B2B Logistics: Demand, Challenges & Solutions
Businesses are currently facing various challenges such as lack of shipment space due to flight suspensions, government restrictions, and lack of shipment visibility. Third-party logistics providers (3PLs) help to provide solutions to these challenges and minimize supply chain disruptions for B2B shipments to the lowest level.
What classifies as business-to-business (B2B) shipments?
Business-to-business (B2B) fulfilment involves two or more parties such as manufacturers, retailers, wholesalers and merchants to maintain the supply chain. Instead of directly delivering to consumers, these businesses focus on fulfilling orders to other businesses.
Compared to Business-to-consumer (B2C) shipments, B2B shipments are characterized by higher order quantities, and are mainly stored on pallets (Stock Keeping Units).
| Shipment Type | Business-to-Business Model (B2B) | Business-to-Consumer Model (B2C) |
| Target Recipient | Manufacturers, retailers, wholesalers and merchants | Consumers |
| Quantity and Unit of order | High | Low |
| Customs Procedure | More documentation | Less documentation |
Challenges
Flight Suspensions or Reduction
In today’s environment, many flights have been suspended or reduced to a minimum in response to Covid-19. With the aim of stopping the spread of the virus, governments from various countries have imposed lockdown policies, negatively impacting cross-border deliveries.
EuroControl displayed that the number of daily flights globally decreased by 23% in November 2021, compared to November 2020. Particularly in Europe, domestic travel dropped 24% and international travel (in and out of Europe) dropped 30%. This increases the risk of delayed shipments which in turn has a negative impact on the supply chain between manufacturers and retailers, and eventually leads to a decline in sales and the number of unsatisfied end-consumers.
Examples of Flight Suspensions in December 2021:
| Airway | Restrictions |
| Cathay Pacific | Cancelled over 23 flights till the 31st of December |
| Ryanair Airways | Cancelled all flights to Morocco until February 2022 |
| British Airways | Cancelled flights to South Africa until further notice |
| Qatar Airways | Suspended passenger flights to five African countries until further notice |
| Australia Airways | Cancelled all direct flights to South Africa until the end of 2021 |
Lack of shipment visibility
All shipments have to go through numerous processes such as labelling, packaging, scanning, and passing through Customs. Therefore, shipment visibility is extremely important for customers. Without real-time delivery status updates, retailers are not able to accurately predict the delivery date and time, which further
increases uncertainty.
Retailers should have full transparency in the delivery process. If shipments won’t arrive within the scheduled time frame, companies can prepare and make alternative solutions to manage business operations. Without this visibility, retailers can easily lose track or fail to meet their order promise dates, which leads to chargebacks and penalties.
Solutions
Smart technology & flexibility in routing
3PL’s should always be flexible and proactive so that retailers can maintain their supply chain. Therefore, it is important to use a third-party logistics company (3PL) that seeks for alternative solutions and optimizes the most suitable routes for deliveries. For example, if an airline cancels all direct flights to Germany, a 3PL should find another option to deliver shipments while minimizing the delivery time impact.
With the help of tracking systems, businesses are able to track their shipments at any given point through email and system notifications. Especially when it comes to fulfilling orders, retailers should get complete transparency on the real-time status and location of their shipments.
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