The consumer electronics (CE) market hit an all-time high in revenue last year of $211.3 billion, a two percent increase from the previous year. CE is expected to grow again by over one to two percent this year as well. Another exciting trend in this sector is the growing role that e-commerce is playing. In 2012, the e-commerce channel accounted for $49 billion of CE sales. That number is forecasted to eclipse $108 billion by 2018.
With projected growth expected to continue for the overall industry, there are significant opportunities as well as challenges in store for electronics manufacturers and shippers alike. One key challenge is finding ways to efficiently get products and orders to customers, specifically from the transportation perspective.
There are two similar, yet different, types of shipping transportation that can offer distinct benefits:
Less Than Truckload (LTL)
Less than truckload shipping (LTL) is the transportation of small freight. The alternatives to LTL carriers are parcel carriers or full truckload carriers. Parcel carriers usually handle small packages and freight that can be broken down. Over the past several years the LTL sector has seen a drop in profits and growth. However, new market factors, like lower gas prices and a decrease in competition, have set this $35 billion industry up for its best year in over a decade. New parameters like DIM weighting are also changing the way this sector operates, but with some strategic changes, it could create cost saving opportunities for electronics manufacturers as well.
Partial truckload shipping is ideal for shippers who need faster transit times, less handling, and a cost-effective solution. Partial truckload can also be referred to as “volume truckload” and it describes anything that fits in between a full truckload shipment (26-30 pallets / 42,500 lbs.) and LTL (1-6 pallets / <12 linear feet).
Partial truckloads are also exempt from some of the costly requirements that impact LTL and full truckload shipments. Freight class is not required as it is with LTL, and common fees and charges like minimum density that apply to full truckloads typically aren’t required. Furthermore, this type of shipment also doesn’t usually stop at distribution terminals, increasing the percentage of on-time deliveries.
While the growth in the CE sector is exciting, it does also present challenges with the new opportunities. Analyzing your transportation strategy is just one aspect where costs can be trimmed and new efficiencies can be gained. Barrett Distribution Centers, with experience and expertise in consumer electronics, e-commerce and retail fulfillment, can design and implement customized supply chain solutions that are right for any CE firm.