E-commerce offers significant opportunities to the logistics industry, including ocean carriers, according to retailers.

Frank Diaz, executive vice president of Price Smart, a US warehouse chain and retailer and one of the top 50 container exporters in the US, urged the logistics industry to help it compete with etailers.

“E-commerce is generally difficult to make profitable,” he told delegates at Air & Sea Cargo Americas in Miami yesterday.

“You have to do all the things the customer used to do – go to the store, drive home. The challenge is to make that profitable, and we are relying on the logistics industry to help us with that.”

“Etailers have capitalised on one thing – a customer preference to shop online with 24/7 access to shops. That has changed the overall landscape and changed the bar. Prices must be complemented with the right shopping experience.”

He also questioned whether some of the tactics used by etailers may be “disruption or distortion”.

“Free shipping? Someone is paying. Disruption is the challenge presented to retailers but in logistics it is about how to deliver goods faster and cheaper, while retaining the strengths we already have.”

While Mr Diaz acknowledged that the air cargo industry was in pole position to reap the benefits, he also believed that there were opportunities for shipping lines, especially for larger and less urgent purchases.



Much of the e-commerce volumes so far have benefited air cargo at the expense of ships, but with growing middle classes globally, the consumer market itself is getting bigger – and there is no reason for ocean not to benefit too, despite the long lead times.

“In ocean, every day is going to matter. Carriers have an opportunity with track and trace – it could be owned by the carrier all the way through the delivery.

“Generally, it’s small packages but companies should prepare for increased demand for consolidation, with more visibility and lower landed costs. It’s about customer-centricity, and the most successful companies have focused on that.”

“If we collaborate as an industry, we have the opportunity to improve the customer experience.”

SeaLand CEO Craig Mygatt confirmed that customers were requesting more of shipping lines than simply the port-to-port sector.

“They are asking us for different things than they used to,” he said. “We are more open to partnering with people outside our core business, because customers are asking for it.”

Diana Najera, international business manager for Mexican express company Estafeta, said e-commerce had brought the company into more contact with its customers and helped it understand their behaviours.

“Customers want an integrated service. And there are also customers that have their own customers – and that means you have to maintain one and cater for the other.”

E-commerce has “changed everything”, the panel agreed.

Michael Steen, COO of Atlas Air, which has seen its customer base shift from scheduled airlines to express and ecommerce deliveries, said: “This is a true paradigm shift and we haven’t seen anything like it before.”

“Chinese consumers are buying Latin American perishables, that’s something we haven’t seen in the past. The size of packages is changing, and that has an impact on the entire supply chain.”

He noted that, as a result of the new market, one of the greatest challenges was forecasting.

Citing a clothing manufacturer in China which had expected 180,000 unique orders on singles day within seven hours, but in fact reached that within an hour, he said: “How do you plan for that? And that’s just one company, in one day, in one country.”

Romaine Seguin, president Americas for UPS, argued that the companies which controlled the last mile would be the winners.

“Customers own the market now – 10 years ago, retailers did. It’s all about how, where and when you want your goods.”

She added that forecasting had become an essential part of the business.

“Most business have peaks and valleys and you have to understand those projections.”

Comment on this article

You must be logged in to post a comment.
  • Julia Chernykh

    November 03, 2017 at 1:10 pm

    Thanks for the article! I agree with the author. And I also want to notice that e-commerce really is now one of top business directions. But many people are afraid of the idea to start your own e-commerce marketplace. Why? Why are they not ready to try? In my opinion, it is related to the fear of losing by making high stakes. But is the investment of big money a key element in running an e-commerce startup? No, it isn’t! Please believe me! Try the new free online tool that will help you to calculate all important steps on the way to creating the successful online marketplace! It’s called Marketplace Platform Advisor, and it’s completely free. Find out more here:

  • Najma Qureshi

    January 31, 2018 at 11:34 am

    Yes, its true. This increased emergence of ecommerce across the glob has raised the demand for the shipping services and even for the sea freight as well.

  • Shannon Weiss

    October 08, 2018 at 12:16 pm

    Yeah, it is extremely true that e-commerce paved way for more cargo transportation via air / water and created many business opportunities as well. It is calculated that about 90% of goods reaches customers through sea routes. But now a days, sea freights are facing a major concern, i.e. delayed shipping and associated heavy costs. Delay may be due to various factors. It can be cargo clearance delay, climatic changes, system errors, etc. Among this, cargo clearance delay can be avoided if we give a little care. Many logistics and transportation companies are nowadays using applications which can ease the process of customs clearance. For more details, visit: . This case study explains about an application to automate port declaration for sea freight logistics. The system facilitates submission of all necessary documents required for customs clearance to be submitted before reaching destination port / even before commencing the sail. System also helps the carriers to monitor whether their submissions are accepted / rejected/ needs any re submission. Customs officials can calculate entry charges to the port for the carriers and if they wish, they can do online payment / not, they can settle the payment while reaching the port. If any security issues are found, carriers can know that earlier and can fix the issue asap. Thus, all together, the system helps faster, safer and efficient submission of port declaration, lower response time by customs officials regarding paper clearance, better unloading of cargo and invoice by obeying the maritime rules. Wide use of modern technological systems in sea freight shipping should be encouraged in order to optimize operating cost.