Our CEO Derek Szopa was recently featured in Authority Magazine where he talked about his career path, founding CloudSort, and the way the company and technology as a whole is shaping the logistics landscape. We've highlighted the section about logistics, but to read the full interview, visit Medium here: Derek Szopa Of CloudSort Corporation On How To Reduce E-commerce Logistics Costs
Excellent, thanks so much for sharing that. I want to shift gears and talk about e-commerce. What was the original vision for your e-commerce business? What pain point(s) were you trying to solve for your customers?
Originally we wanted to provide a better delivery experience for organizations that did not have the capability or vision to do so. At the time we founded the company, there was a lot of focus within the industry on speed and seven-day per week delivery, so that’s what we set out to enable.
What are some of the biggest challenges you currently face regarding e-commerce logistics costs?
The industry is beholden to an outdated system design, by that I mean that there tends to be an over-reliance on heavy industrial automation while the benefits of software are overlooked. Put differently, current systems often route packages indirectly so that they can be sorted efficiently instead of sorting packages directly and eliminating steps in the delivery pathway. There are a lot of benefits to investing in a higher quality sort early in the package’s lifecycle.
What role do technology and automation play in reducing e-commerce logistics costs, and what specific tools or solutions have you found most effective in achieving this?
I think the benefits of automation are sometimes oversold. Again, I am referring to industrial automation. The best types of automation are expensive and not very flexible. Once installed, they can be difficult to move, and do not adapt to changing business conditions, such as larger package sizes. We focus on deploying smart technology with lightweight and low-cost infrastructure. Because of this, we enable the work to be performed at the points of greatest value creation.
How do you ensure that your logistics providers deliver the highest quality of service at the lowest possible cost, and what metrics do you use to measure their performance?
It is not just a cost decision. We want to work with partners that are like minded when it comes to creating value. Sometimes if you are the lowest margin business for a supplier, you can be the first to be cut off.
What are some of the key factors that influence your decisions when selecting logistics providers, and what advice would you give to other e-commerce professionals looking to make similar choices?
Think about the incentives. How scalable is the solution being offered? Is the organization you are contemplating partnering with financially stable?
Ok super. Here is the central question of our interview. Can you please share five innovative or unconventional strategies that you’ve employed to reduce e-commerce logistics costs?
1 . Make logistics fun. CloudSort must be an organization that people enjoy working with.
2 . Subscription based pricing. Used to align incentives.
3 . Focus on technology engineering not industrial engineering.
4 . Lower capital requirements. Low-cost infrastructure.
5 . Use technology to perform work at the point of greatest value creation.
Looking ahead, what are the biggest challenges and opportunities in reducing ecommerce logistics costs, and how do you plan to address them in the coming years?
Getting participants on both the supply and demand side to operate and transact in a more transparent way.
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