2019 Supply Chain Challenges: E-commerce, Borders, & Politics

For 2019, shipping costs, global trade politics and cross border e-commerce are the top concerns amongst supply chain professionals. Retailers must keep the supply chain moving despite rising costs, new tariffs, labor shortages and the challenges of cross-border e-commerce. Meanwhile, e-commerce sales continue to rise and e-commerce return rates hover at 30%. This article takes a look at EFT’s Supply Chain Hot Trends 2019 report and the current state of the industry.

2019 Supply Chain Challenges

EFT’s research shows that cost reduction is the most important challenge for the majority of respondents while visibility—the ability to track products from the manufacturer to their final destination—is still a top priority but of lesser concern compared to reducing costs. Rising costs are attributed to the increase of e-commerce sales. Analysis shows that e-commerce sales should increase from 25% in 2018 to 40% in 2023. As a result, the leading concerns for Logistics Service Providers (LSPs) are the ability to meet customer demand along with meeting overall cost levels. To further complicate matters there is a continuing shortage of truckers, and more recently, there are fewer numbers of available warehouse workers.

Global Politics, Rising Costs & Cross-border Challenges

The global economy is a key concern in the supply chain industry; almost 46% of respondents are expecting a weak growth environment in 2019 while less than 26% expect reasonably strong growth. There’s also the issue of cross-border e-commerce, trade and tariffs. The current U.S. administration has brought in tariffs that will impact trade with China, Canada and the EU; then there’s complications with NAFTA and Brexit. As a result, 82% believe that the cost of moving goods across borders will rise.

The two biggest challenges with cross border e-commerce, besides cost, is logistics and returns. With more people shopping online, borders are blurred and nearly a quarter of e-commerce sales are now made cross-border; but consumers still expect delivery within a matter of days. Consumer expectations also include the ability to return products as well without further charges.

Cross-border E-commerce Predicted to Grow

Despite the increased costs and challenges associated with cross-border e-commerce, the EFT study predicts that cross-border e-commerce will continue to grow, with 68% saying they provided cross border e-commerce in 2018—a 17% increase from 2017.

Reducing Costs and Increasing Recovery Rates

For retailers, the ability to reduce costs and recover from the impact of returns is paramount; especially in a world where consumers don’t see borders and expect free shipping and returns. This is where a company like B-Stock comes in to play. B-Stock is the world’s largest online liquidation platform that directly connects major retailers with excess inventory to resellers who own clearance and liquidation stores.

B-Stock creates private marketplaces for retailers to auction their returned and excess inventory to recover from the costs of shipping, processing and warehousing product that can’t be resold as new. This technology-driven approach will increase recovery rates on consumer returns and will keep warehouse inventory moving.

We invite you to review our case studies and our suite of private marketplaces that we operate for 9 of the top 10 U.S. retailers, including hundreds more in the U.S. and internationally across Europe.