherever packages go: from manufacturer to distributor, to warehouse, to store, to delivery carrier, and ultimately to the final building and customer.

Every logistics entity has customers, and they have expectations, and each logistics entity needs to manage these expectations by improving logistics efficiency and driving profitability for their business, feeding into the overall supply chain efficiency and resilience.

The influx of new packages and customer expectations is hence forcing every business to rethink logistics efficiency and customer experience.

A deeper understanding of these themes and how they influence each other is still a big gap for many businesses. It continues to impact their top-line growth and bottom-line profitability.

After servicing 100+ B2B customers on the PackageX Logistics Cloud and processing millions of API calls last year, our core thesis keeps on gaining strength:

The logistics that occurs in our physical world is triggered and managed by a digital tech stack. It is about people’s systems and experiences, whether workforce or customer. It was expected to be digitized and connected by now, but that’s not the case. Logistics is largely made up of a bunch of point solutions which typically lack modern systems of engagement: meaning anywhere from handheld devices (such as apps used by the workforce to ingest data), to receiving inventory, processing fulfillments, or to checking out a BOPIS order.?

Also, the point solutions don’t talk to each other, so even if a really slick app digitizes data, there’s no source of truth for key data points like inventory location and stock levels, which are required to activate modern logistics models like omnichannel fulfillment.

Let’s dig deeper into how this problem manifests across two key logistics verticals: retail and commercial.

Retail Logistics

亚马逊 nailed the art of logistics efficiency and set new standards to meet customer expectations. They realized early on that to win and retain customers, they must focus on the logistics tech stack. They acquired Kiva Systems in 2012 for warehouse robotics but built tech over the past decade to support every part of logistics operations, from warehouse to fleet and to the extent of the courier on foot.

Shopify followed Amazon’s approach by acquiring 6 River Systems in 2019, only to recognize very recently that they needed more to meet customer expectations and adapt to the changing realities of new fulfillment models. It led to their acquisition of Deliverr in 2022.

Not everyone in the retail logistics chain is 亚马逊 . But every brand wants to deliver an Amazon-like approach to fulfillment to own and protect their brand, retain and delight their customers, and maximize topline and bottom-line growth.?

Yet many retailers only support a single shipping carrier at their checkout today. They do not have real-time inventory positioning, so they cannot even show delivery estimates. On the pre-sales side, retailers have made advancements like dynamic product pricing, while very few think about dynamic shipping carrier selection and pricing engines on the logistics side of the house. Deploying ship-from-store, standing up micro-fulfillment centers, and building new and better experiences for BOPIS or curbside are still in their infancy. Barcode scanners and dedicated hardware devices are still considered a major logistics innovation, but they're error-prone and limited, when all the while, everyone has a smartphone in their pockets. An app can perform multiple workflows for any logistics person on the go, taking pictures and recording damages.?

Because of these blockers, many retailers and merchants end up going to third-party marketplaces and lose control, which is obviously not the path to building a brand. This current state of logistics operations in retail showcases that the focus for most retailers has been on driving front-end commerce vs. the art of fulfillment to their customers. Good news is that the path to growth and profitability for retailers is absolutely possible through simplifying, digitizing, and connecting the logistics tech stack. They cannot win or retain customers if they continue to run with a mix of siloed and legacy systems.

Commercial Logistics

Commercial logistics is another massively underserved and legacy area. We define it as the movement of goods across suppliers, manufacturers, distributors, warehouses, and final yard buildings and campuses. A lot of inbound logistics is commercial logistics, which also includes the final yard delivery at buildings and campuses. In many instances, it includes and interfaces directly or indirectly with retail logistics in many ways.?

It may not be as obvious, but commercial logistics is people focused too – they also have customers and suppliers.?

• A large electronics equipment manufacturer has hundreds of employees and customers. They get parts from suppliers, assemble products, move them to distributors, and get items back for repairs. This coordination requires efficient logistics tech to deliver visibility, speed, and convenience.
• A large corporate campus or co-working space has hundreds of employees and tenants as its customers. They have needs all the way from inventory management, package receiving, shipping, tracking, and asset management.
• A residential real estate building has hundreds of tenants as its customers, and these buildings receive, store, and deliver thousands of packages every month.?

The logistics inefficiency plaguing commercial businesses is equally eating into their bottom-line profitability. They struggle to acquire new customers and retain existing ones in their B2B or B2C ecosystem.?

In many instances, when a package is ‘missing’ or ‘lost,’ the retailer takes the hit and sends out another item eating into their profitability.

Commercial and retail logistics will overlap in many new ways when existing commercial real estate is converted into mixed-use buildings, and new developments are mixed-use, to begin with. For example, we already see early signals within our customer base, opening all-in-one co-working and co-warehousing for eCommerce merchants. This will create another massive opportunity to store inventory and service the last mile and last yard at shorter distances.

Logistics Conundrum

Retail and commercial logistics challenges and needs are consistent since they were both derived from fundamental logistics operations. When any business gets in front of their customers and prospects, it’s always about the best possible customer experience, logistics efficiency, and profitability. A lot about the logistics space was stagnant and misunderstood, but the recent tailwinds are already starting to shake the entire ecosystem.

Many point solution providers like Shippo , Narvar , and Bringg , who started their businesses about a decade ago, focused on one or two problems that are highly important to solve for, but logistics was never a point operation. This disjointed approach led us to all the challenges logistics face today when multiple systems are required to complete one package-level transaction. To relieve the disjointed nature of logistics, visibility companies like project44 and FourKites, Inc. layer on top of existing disjointed stacks to create a makeshift system of record for key data points.

Another group of well-known legacy platforms also contributes to the challenges logistics faces today. They were first to market decades ago to offer a suite of logistics mile solutions: think barcode scanners, clunky web apps, and excel.

There’s a better way. The answer to growth and profitability for many businesses sits within logistics, and in the end, logistics at its core comprises a handful of operations executed in similar and diverse ways, but the core of logistics operations remains the same.

Our Unique Approach

PackageX recognized that legacy systems, pen-and-paper inefficiencies, siloed data sources, and fast-changing customer expectations required a new approach and a holistic solution.?

We took the challenge of fixing this largely manual and fragmented logistics ecosystem by focusing on enterprises from the first yard to the last yard, and it all comes together on our Headless Logistics Cloud.

The core of our innovation sits in interconnected API infrastructure that allows businesses and enterprises to augment, simplify, or build their logistics tech stack with complete control and flexibility.?

Our Logistics Cloud infrastructure breaks logistics operations into highly flexible a-la-carte services that enterprises love. It directly addresses the following three significant pain points every business continues to struggle with:

• Logistics data digitization
• Logistics stack connectivity
• Logistics collaboration

The layers of interconnectedness on PackageX Cloud are very unique. For example, connecting and enabling Inventory ? Shipping ? Contacts ? Communication Threads is typically a painstaking process requiring finding vendors and building custom integrations, but with PackageX, the developer experience is merely a handful of extra lines of code.

Many companies continue to build shipping, tracking, and fulfillment solutions in silos, but that’s not the fix. PackageX is taking on this status quo to deliver a comprehensive, scalable, flexible logistics infrastructure to become the backbone of the global logistics and supply chain.

We continue to help customers across retail & commerce, commercial businesses, logistics providers, and higher education. Some notable names include Hilton Grand Vacations , 世邦魏理仕 , FirstService Residential , Auburn University , WeWork , PENN Entertainment, Inc, New York Mets , Fender Musical Instruments Corporation , and On .

PackageX’s enterprise customers love the Cloud Platform's unique components and flexibility to simplify and modernize the logistics tech stack to deliver unparalleled customer experience, loyalty, and retention, all while meeting logistics profitability goals.

We’d love to dialogue with like-minded enterprises looking to grow their top line and deliver profitability by honing in on logistics efficiency.