For Rakuten Super Logistics (RSL), 2020 has been a year of growth. With more and more retailers embracing digital transformation and e-commerce sales soaring across the nation, the Las Vegas-based company — which has been serving American e-commerce companies large and small with cutting-edge smart logistics as part of the Rakuten Group since 2013 — has stepped up.
During the first eight months of 2020, the company already matched its shipping total from 2019. And with the holiday season just heating up, Rakuten Super Logistics expects that number to nearly double by the end of the year — a year-on-year growth of 80%. Revenue is also expected to increase nearly 50% from last year.
More than just pandemic demand
There’s little doubt that the pandemic has contributed to the growth in demand for online shopping and deliveries. But Rakuten Super Logistics president and CEO Michael Manzione says that it is far from the only thing driving RSL’s astronomical trajectory.
“RSL was growing prior to the pandemic,” he reveals. “We positioned ourselves by expanding and doubling the number of facilities in 2017 and 2018, so when the pandemic occurred, we were able to take advantage of the accelerated growth in e-commerce.”
Leveraging a scalable network that reaches every corner of the continental U.S., Manzione has been quick to adapt RSL’s warehouses to the rapidly changing demands of American e-commerce merchants. Pandemic demand brought about shipping disruptions across the country, causing some major logistics providers to restrict their services to essential items — a move which left many merchants of “non-essential” items stranded.
“These changes led to many online sellers scrambling to find alternative fulfillment options,” Manzione explains. “Sellers have been forced to diversify their sales channels by building their own e-commerce stores or leveraging different online marketplaces and alternative fulfillment options.”
Manzione’s team has been busy running campaigns — such as the “We Ship (Almost) Everything” initiative — to pick up those merchants left behind amid pandemic disruptions as other providers limit their capacity for the upcoming holiday season. And as for their current merchant partners: RSL is confident that their advanced cloud-based inventory tracking tools, automated warehouse management and local customer support will entice clients to stick with them moving ahead.
A more local, environmentally friendly approach to logistics
Between shipping disruptions, border closures and uncertainty surrounding the pandemic, Manzione expects more online retailers to shift the focus of their operations closer to home.
“E-commerce retailers may turn more to nearshoring for their products and manufacturing,” he predicts. “More logistics companies will be better prepared to handle future risks… Manufacturing products closer to home could reduce manufacturing and shipping costs and head off some of the negative financial impact we have seen with country shutdowns.”
In the future, Manzione also expects the online shopping experience to become more local. “Customers want the best of what a brick-and-mortar experience has to offer with the flexibility of an e-commerce experience,” he says. “BOPIS (buy online, pick up in store) will continue to accelerate as a preferred shopping method, and AI will continue to expand to offer experiential buying — while never leaving the house.”
As the logistics industry continues its astonishing growth, Manzione predicts this shift towards “local” will lead to more environmentally friendly practices all around. “Circular supply chains, where most of a product is returned to the manufacturer for reuse or recycling, are going to become prevalent.” Smart warehouses, meanwhile, will help drive energy efficiency, and electric transportation such as electric vehicles for last-mile delivery will continue to gain momentum.
For now, however, Manzione’s focus is on establishing Rakuten Super Logistics as a formidable force in the warehousing and distribution industry. “Our plan is to transition from a focus on revenue to one of margin,” he reveals. “In the short term, we’re looking at opening facilities on the East and West Coasts that are focused on B2B, Drop Shipping and inventory distribution. Longer term, we would like to expand into Canada and Europe.”
Manzione’s ambitions are a clear sign that he isn’t expecting the logistics boom to end with COVID-19. “The pandemic has accelerated an already high-growth sector of the economy by three years. We see this trend continuing,” he predicts. “With global parcel delivery expected to pass the $100 billion mark in 2020 — and consumers expecting 1-hour deliveries — 2021 is bound to be a busy year.”