Logistics

What logistics covers

Logistics covers every movement of goods: delivery from the supplier, putaway, picking, packing, dispatch and return. The term is wider than shipping. A shipping cost calculation looks at the last step only, logistics looks at the whole chain and therefore also at how much work happens before dispatch.

For online retail, logistics is one of the few places where cost and customer experience can improve at the same time. Faster picking shortens delivery time and lowers staff cost per order, because fewer journeys are needed.

Which tasks belong to it

• Goods in: checking the delivery, matching quantities, reporting complaints to the supplier. Mistakes here surface later as a wrong delivery to a customer.
• Putaway: where each item sits and how quickly it is found. The arrangement in the warehouse decides travel time.
• Picking: assembling the items. With many small orders this is the most staff intensive part.
• Packing: protection, size and inserts. An oversized box costs freight and material.
• Dispatch: choosing the carrier, linking it to the system, handover.
• Returns: receiving, checking, restocking or writing down.

Where the cost arises

Freight is the most visible item but rarely the largest. In shops with many small orders, staff cost in picking and packing dominates. With goods that have a high return rate, the return adds to it and burdens twice: once for the transport back and once for handling it again.

The most effective measure is usually consolidation. Two orders from the same customer on the same day should not be packed twice. Anyone who knows their cart abandonment and knows that customers often order in two runs can start exactly there.

Which figures carry

Four values are enough for steering. The lead time from order entry to handover to the carrier shows how fast the shop itself is. The cost per picked line item shows the staff effort. The share of correctly delivered orders shows quality. And the turnaround of returns shows how quickly goods become available again.

Frequent questions

• When is an own warehouse worth it? When volumes are stable and the processes are known. Before that a service provider is usually cheaper.
• What is fulfilment? Outsourcing the entire logistics operation to a provider.
• Should packaging be standardised? Yes. Few sizes are cheaper, faster to pack and look calmer.