E-commerce Logistics: The Retailer’s Guide to Outsourcing Transportation Management
The increase in e-commerce sales over the last few years has created a nightmare for transportation management. Not only did supply chain disruptions and out-of-stocks hit retailers hard, they came at a time when many e-commerce retailers were in the midst of digital transformation. Unprepared for the modern, cloud-based integrated ecosystems that a true omnichannel retail experience requires, suddenly, retailers had customers expecting their orders delivered in two days, from multiple fulfillment options, with less staff, and in an uncertain and quickly changing environment.
Radial Europe, Groningen Fulfillment Site – Loading Bays
To meet these delivery expectations and the surge in volume, retailers needed to be able to:
- Streamline inventory and shipping data from disparate sources
- Manage multiple carriers and services, including newly contracted ones
- Communicate in real time with suppliers and manufacturers
- Deal with cross-border delays, customs, and documentation
- Track delivery status globally and keep customers notified in near real-time
None of these things are easy to do. But to deliver on customer expectations today, e-commerce retailers must be able to do them well.
Why? Because customer experience — and customer loyalty — depend on it. And, because your true competitors are doing it well. So, whether you lead in your industry for a great delivery experience or you are up against those who do, getting the delivery experience right is essential to retaining customers.
The question is: do you invest in what it takes to handle transportation management in-house or do you outsource it to an e-commerce transportation management partner?
In-house: transportation management system
To handle it in-house, you’ll need to invest in a cloud transportation management system (TMS). A TMS connects to all other systems and tools in your supply chain to provide a single system to work with in optimizing, integrating, and managing transportation and parcel delivery.
It should be cloud-based, easy to use, and integrate with existing systems. It must offer real-time visibility into shipping volumes, costs, carriers, labels, documentation, rates, timelines, and delivery events. Analytics and reporting should highlight savings opportunities and support better budgeting. Most importantly, it should boost on-time delivery, keep customers informed, and automate returns.
Think of it like an air traffic control tower. It can handle all the data and track the information you need, but like an air traffic control tower, it needs someone to manage it.
Investing in a TMS may be the right approach to managing transportation for your e-commerce business if you have the staff and resources to devote to managing it full time, and an IT team available to support you quickly when glitches happen.
Keeping transportation management in-house is often the right move for businesses that:
- Have the budget, staff, and skilled resources to invest in a TMS and manage it 24/7
- Are small enough to have manageable order volumes with minimal peak seasons/events
- Are large enough to fully build, own, staff, and manage a transportation function within the business
- Are not anticipating fast growth or unexpected surges in sales volumes
Every e-commerce retailer that is concerned about their capacity to handle transportation management well — or the resources it requires — should consider the option of outsourcing it before making a decision to keep it in-house.
Outsource: transportation management partner
In a partnership, you must be able to trust your partner to fulfill their obligations and be true to their values. Before we talk about what a transportation management partner can do for your business, let’s talk about trust.
E-commerce retailers often hesitate to outsource key parts of their business, fearing a loss of control over the customer experience—their most valuable asset. Any partner must be carefully vetted to ensure they align with your CX standards, values, and mission, and can match or exceed your delivery.
Top transportation management partners bring industry experience, embrace innovation, and invest in their teams, tech, and infrastructure. They act as true partners—collaborative, service-focused, and driven by your success.
Outsourcing transportation management to a trusted partner may be right for you if:
- Demand has outpaced your ability to deliver orders on time. Most in-house logistics and transportation management teams cannot scale fast enough (through hiring or additional shifts) to keep pace with the growing surge in demand.
- Your technology has not been updated and integrated to the cloud. On-premises and insufficient cloud transportation management systems (TMS) struggle to remain up-to-date and often do not integrate with other systems easily. This can cause blind spots and data silos in your supply chain logistics process.
- Customer experience is taking a hit. Customer satisfaction drops when there is a lack of visibility into the shipping and delivery process, and when deliveries fail to arrive on time. In-house teams that are overwhelmed by the transportation management process find that it’s increasingly difficult to meet customer experience KPIs and service level agreements.
- You’re not getting the best rates with carriers. It’s difficult to get the best rates during contract negotiations with carriers if you’re using spreadsheets or do not have real-time visibility into the logistics functions and transportation services. If you’re working directly with carriers, you likely aren’t benefiting from the better rates you can receive when you outsource transportation management because of providers’ extensive relationships and volume discounts.
- Your shipping costs are getting out of hand. Shipping is a huge part of an e-commerce business and, as transportation costs have increased along with a burgeoning demand for faster shipping, it’s easy for shipping costs to spiral out of control. In addition to managing shipping costs, outsourcing transportation management optimizes final mile delivery, increases speed to market, and meets the ever-evolving demands of consumers.
- You need to focus on other core competencies of the business. Along with high costs, shipping consumes a ton of focus and time for e-commerce companies as they try to streamline supply chain logistics. This eats away at time that needs to be spent on the core business, such as product development, merchandising, sales, and customer care.
- Peak season order fulfillment anxiety is keeping you up at night. Peak season is a high-pressure time for the e-commerce and supply chain logistics industry, and there is no room for error when it comes to keeping customers happy during the holidays. Having a trusted and dependable transportation management partner that will handle all the logistics details needed to achieve your goals during peak season is a solid strategy for success.
If this hits home, then it’s time to dig deeper into what a transportation management partner can bring to your business.
9 ways a transportation management partner supports you
Transformation management partners offer the expertise, infrastructure, and industry connections that are hard to build internally. With deep, specialized experience in e-commerce fulfillment and logistics across diverse retailers, they bring proven best practices to optimize your transportation management.
One of the questions to ask yourself before deciding if outsourcing is right for you is whether or not your business can obtain, create, or gain the same depth of expertise and refined processes — and at what cost — as an outsource partner.
Here are 9 ways a partner can support and enhance your customer experience:
- Strategic Fulfillment Locations. With two-day shipping now the norm, retailers must keep inventory closer using regional warehouses or store fulfillment—but managing that space is costly and complex. Partnering with a provider that offers strategic distribution and store fulfillment can reduce costs and ease the operational load.
- Modern Cloud Technology. Staying current with technology is tough—it demands time, budget, and expertise that in-house teams often lack. An outsourcing partner brings a modern cloud stack built for integration, automation, and efficiency. Their tech investments are a core strength, driving your success through smarter, streamlined operations.
- Automated Best Shipping Option. With countless shipping and carrier options, automation is key to choosing the best method based on inventory location, delivery distance, and fulfillment type. Outsourcing partners leverage advanced TMS technology to optimize shipping at checkout—cutting costs and improving delivery speed.
- Carrier Management. Only the largest retailers have the power to negotiate the best rates with carriers. However, outsource partners like Radial build and maintain strong networks and relationships with carriers that optimize service levels and costs for their customers. Radial’s high-volume parcel network offers final mile solutions typically reserved for the largest shippers. An outsource partner should be able to get you better rates and improve relationships with carriers.
- Dropshipping. Some outsource partners will offer dropship solutions to let you leverage dropship suppliers’ inventory and resources to fulfill online orders directly to your customers. By automating dropship operations, you eliminate human error, decrease required resources, and deliver the product to your customer’s door faster.
- International Shipping. International shipping can quickly get complicated with customs, documentation, and carrier requirements. An outsource partner will manage all international shipping for you. Radial’s cross-border economy and express shipping options through its network of carriers include both delivery duty paid and delivery unpaid —enabling retailers to save on international shipping while meeting customers’ delivery expectations.
- Reverse Logistics. E-commerce retailers typically see around a 30% return rate. An outsource partner like Radial can handle your entire reverse logistics process, including hassle–free, cost–effective shipping alternatives to provide your customers an efficient reverse logistics experience.
- Final Mile Optimization. The final mile is typically the costliest. Outsource partners, like Radial, have the experts and transportation solutions to design the perfect blend of carriers and service levels to meet your unique needs. This will help reduce your final mile costs while ensuring customers get their parcels as expected.
- Reporting & Analytics. Data is key to smarter decisions and better CX. Transportation data helps refine fulfillment and delivery while identifying supply chain issues. Radial Reporting and Analytics offers a full operational view with accessible dashboards, enabling proactive adjustments to boost margins, reduce churn, balance fulfillment loads, and optimize carrier performance.
Outsource transportation management partners provide added value and work with you to cultivate an exceptional delivery experience for your customers. They will help you save budget that can be reinvested in other areas of the business, and can elevate your business in ways that are difficult to organically do on your own.
Radial transportation management
Radial provides comprehensive transportation solutions that include a comprehensive network of national and regional parcel carriers, final mile network optimization, and extended holiday cutoff programs that allow you to keep your promises to your customers every time.
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