The Ongoing Convergence of Logistics and Commerce

The traditional lines between software vendors and 3PLs, and between the front-end of e-commerce and the back-end, are all starting to blur and dissolve.

I wrote that back in August 2016 in “The Convergence Of Logistics And Commerce (And Social Networking Too).” The post was in response to news at the time that Symphony Commerce had raised $11 million to grow its fulfillment business. As I wrote in the post, “Yes, Symphony, a company that started out as a software company enabling the front-end of the e-commerce process, is now a third-party logistics provider (3PL) too.” 

Things didn’t work out as planned for Symphony Commerce (the company was acquired by Quantum Retail in May 2018), but the convergence of logistics and commerce has continued nonetheless.

Even traditional retailers are jumping in.

As I highlighted last September in “Retailers Offering 3PL Services: What Is Going On?,” several large retailers are not just selling clothing and other consumer goods, they’re selling logistics services too.

Of course, Amazon has been doing this for years. But now you have Gap which launched a fulfillment service for retailers last fall called GPS Platform Service. In January 2022, BJ’s Wholesale Club acquired the assets and operations of four distribution centers and the related private transportation fleet from Burris Logistics. And in November 2021, American Eagle Outfitters acquired Quiet Logistics for $350 million (a few months after acquiring AirTerra). 

You can’t forget about Walmart either, which has its Walmart Fulfillment Services and Walmart GoLocal offerings. 

The latest example is the news last week of the launch of the Flexport App on Shopify. Here are some details from the press release:

Through the Flexport App available on the Shopify App Store, millions of merchants can now quote, book, track, and ship products to the U.S., with additional port coverage coming this year. Merchants can seamlessly integrate their product library from their Shopify store, gain SKU-level visibility to inventory in transit, and choose the right ocean freight shipping solution for their business—including Less-than-Container-Load (LCL) and Full-Container-Load (FCL) services—along with customs clearance and enhanced cargo protection. Merchants will also have access to real-time cost estimates and the ability to leverage enterprise-grade reporting and analytics to remove common barriers to freight forwarding.

Why is this convergence continuing? For the same reason I gave back in 2016: 

The reason is simple: customers are looking for Simplicity-as-a-Service — that is, they are looking for partners, regardless of what you label them, that can help them achieve their desired outcomes in an ever-changing business environment with less time, effort, cost, risk, and resources.

In a 2015 LinkedIn post, Meg Whitman, the former CEO of Hewlett Packard Enterprise, said that “Every company is a technology company.” Turns out she was half right. Every company is a logistics company too.