Advantages of Cross-Docking Network in E-commerce and Its Implementation

The exponential growth of e-commerce is accompanied by the constant search for supply chain optimizations that lead to shorter delivery times. One valuable strategy in this never-ending pursuit is cross-docking: a logistics practice that involves receiving goods from suppliers and immediately transferring them to outbound transportation, without the necessity for long-term storage. In the e-commerce context, this dynamic becomes extremely valuable due to the need for fast order fulfillment. Bypassing the traditional warehousing and reducing the handling time, cross-docking makes a faster movement of products from suppliers to clients possible, minimizing lead times and increasing the efficiency of the operations.

In e-commerce, quick and reliable order fulfillment is a key differentiator. Cross-docking allows businesses to expedite the process by minimizing the time between order placement and delivery of the product. The dynamic ensures that items are rapidly dispatched to customers and fulfill their expectations for shorter delivery times, as they are received, sorted and quickly transferred to outbound shipments. This efficiency and agility contribute to increase customer satisfaction and loyalty.

Furthermore, while traditional warehousing leads to substantial associated costs towards inventory holding, storage space and stock levels management, cross-docking minimizes the necessity for long-term storage, reducing inventory holding costs for e-commerce business and improving their cash flows.

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  Cross-docking scheme, by Creative Safety Supply.

Nevertheless, efficient cross-docking requires robust information systems and real-time visibility across the supply chain. In other words, advanced technologies, such as Radio-Frequency Identification (RFID) and integrated software solutions must be used to provide e-commerce companies with comprehensive visibility into the movement of the products across the cross-docking network. This visibility is necessary for better planning, monitoring and coordination needed for an improved inventory management with less errors in order processing.

In the fast-paced world of e-commerce, the supply chain optimization is a priority. Improving the cross-docking network provides a solution to streamline operations, accelerate order fulfillment, reduce inventory holding costs and enhance overall customer satisfaction. By adopting advanced technologies and embracing real-time visibility, e-commerce businesses can unleash the potential of cross-docking and achieve competitive advantages.

Less Is More: The Power of Less Than One Truck Load (LTL)

In the fast and over competitive business environment that we live in today, the optimization of the supply chain is key to reduce costs and minimize environmental impact. The concept of “Less than one Truck Load” or LTL, becomes a game-changing logistic trend in this context, offering significant advantages in terms of cost-effectiveness, reduced carbon footprint and optimization of resources usage. But let us begin with the basic question: what is LTL?

Normally, freight shipments have used the Full Truck Load (FTL) approach, meaning that an entire truck is filled with a single batch. LTL, however, represents a paradigm shift by allowing multiple shipments from different sources to be consolidated into one single truck. The concept relies on intelligent logistics management systems that optimize the routes, maximising the truck’s capacity utilization.

One of the main advantages of Less than one Truck Load shipping is the cost-effectiveness, meaning that business can save on transportation expenses. Shippers can share the costs based on the space they occupy instead of bearing the full cost of an entire truck, being particularly strategic for SMEs (small and medium-sized enterprises) that may not have enough demand to fill in entire truckloads. Thus, this new approach would represent an affordable option that would allow these businesses to remain competitive. One disadvantage, however, is the longer delivery time. The website Logistics eLearning published a summary of factors that should be considering when choosing between FTL or LTL.

LTL can also be considered an appealing solution in environmental sustainability terms: by optimizing the space utilization and reducing the runs of empty trucks, the Less than one Truck Load approach minimizes the number of vehicles on the streets, thus, leading to lower fuel consumption, less greenhouse gasses emissions and less traffic, contributing to a more sustainable logistics industry. Furthermore, the usage of advanced softwares allows the optimization of routes, reducing overall mileage.

Moreover, other resources, such as fuel, labor and storage space, are also optimized. This efficient allocation of resources enhances operational efficiency, reduces waste, and helps business unlock hidden value in their supply chains. One extra benefit is enabling just-in-time deliveries, reducing the need for excess inventory and liberating storage space.

Nevertheless, the implementation of this approach requires collaboration and partnerships between shippers, carriers and logistic providers. All these stakeholders have to work together to share information, align the schedules and coordinate their interests to guarantee a smooth operation. In a LTL ecosystem, advanced technologies, such as cloud based platforms and data analytics play an important role in enabling the collaboration and fostering the trust among the stakeholders.

In summary, the concept of Less than one Truck Load represents an innovative way of managing freight shipping, creating benefits for the businesses, society and environment. It maximizes the efficiency, reduces costs, lowers carbon emissions and optimizes the utilization of resources. As the demand for sustainable and cost-effective logistics solutions continues to rise, embracing LTL presents an opportunity for businesses to achieve a competitive edge while contributing to a greener future. By embracing the philosophy of “less is more,” we can unlock substantial benefits and pave the way for a more efficient and sustainable supply chain ecosystem.

How Brazil’s Lack of Railways Impacts Logistics and Economic Growth

Growing up in Brazil means dealing with the fact that you will be dependent on the roads: high costs of flight tickets and a sparse railroad network will force you to drive long distances more often than you would like. The fifth largest country of the word, covering almost half of South America’s territory, struggles with its logistics, particularly, when it comes to transportation infrastructure. The lack of railways in the country is a significant issue and directly impacts its logistics and economic development. This blog post will discuss why.

Currently, roads are used in about 60% of Brazil’s domestic freight transportations, while railways account for only 15%. The disparity creates different logistical challenges in the country, resulting in higher costs, long travel times, safety concerns and even risks of shortage of supplies, as it will be exemplified soon.

It all started in the beginning of the 20th century, when successive governments prioritized the development of roads over railways. This occurred in a more pronounced way during the government of Juscelino Kubitschek, president of Brazil from 1956 and 1961. During his administration, the automobile industry was growing rapidly in the country, and the development of highways was seen as an important factor in supporting this industry. At the same time, railways were seen as outdated technology and the country’s rugged terrain with huge distances made building hailways an expensive challenging task.

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Map of the Brazilian rail network in 2023, according to the National Association of Railroad Transporters.

The consequences of these policies still resonate in Brazil’s logistics in several ways. Some examples are:

Higher Transportation Costs: roads are more expensive to maintain and to operate than railways, especially when it comes to heavy cargo/long distance transportation. Therefore, this overreliance on roads makes Brazilian goods less competitive in internal and external markets, negatively affecting the economy of the country.

Safety Concerns: some regions of the country suffer with lack of investment, thus the conditions of the roads are not the best. This leads to accidents that impact not only the safety of drivers and passengers but also can damage or destroy products being transported. However, the lack of a rail network in the country makes companies have to opt for this less safe option.

Environmental Impact: the large number of vehicles, from which the huge majority is still fossil fuel powered, is responsible for a great amount of greenhouse gasses emissions, making it more difficult for Brazil to meet its climate goals.

Risk of Shortages: in 2018 a eleven days truck drivers’ strike took place in Brazil, leading to fuel and food shortages across the country and economical losses estimated at around $1.75 billion. This fact made it even more explicit how companies struggle to find alternative means of transportation in Brazilian territory.

In conclusion, the lack of railways in Brazil is a significant challenge for the country’s logistics and economical development. In a country that relies heavily on exports, this issue will remain as long as efforts are not directed to improve the transportation infrastructure, hindering its competitiveness in the global market. Nevertheless, the overreliance on this mode of transport also directly affects the sustainability goals of the country.

Brazil’s ‘affordable’ electric truck factory may intensify the bet on green logistics alternatives in the country

The active search for more sustainable transport options is a global trend in a lot of companies and countries, and Brazil is no exception. In a country completely dependent on its road network for transportation of people and cargo, alternative sources to fossil fuels are always on the agenda.

Electric powered vehicles are undoubtedly one of the main candidates to solve this global issue, and, after gaining relevance in the light vehicle market, the modal is becoming more and more popular also in the cargo transport. Here are three cases of companies that are implementing electric vehicles in their operations in Brazil:

• Braspress, Brazil’s leading parcel transport company, increased its electric fleet, buying 30 more electric vehicles from JAC Motors in the first quarter of 2022.
• Ouro Verde, another traditional transport company, also started betting on electric vehicles on its fleet. The company announced an investment of over 18 million euros at the beginning of 2022, 50% of which would be destined to the purchase of electric vehicles.
• The international beverages producer AMBEV, on its turn, has the audacious goal of using only clean energy powered trucks as of 2025. The company  announced the purchase of 1000 electric trucks in a partnership with the startup Fábrica Nacional de Mobilidade (FNM). The entire fleet, which is scheduled to be available by the end of this year, will represent a yearly cut of 128 thousand tons of greenhouse gasses – in comparison to trucks powered by fossil fuel.

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  Electric truck from AMBEV’s fleet.

However, one of the biggest barriers that hinder the popularization of this modal in the logistic operations of Brazilian companies is still the big price difference between electric and fossil fuel powered vehicles, more accentuated than when compared to other regions, such as Europe. In October 2022, prices were varying between 85,000 and 220,000€, for vehicles between 12 and 14 tons, with autonomies varying between 110 and 250 km.

But the increased presence of Hitech Electric in the national market may represent the beginning of the change in this scenario: the Brazilian company, which has already been operating for five years as an importer and developer of electric vehicles, officially announced the launch of the first assembly line exclusively for 100% electric utility vehicles in Brazil, evidencing its transition to an automotive assembler.

The line was implemented in a new factory with a total area of 10,000 m² and  started operations in March of this year. It will be dedicated to small utility vehicles that will be equipped with batteries from WEG, a Brazilian company that will supply the Lithium Iron Phosphate (LFP) set. In addition, all electric vehicles produced by Hitech will be able to receive an additional battery to extend their autonomy.

Rodrigo Contin, CEO of Hitech Electric, stated:

“We now have different electric models for transporting goods, tailor-made to meet last-mile needs for parcels and deliveries, as well as super-applications, urban deliveries, e-commerce networks, among others. Our models generate a drastic reduction in the operational cost of companies. Besides driving the expansion of the industry in Brazil, our models also bring advantages to the environment: zero carbon emission”.

In the first stage, the assembly capacity is 50 vehicles per month, which may expand to 100 units in a short time. The trucks with nationalized assembly are the e.coTruck, with bucket, and the e.coCargo, with trunk. The first costs from 22,500€ and the second has a starting price of 22,800€, both with a load capacity of 800 kg, but the maximum speed is 70 km/h – for comparison, a Kia Bongo with a turbo diesel engine, which is a type of vehicle commonly used in this environment, costs around 28,200€.

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e.coCargo: one for the electric models that will be assembled by Hitech in Brazil.

Whether Hitech’s electric trucks will become increasingly popular and competitive in the future, we do not yet know, but according to the company, by now their first batch is already entirely sold. In itself it is interesting to note the emergence of cheaper alternatives for cargo transport based on clean energies, although for countries of continental dimensions such as Brazil, the lack of a rail network for such purposes is unacceptable.