2013-Chapter 3 Logistics Services Abstract

There should still be considerable potential for growth in Taiwan's online shopping market. The transportation and logistics industry in Taiwan has improved its services significantly in recent years. Whether it is logistics or reverse logistics, home delivery logistics or convenience store logistics, the services provided are comprehensive. Additionally, with smartphones becoming more and more prevalent, mobile commerce has flourished as well. It is expected that online shopping services in Taiwan will extend to every aspect of consumers' day-to-day needs, which will accelerate the growth of the demand for the island's consumer logistics and cross-Strait home delivery services.

Currently the physical logistics services for B2C e-commerce in Taiwan include the following: warehouse management services, transportation and delivery services, and third-party integrated logistics services. In warehouse management services, e-commerce (EC) logistics service providers are responsible mainly for providing online shopping vendors with merchandise warehousing and inventory management services; order management and outsourced merchandise transportation services may also be provided. With respect to transportation and delivery services, EC logistics service providers mainly provide online shopping vendors with consigned shipping, delivery and cash-on-delivery (COD) services; product marketing and sales assistance may also be provided to online shopping vendors. Third-party integrated logistics services provided by EC logistics service providers include a full range of supply chain services associated with logistics requirements: integrated customs clearance, transportation, warehousing, distribution processing, order management and COD.

Cross-border logistics refers to: Making logistics services available for purchase on the Internet as ordinary merchandise. Customers can look up the costs of cross-border shipments at any time via the Internet and complete the order accordingly. They can also check the latest shipment and transshipment statuses. With the environment of cross-border e-commerce logistics becoming more mature, cross-border online shopping will soon be experiencing growth. Cross-border flow of goods and services is based locations in China as the city or port of dispatch: e.g. Beijing, Shanghai, Wuhan, Chengdu, Chongqing, Xiamen, Guangzhou and Shenzhen. These cities are equipped with the necessary warehousing facilities and collaborating logistics service providers. Taiwanese providers are advised to establish a solid foundation with their own management skills and experience before expanding to China.

Ninety percent of Internet-based vendors engaged in e-commerce believe that logistics service providers should have the following capabilities: making shipment statuses available for customer inquiry in real time, being equipped with fast and stable reverse logistics capacity, providing payment collection services and ensure information security, as well as refrigerated shipment and international express delivery. This indicates that merely being able to deliver goods can no longer satisfy logistics customers. Having follow-up and comprehensive supporting capabilities is what online shopping vendors really want in a logistics service provider.

We believe that for Taiwan to succeed in this industry the key is to provide, as early as possible, an integrated service model that includes logistic support for both financial and logistics services, and helping smaller online shopping vendors to improve their operations and enhance their market competitiveness.