The Modern 3PL: Why 2017 Calls for Radical Transparency
Price Point and Carrier Savings Shouldn’t Be the Key Criteria
Business integrity and transparency have been making headlines in 2017 for a very good reason. Consumers today make the effort to do their research on companies and products before choosing to do business with them, and this trend is true for most industries. In transportation, transparency has taken somewhat of a backseat, at least when it comes to third-party logistics providers (3PLs) and the companies that partner with them. When executives and other logistics professionals seek a 3PL to help manage their supply chain, oftentimes the single and most important requirement is price point or carrier savings.
What this requirement ignores, however, is the level of true transparency that a prospective 3PL will provide once a partnership is made. Full supply chain visibility – something measured in the form of data, KPIs, reports and comprehensive operational insights – is a rarity among third-party solutions. This knowledge gap must be filled, but it requires real effort on the part of 3PLs to better connect carriers, shippers, and the internal logistics teams of their clients. Radical transparency means diving deep into each of these links to expose recurring problems and increase efficiencies throughout the entire system.
Without this radical push toward visibility, business growth will suffer for many companies in 2017 and beyond. But what exactly does this seemingly drastic change entail?
The New Responsibilities of a Modern Third-Party Partner
Underachieving 3PL players make it difficult for transparent providers to stand out among their competitors; it can be challenging to convince buyers that surface-level cost savings are often secondary to gains made in other areas of a business’s transportation operation. What a true logistics solutions provider brings to the table is improved customer service, enhanced tracking capabilities, continuous data collection and reporting, documented carrier accountability and more. But at the foundation of each advantage lies proactive problem solving made possible by the use of advanced transportation management system (TMS) technology.
The average 3PL positions recurring issues as out of their control when, in reality, it is the provider’s job to go the extra mile to track down and inform clients of problems such as carrier errors, faulty reporting, inconsistent data and mishandled claims. But the proactive approach that these hands-on 3PLs practice lays the groundwork for a cooperative resolution. It is up to their clients, the leaders of smart businesses and supply chains, to recognize each developing issue that is reported and work to create strategies to solve them. A fully managed 3PL partner reports broken links in the supply chain, but a client’s internal departments are tasked with fixing the biggest damages and maintaining the systems that will prevent future breakage.
The Technology That Facilitates True Supply Chain Visibility
The technology of today has allowed many advances in the way we manage transportation operations, but there still exist management systems that don’t possess all the capabilities modern software should provide its users. The multi-mode TMS offers access to just that: various modules that aid in shipment routing and order rating, load execution and tracking, settlement processes and reporting, auditing and payments and many other beneficial functions. It’s clear that without these technical utilities, a TMS can hardly call itself modern. Yet typical TMS products don’t always deliver on each of these core offerings or assemble a package suited to a business’s specific needs and objectives.
Two of the biggest selling points of a successful TMS are user experience (or UX) and 3PL partner support. UX not only contributes to straightforward ease of use, but also influences the initial set up and training processes, making these shorter in length and smoother in implementation. A multifaceted but easy to use system means team members and new hires can be quickly trained on the platform so they can get to work using an invaluable tool. The TMS provider, a 3PL team, should also be prepared to deliver clients unparalleled support. Possessing the key integration of technology and expertise is what makes a 3PL both trustworthy and contemporary.
The Failures of Old Out-of-the-Box Solutions
To put it plainly, “out-of-the-box” solutions may be simple, but in terms of options available, they’re just simplistic. Like in other fields, customization is key when it comes to transportation management, especially because businesses that take advantage of TMS software differ in industry and their approach to product coding and financial processes. This is why TMS products claiming to be out-of-the-box are not full solutions to supply chain management. In order to gain the highest level of transparency, companies should look for a fully managed third-party partner that brings with it a customizable, modular software program.
Investing in this integrated partnership will help you clean up your supply chain and reduce spend company-wide, allowing you to move money elsewhere, grow your reach and increase your competitive stance. Full optimization is possible, but only with data that offers insight into formulating corrective action plans and a knowledgeable strategic partner with proven supply chain experience. When this feat is attainable, why would any company choose to work with a 3PL that isn’t dedicated to contributing to the growth of your business?
The Total Solution
The modern 3PL can no longer afford to tout surface-level cost savings as its primary selling point. Today’s informed executive is searching for something else entirely and is not easily fooled by big name players that continuously ignore customer demands. Executives require effective IT methods for tracking shipments and managing transportation budgets, but a 3PL should supply all of this and more, serving as an extension of clients’ internal teams. Everything a successful 3PL does is driven by communication and well-maintained relationships. If a business is not already structured around or prepared for high levels of supply chain transparency, then it’s time to introduce radical change in the way its entire logistics operation is managed. 2017 is the time for this change – so put your business on the path to success today with the new, modern 3PL.
Scott McDevitt is president and CEO of Translogistics, Inc. He began his career in the transportation industry working with Roadway Express in 1988. Scott brings operations and sales experience to Translogistics and has received numerous awards for his dedication and strong customer relationships.
Need a Logistics Provider?
Compare over 100 Instantly
Businesses: Embrace AI or Face Extinction