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Time To Dust The Vault And Revive Those Forgotten Logistics Ideas

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Time To Dust The Vault And Revive Those Forgotten Logistics Ideas

Things are slowing down in the 3PL industry, with a 4.7% shipment decline during the last fourth quarter. Asparuh Koev, CEO of Transmetrics, an AI logistics platform, sees this as a green light for polishing the dust off those company visions that got put on the bottom of the pile.

Read also: Why Now is an Excellent Time to Switch to Sustainable Logistics Practice

A glut of trucks and stubbornly weak freight markets have been crippling third-party logistics (3PLs) companies for the past two years. These conditions are squeezing margins and putting a serious strain on their financial health.

With 2024 looking like a slow-to-steady year for shipping demand, smart investments are what 3PLs need to take back control of their market. Getting closer to customers with strategically located warehouses, customizable solutions, and dynamic pricing techniques are some approaches to consider. 

Looking beyond traditional solutions, your logistics business can regain its unique proposition, navigating periods of excess capacity and emerging stronger.

Micro-Warehousing and Strategic Partnerships

Some 67% of surveyed customers encountered delivery problems already this year. Strategically located facilities offer a handy alternative to large distribution centers and make for agile retail supply chains.

Micro-fulfillment centers or smaller-scale storage facilities are often positioned in urban areas, bringing inventory closer to the end consumer, and reducing the delay and costs that come with heavy traffic congestion and limited parking. This last-mile optimization strategy is particularly useful for fast-moving items, or popular products, ensuring they are readily available for quick dispatch. The trick is to have advanced inventory algorithms that prioritize high-demand items and logistics planning tools to calculate storage recommendations that can maximize smaller spaces.

Popular supermarket chain Walmart, for example, partnered with three technology companies to open micro-fulfillment centers inside select Walmart stores in the US, and we are seeing a similar strategy for Germany’s largest grocery discounter, Netto. The Edeka Group company joined forces with automated solutions provider, Cimcorp, to help optimize Netto’s processes for shorter lead times and more precise order fulfillment.

Teaming up with logistics providers or co-locating with other retailers in shared warehouses can also improve efficiency by reducing costs and streamlining fulfillment processes.

Value-Added Services (VAS) Expansion

How many times have customers bought products and decided they don’t want them anymore? Twenty-three percent of shoppers admit to “wardrobing” — buying items with the intention of returning them.

Reverse logistics is all about getting that product back from customers and figuring out what to do with it in the best way possible. This could mean sending it to a store, a warehouse, a repair center, or even back to the manufacturer. The main goal is to either get some money back from the product by selling it again or get rid of it cheaply and sustainably through recycling.

While it might not be the trucker’s fault a customer received the wrong order or the product didn’t meet the customer’s standards, 3PLs can help businesses dispose of unwanted or defective products responsibly. Providing this additional value is a great way to maximize excessive capacity and take the burden off retailer clients. By streamlining communications between retailers, warehouses, manufacturers, recyclers, and end customers — with transparent information on warranties and service returns accessible — 3PLs can offer reliable reverse logistics.

Estimated at $8.8 trillion in 2024, the e-commerce market size is large and it’s growing; at a CAGR of 15.8% between 2024 and 2029. However, business expansion across multiple independent online stores requires solid inventory management control. Forecasting tools and warehouse management systems (WMS) that integrate with e-commerce platforms can provide real-time visibility into inventory and order fulfillment to manage stock across multiple warehouses. 

Data-Driven Dynamic Pricing

Traditional fixed pricing can leave 3PL warehouses empty during slow seasons and overflowing during peak times. However, by adjusting prices based on real-time factors like demand and capacity, 3PLs can maximize profits and better serve customers.

3PL companies can adjust their strategies to market fluctuations, differentiating rates for services depending on their current demand, warehouse space, level of difficulty, or load-to-truck ratio. You may use the delivery date to determine the final rate, putting a dynamic markup based on timeliness and your current workload.

To implement dynamic pricing successfully, 3PLs need good data. Real-time visibility into an organization’s entire supply chain enables businesses to enhance decision-making and pivot to maintain a competitive edge. Analyzing historical trends alongside real-time data and market conditions allows you to swiftly identify and address upcoming peaks or slows in demand or storage space. Clear communication with clients and investment in flexible technology is also crucial. This way, 3PLs can understand client needs, adapt to market changes, optimize resources, and become more competitive in the logistics industry.

With a surplus of empty trucks and a slow-to-steady year for shipping demand on the horizon, 3PLs need to get creative to regain control. The key lies in getting closer to customers. Strategically located warehouses can mean faster deliveries and happier clients. 3PLs can bring in new customers with customizable logistics solutions making you a more attractive partner while keeping profit margins balanced with flexible rates based on demand. By thinking outside the box and adopting these strategies, 3PLs can not only weather the current market conditions but emerge as stronger competitors in the logistics industry.

Author bio

Asparuh Koev has worked in the transport and logistics sector for more than two decades. Over the years, he has established several companies including Sciant, an engineering services company later acquired by VMWare, and IntelliCo Solutions, which delivers IT digitization for the transport industry. Koev co-founded Transmetrics in 2013 and, as CEO, he combines IT and domain expertise to grow a company that is bringing truly cutting-edge technologies to the sector.

supply wms global trade WMS global trade warehouse

Unleashing the Power of WMS for 3PLs: A Gateway to Competitive Advantage

In the fiercely competitive world of third-party logistics (3PL), success hinges on the ability to swiftly onboard new customers, optimize operations, and drive revenue growth. With the market constantly evolving, 3PL providers are increasingly turning to advanced technological solutions to gain a competitive edge. Among these solutions, Warehouse Management Systems (WMS) emerge as a cornerstone in empowering 3PLs to excel in today’s fast-paced environment while strategically positioning themselves for future success. 

For 3PLs, the journey begins with their sales teams actively pursuing new customers to fuel revenue growth. However, the real challenge lies in efficiently onboarding these customers and seamlessly integrating them into the logistics ecosystem. A robust WMS serves as a linchpin in this process, enabling 3PLs to optimize their operational model and rapidly onboard new clients in as little as 30 days. By providing setup wizards and copy/paste capabilities, a 3PL-focused WMS simplifies and accelerates the onboarding process, enabling 3PLs to scale their operations more efficiently. In addition, by tactically managing the pick, pack, and ship processes, WMS streamlines product flow both into and out of warehouse facilities, laying the groundwork for further enhanced efficiency and customer satisfaction. By automating and optimizing these critical tasks, WMS helps 3PLs streamline their operations while reducing errors. This leads to increased revenue generation by enabling 3PLs to process orders more quickly and accurately while enhancing operations.

Moreover, the agility and flexibility inherent in modern WMS solutions play a pivotal role in accommodating the diverse needs and process requirements of individual customers with multiple levels of configuration and ability to support multiple individual rule sets and workflows in a single facility. With the ability to adapt to unique capabilities and preferences, WMS empowers 3PLs to deliver tailored solutions that meet the evolving demands of their clients. Whether it’s managing multiple business units within a single facility or catering to customers across various regions, WMS provides the scalability and versatility needed to meet business goals and drive success. 

The transition to a cloud-based WMS architecture brings unparalleled advantages for 3PLs, particularly in terms of scalability and technological agility. In an industry characterized by seasonal peaks and fluctuations in demand, cloud-based WMS solutions offer the flexibility to scale resources dynamically, ensuring optimal performance during peak periods. By offloading concerns about technology infrastructure and scalability, 3PLs can focus on maximizing labor efficiency and delivering exceptional service to their customers.

Advanced features such as flexible billing engines also help 3PLs adapt to evolving customer needs and services, eliminating revenue leakage and maximizing profitability. Experienced 3PLs know it’s important to partner with a WMS provider that has extensive billing knowledge and capabilities. Highly granular, configurable capabilities that capture all billable activities as well as supporting broad contract terms is crucial. 

Furthermore, WMS solutions provide invaluable insights and visibility into warehouse operations, allowing 3PL providers to make data-driven decisions and continuously improve performance. By offering real-time visibility into inventory levels, order statuses, and operational metrics, WMS enables 3PLs to identify inefficiencies, streamline processes, and enhance overall productivity. When combining a Distributed Order Management (DOM) approach to intelligent sourcing, this proactive approach not only drives cost savings but also ensures that 3PL providers can deliver superior service and value to their clients.

The strategic adoption of WMS empowers 3PLs to thrive in an increasingly competitive market landscape. WMS represents more than just a tool for operational optimization – it’s a gateway to competitive advantage for 3PLs. As the logistics landscape continues to evolve, the adoption of advanced WMS solutions will be instrumental in shaping the success and sustainability of 3PL operations, enabling them to stay ahead of the curve by achieving sustainable growth and profitability. 

Author Bio

Jack O’Malley is Vice President of Account Management for Softeon, a WMS provider focused exclusively on optimizing warehouse and fulfillment operations. For over two decades now, we have been helping our customers succeed. Investing in R&D enables us to develop software to solve the most complex warehouse challenges. Softeon is laser-focused on customer results, with a 100% track record of deployment success. We believe warehouse leaders shouldn’t have to settle for a one size fits all approach to technology. For more information, please visit www.Softeon.com.

Shipping 3pl

The 4 Pillars of a Successful 3PL Partnership

Managing a supply chain is a full-time job. Without consistent oversight, your supply chain process could easily end up with excessive levels of inventory, delays in shipping or transportation, and all sorts of inefficiencies. In today’s convenience-obsessed economy, companies cannot afford to let supply chain issues go unnoticed or unresolved.

That’s why I believe an increasing number of business leaders are choosing to outsource logistics to a third-party logistics provider (3PL). 3PLs offer an array of essential supply chain management services, such as warehousing, transportation, order fulfillment, and inventory management. Think about it: did you decide to start your business so you could spend your days chasing down deliveries, both incoming and outgoing? Outsourcing logistics enables you to focus on the tasks you truly enjoy, like building a distinctive brand identity, growing your operation, and better understanding your customers’ needs.

Now that outsourcing logistics has become more commonplace, more 3PLs are popping up left and right. This can make it difficult to find the right partner for your business.

Track record and reputation 

One of the most important factors to consider when choosing a 3PL is your potential partner’s reputation. This isn’t one of those situations when there are advantages to partnering with a younger business with fewer customers. When it comes to a responsibility as crucial as logistics, it’s imperative to choose a 3PL that has a strong track record and can produce good references from numerous satisfied customers. 

You also want to find a 3PL who has experience working with companies in your industry. Every industry has its own challenges and regulations, and a 3PL that has worked with other companies like yours will be familiar with these challenges and regulations and know exactly how to navigate them. 

To that end, a 3PL with more experience is also more likely to have a larger network of partners. In the likely event of a supply chain disruption, a 3PL with more partners to count on can keep your supply chain running until the issue is resolved. In fact, you can get an even better idea of a 3PL’s reputation by reviewing references from vendors, carriers, and employees, not just customers.

Customization and flexibility 

Again, every industry has its own specific characteristics, and you want to partner with a 3PL that understands what makes your industry distinct. And due to the notorious complexity of supply chains, it’s important that 3PLs consistently adapt their services to meet the needs of each individual customer. A good 3PL will possess the resources to accommodate specific challenges of your business, such as unforeseen spikes in demand, or the need to maintain a certain level of inventory for a certain item throughout the year.

With this in mind, it’s also important to consider how your needs will change as seasons progress. Will there be times when you require additional services that you don’t need at this particular moment? Will the extent of your needs for each service change significantly? For example, at certain times of year, you may eventually require more storage space, or you may need to ship your items to further geographical distances. Your new logistics partner must be able to quickly scale up and meet these needs at any given time.

Finances and technology

Lots of 3PLs might say they are well-positioned for the future. Only some, however, will be able to prove it. When speaking with potential partners, be sure to determine whether the 3PL is in good financial shape and has made the necessary investments to succeed in the logistics industry of 2023. For example, if the 3PL has been able to consistently add new customers, has it simultaneously been making key investments in infrastructure and staff?

Another way to tell if a 3PL is ready for the future is the prevalence of advanced technology in its services. Does the 3PL consistently harness the latest transportation management systems, warehouse management systems, and freight forwarding software to improve efficiency and profitability for its customers? To what extent has the 3PL automated its fulfillment processes? A good 3PL should be able to rattle off all sorts of different ways it has stayed up to date with the latest developments in this ever-changing industry.

Customer service protocols

A reputable 3PL will have many customers, but that shouldn’t stop them from giving the same amount of attention to every single one. This is only possible if each customer has a designated point of contact who is fully prepared to field questions or concerns at any given time. 

As you’re well-aware, supply chains tend to become disrupted at the most inconvenient moments, and every minute that goes by could cause more orders to be delayed. For this reason, your new partner should have someone who will always be available to respond to communications and work with you to resolve sudden issues.

As you’re speaking with potential partners, ask them how they typically handle supply chain disruptions, and how you would contact them for support. A 3PL that understands the importance of customer service will have protocols in place for resolving different types of issues such as delivery errors or product recalls. It’s the 3PL’s job to help you maximize efficiency and profitability, so the last thing they should do is put you in a situation where you’re wasting time and money.

Final thoughts

Choosing the right 3PL comes down to determining whether a potential partner possesses the resources to simplify your business’s logistics-related challenges while also meeting the changing standards of the logistics industry. Once those boxes are checked, it’s just about getting the impression that the 3PL is ready to treat this new partnership as a top priority and can truly help you succeed.

 

locus last-mile delivery locus report

Locus Unveils ‘ShipFlex’ To Equip Businesses With Flexible & Intelligent Third-Party Delivery

ShipFlex brings same-day & next-day delivery to enterprises through a simple integration, helping them optimize third-party delivery from order to doorstep.

Locus, a global last-mile logistics technology company, announced the launch of ShipFlex, a third-party delivery platform that provides businesses with the flexibility to fully outsource their deliveries to a wide range of delivery carriers. ShipFlex helps businesses expand their reach and achieve break-neck delivery speeds, enabling them to offer same-day and next-day delivery capabilities in new geographies.

Inefficient carrier selection, capacity management, lack of real-time order visibility, etc., are some barriers that can hamper a business’s ability to make quick deliveries. Locus ShipFlex addresses these complexities by automating entire carrier workflows for the optimal price and delivering end-to-end visibility of order-to-doorstep deliveries across in-house, contracted, and outsourced fleets on a single dashboard. The platform also gives businesses access to Locus’ global carrier partners, such as FedEx, RPX Logistics, Loomis Express, Shadowfax, SPL, etc., helping them with their delivery orchestration in a much more efficient and cost-effective manner.

Retail businesses like Lulu Group International are adopting Locus ShipFlex to achieve a competitive edge. Here’s what they have to say:

By deploying ShipFlex, businesses can also:

  • Reach customers on-demand with hyper-local delivery: Same-day or next-day delivery can be offered to customers in the local area, providing an unparalleled customer experience.

  • Maintain a branded experience with third-party carriers: Businesses can share customizable end customer-facing tracking pages while maintaining a consistent visibility and delivery experience through 3PLs.

  • Enhanced post-purchase experience: Visibility is ensured at every step for dispatch managers and customers alike. ShipFlex allows the automation of SMS and email alerts to notify dispatch teams and customers of SLA breaches in real-time, delivering a positive customer experience.

About Locus

Locus is a leading-edge technology company solving one of the most challenging global supply chain problems: Last-Mile logistics. Locus’ order-to-delivery dispatch management software helps enterprises transform their Last-Mile logistics operations from cost centers to revenue generators through advanced optimization algorithms and intuitive workflow automation that equip businesses with the tools needed to maximize efficiency while delighting customers.

Founded in 2015 and backed by GIC Singapore, Tiger Global, Qualcomm Ventures, and Falcon Edge, Locus has helped a wide range of customers globally across industries – including Unilever, Nestle, Bukalapak, The Tata Group, BlueDart, etc. – execute 850 million deliveries across 30+ countries across North America, Europe, Southeast Asia, the Middle East, ANZ, and the Indian subcontinent. Its technology has also helped save $275 million in transit costs, offsetting 10 million kilograms in CO2 emissions while maintaining 99.5% SLA adherence ratio.

ROI 3PL distribution chargers made4net “largely making compromises between the way a warehouse wants to work and the way the system allows the warehouse to work,” logistics gather business

Automation Strategies That Improve 3PL Warehouse Management

3PL warehouse management can be optimized like never before with the help of an effective automation strategy. Warehousing and logistics professionals are familiar with many leading automation technologies but may be unsure how to implement them in their facilities. Managers can use a few key strategies to craft a plan that will help tackle today’s biggest challenges. 

Data-Driven 3PL Warehouse Management

Data-driven automation is one of the most valuable automation strategies for 3PL warehouse management. Data is the key to developing a successful strategy tailored to a specific 3PL business’s needs. Collecting and analyzing information can reveal insights about 3PLs’ operations that hint at the best opportunities for automation. 

It can be helpful for 3PLs to conduct comprehensive data collection on their operations before investing in automation technologies. IoT devices can be a highly effective tool for this, with the benefit of potentially being integrated into automation systems. Analytics software is also helpful for compiling and analyzing all the information collected. 

Regardless of the tools 3PLs use, data collection should be a priority early in an automation process. A wealth of information on a 3PL’s operations can help establish a road map and indicate clear goals for new technologies. 

For example, tracking how many packages are moving through each stage of the picking and packing process allows warehouse managers to discover bottlenecks. This could be due to the organization of the warehouse, the needs of a specific product category, a lack of adequate staff or any number of factors. Automation is often the solution, and data is the key to discovering these challenges. 

Remember Back Office Automation

Robots are often the first thing that comes to mind when people think of automation. However, 3PL warehouse management can benefit extensively from back-office automation, including robotic process and logistics tools. In fact, intelligent automation behind the scenes can result in a 97% reduction in hours spent on back-office tasks and a 50% reduction in invoicing and processing costs. 

A 3PL warehouse management system is often a great place to start. This is a software program that streamlines and automates operations. It integrates real-time data from the warehouse and automates inventory tracking, employee scheduling, invoice management and other day-to-day tasks. 

Logistics software and digital twins complement a warehouse management system in 3PL automation strategies. These tools can make a monumental difference in planning and executing operations.

Logistics simulations and digital twins allow 3PLs to test automation strategies without disrupting operations in the physical warehouse. They can fine-tune facility layouts and routes for order-picking robots to be as well-optimized as possible before deploying them in the real world. Logistics simulations and digital twins can also help discover inefficiencies and bottlenecks that may present valuable opportunities for automation. 

Additionally, 3PL warehouse management can benefit from robotic process automation, which involves using software or programs to automate tasks. This is similar to the automation features available in many warehouse management systems. RPA doesn’t have to involve physical robots, either. It is simply about delegating monotonous, repetitive tasks to software programs, freeing time for more important tasks. 

Integrating Physical Automation Tools

3PL warehouse management can also benefit from physical automation tools, such as robots, RFID tags and sensors. These physical automation tools can be particularly useful for tackling one of the biggest challenges facing 3PL warehouse management today: labor shortages. 

Surveys indicate that 73% of warehouse operators are struggling to find enough staff to keep up with demand. The e-commerce boom is great for business, but it is also making efficiency, optimization and staffing major challenges for managers. 

Robots are often the key to bridging the labor gap in 3PL warehouses. Managers must take the time to ensure they choose the right type of robots and focus on only one or two at a time. It can be helpful to have a specific goal, such as a bottleneck the machines could help resolve. 

Integrating physical automation tools like robots into a warehouse requires careful planning and training to ensure employees understand how to work with them. Logistics simulations and digital twins can help organize the routes autonomous warehouse robots navigate. A well-coordinated robotics strategy can result in more streamlined management and efficient operations. 

However, robots aren’t the only 3PL warehouse management automation tool worth considering. Inventory monitoring is a big part of managing any facility. IoT sensors, RFID tags and management software can automate the process of monitoring and tracking inventory levels. 

For example, IoT sensors can monitor perishable or sensitive inventory and send alerts if something goes bad. Digital tags, such as IoT devices or RFID tags, can simplify inventory management by moving it to digital channels where tasks can be automated. For instance, an inventory management program can automatically send out a restock notification if a certain product falls below a set threshold. 

3PL Warehouse Management With Smart Automation

Smart automation strategies make 3PL warehouse management easier, efficient and effective. These tools can help free up time, money and resources behind the scenes and on the warehouse floor. A data-driven approach to automation can ensure managers have the insights they need to start their strategy strong and continuously improve it over time.

 

locus last-mile delivery locus report

Big and Bulky Last-Mile Delivery in the United States Continues to be a High-Growth 3PL Segment

Armstrong & Associates, Inc. (A&A), an internationally recognized leader for third-party logistics market information and consulting, releases its latest market research report “Making it Count: Big and Bulky Last-Mile Delivery in the United States”. The National Home Delivery Association (NHDA) and A&A partnered for this study covering the Third-Party Logistics (3PL) Big and Bulky U.S. Last-Mile Delivery Market segment to identify current market size, historical growth and outlook, key providers, customers and verticals served, e-commerce’s role, employment, and other trends. This report details and compares the use of independent contractors versus employee drivers, customer and revenue trends by vertical industry, and the growing use of freight brokerage to source last-mile carrier capacity.

The 3PLs analyzed had last-mile delivery revenues from $7 million to $1 billion and represent approximately 40% of the estimated $9.3 billion U.S. Third-Party Logistics Big and Bulky Last-Mile Delivery Market. A&A estimates the U.S. 3PL Big and Bulky Last-Mile Delivery Market experienced a compound annual growth rate (CAGR) of 18.2% from 2017 through 2021 and will have a CAGR of 11.8% from 2022 through 2025. These projections make Big and Bulky Last-Mile Delivery one of the fastest-growing 3PL segments over the next three years.

In this report, last-mile delivery is defined as the transportation of big and bulky shipments (not parcels) from an origin to a destination within the United States where they will be used or consumed. These can be business-to-business (B2B) or business-to-consumer (B2C) shipments. Typically, last-mile e-commerce orders are shipped as small packages and transported by parcel carriers. However, with expanding e-commerce product categories such as furniture and appliances, other last-mile options are growing in significance. Third-party logistics providers with fleets of independent contractors and freight brokerage operations deliver many last-mile orders. In addition, Less-than-Truckload (LTL), Last-Mile, Household Goods, and Truckload (TL) carriers are expanding last-mile services for big and bulky items to accommodate the rapid growth in e-commerce retail sales.

The final transportation leg for an e-commerce order—the last mile—may be short, but it can also be extremely costly. Transportation costs for a shipment from a distribution center or fulfillment center to a customer’s doorstep can account for 30%–40% of the total cost of transportation. Last-mile provider revenue per shipment is low by traditional LTL standards and averages less than $90 per shipment. Total shipment revenue varies depending upon the value-added services performed at the time of delivery. A whole bedroom delivery and setup can generate $250 while a less service-intensive shipment may only generate $50.

For more information on this report, “Making it Count: Big and Bulky Last-Mile Delivery in the United States” and other market research, please visit:

ABOUT ARMSTRONG & ASSOCIATES, INC.

Armstrong & Associates, Inc. (A&A) was established in 1980 to meet the needs of a newly deregulated domestic transportation market. Since then, through its leading Third-Party Logistics (3PL) market research and history of helping companies outsource logistics functions, A&A has become an internationally recognized key resource for 3PL market information and consulting.

A&A’s mission is to have leading proprietary supply chain knowledge and market research not available anywhere else. As proof of our continued work in supporting our mission, A&A’s 3PL market research is frequently cited in media articles, publications, and securities filings by publicly traded 3PLs. In addition, A&A’s email newsletter currently has over 88,000 subscribers globally.

A&A’s market research complements its consulting activities by providing continually updated data for analysis. Based upon its unsurpassed knowledge of the 3PL market and the operations of leading 3PLs, A&A has provided strategic planning consulting services to over 40 3PLs, supported 24 closed investment transactions, and provided advice to numerous companies looking to benchmark existing 3PL operations or outsource logistics functions.

ABOUT THE NATIONAL HOME DELIVERY ASSOCIATION (NHDA)

In 2013 ten of the leading home delivery companies specializing in the “white glove” delivery of appliances, furniture and large electronics to homes came together to address common interests. These ten firms founded the National Home Delivery Association with a shared commitment to enhancing the industry through training, setting standards for customer service and enhancing the profile of this vital segment of America’s retail economy. The NHDA has grown to over 70 member companies representing the leading companies in this segment of the logistics industry. Collectively, NHDA members account for over 70% of residential “bulky goods” deliveries and setups, utilizing thousands of delivery teams and logistics professionals across the country.

The National Home Delivery Association (NHDA) is committed to advancing the interests of individuals, companies, and organizations that deliver furniture, appliances, and electronics to the home by promoting the highest standards of professionalism and customer service. It can be found online at:

https://www.nationalhomedeliveryassociation.com.

GO 4PL AND CONQUER: Software Empower 3PLS TO GROW BY CREATING AND MANAGING 4PL NETWORKS

GO 4PL AND CONQUER: Software Empower 3PLS to Grow by Creating and Managing 4PL Networks

Time was when a third-party logistics (3PL) company was looking to build a sophisticated fourth-party logistics network, massive funding had to be raised to pay for the costly software development associated with 4PL models.

That all changed this past July when Extensiv—which delivers omnichannel software solutions for warehouse inventory and order management—unveiled Extensiv Network Manager.

This product allows even 3PLs with limited technical capabilities to build and operate a software-enabled fulfillment network to compete with the likes of Ship Bob and Deliverr. Additionally, unlike home grown software solutions, Extensiv Network Manager is a cloud-based, fully productized and supported product that continues to be developed and enhanced. 

“Extensiv Network Manager leverages the company’s deep experience working with 3PLs and its industry-leading 3PL warehouse operations platform to offer sophisticated fulfillment capabilities while continuing to operate their warehouses using 3PL Warehouse Manager,” explains David Miller, vice president of strategy at Extensiv.

“Consumer expectations are at an all-time high,” he continues. “Inflation has only increased the need to keep shipping costs down, but consumers still expect fast, and often next-day, delivery. Single or even two warehouse fulfillment approaches force brands to choose between paying exorbitant prices for unprofitable expedited shipping or choosing low-cost saver services, which results in painfully slow delivery times.” 

But Extensiv Network Manager helps 3PL providers build and manage networks of geographically distributed partner warehouses, where a brand’s inventory is distributed across and shipped from multiple locations, enabling lower costs and expedited delivery options while retaining customer relationships and reducing risk and capital overhead.  

How? By combining software, services, tools, and relationships that empower any 3PL, even those operating out of a single warehouse, to partner closely with other 3PLs to service brands across multiple geographically distributed warehouses. Unlike current homegrown solutions that 3PLs may have cobbled together, Extensiv Network Manager offers the key capabilities necessary to build and operate a hybrid network, including sophisticated order routing rules as well as complete visibility and control over all orders regardless of which node is shipping them.  

 Early adopters have seen positive results already, with one customer, Rocket Shippers, using Extensiv Network Manager to lower shipping costs while decreasing transit times by intelligently routing orders to the best-fit fulfillment center in their network.  

“The Network Manager team did an amazing job streamlining our order routing rules,” says Matthew Schneider, senior account manager at Rocket Shippers. “Network Manager has made it so much easier to process Seller Fulfilled Prime orders in our network as well as providing inventory visibility across multiple facilities.”  

SOLVING PROBLEMS FOR 3PLS AND BRANDS 

As a brand’s expectations of their fulfillment partners grow, 3PLs need a low-risk, low-cost option to bring customers distributed inventory and omnichannel fulfillment services while retaining direct relationships with these brands. Space restrictions, start-up costs, risk volatility, and other considerations keep smaller 3PLs from expanding into new facilities, thus limiting their ability to service growing brands and making their offering less competitive. 

 Many brands have tried to build their own multi-3PL fulfillment strategies to offer faster or less expensive delivery. In the modern technology-enabled supply chain, brands require the consistency of service that can only be delivered by operating on a standard technology platform with an identical configuration and shipping strategy across every node. In today’s era of heightened consumer expectations, brands need to efficiently support not just ecommerce deliveries, but omnichannel fulfillment. Extensiv Network Manager helps 3PLs deliver on these rising expectations. 

 Operating a reliable network of partner 3PL warehouses, the technology works together to expand geographic reach, increase service offerings, and improve SLAs while reducing overall operating expenses for themselves and their customers. 3PLs utilize Extensiv Network Manager for: 

  • Complete visibility: Inventory and transaction details are visible across all networked warehouses in a single, dedicated management portal. This eliminates duplicate entry and the confusion of multiple logins and systems. 
  • Order Routing: Logic-based order routing and management tools automatically send orders to the best fulfillment center in the network based upon virtually unlimited business rules; seamless order flows from cart to the 3PL warehouse manager (WMS) and back without duplicate setups or convoluted tagging, with real-time order processing status across all servicing facilities. 
  • Seamless inventory management: a holistic view of inventory levels across network warehouses. Manage inventory throughout your network by seeing real-time levels and alerts. 
  • Simplified setup and maintenance: configurable cloud-based software eliminates complexity and can be set up with minimal time and effort. Add new fulfillment nodes with only a few clicks to start fulfilling across the network.  

To complement Extensiv Network Manager’s software capabilities, Extensiv also launched an array of services to guide 3PLs through the process of setting up a collaborative 4PL network. These services range from needs analysis, collaboration on partner identification based upon geography or service offering, as well as implementation services to initially configure the fulfillment network.   

Extensiv Network Manager builds on the recently launched Extensiv Fulfillment Marketplace, a free resource that empowers 3PLs to identify potential network partners that offer a complementary geographic footprint and/or services. 

To learn more about Extensiv Network Manager, go to extensiv.com/extensiv-network-manager, and to find 3PL partners and build your network, visit extensiv.com/fulfillment-marketplace. 

Based in El Segundo and formerly known as 3PL Central, Extensiv is regarded as a visionary technology leader focused on creating the future of omnichannel fulfillment. The company partners with warehouse professionals and entrepreneurial brands to transform their fulfillment operations in the radically changing world of commerce and consumer expectations. More than 25,000 logistics professionals and thousands of brands trust Extensiv every day to drive commerce at the pace that modern consumers expect.

 

demand

KEY COMPONENTS TO KEEP UP WITH SKYROCKETING BUSY SEASON DEMAND

Inventory management horror stories that clog newsfeeds make one feel that The Grinch is now running supply chain, not Santa. According to market researcher International Data Corp. (IDC), the supply shock that started in China early in 2020, and the demand shock that followed it as large swaths of the global economy shut down, exposed vulnerabilities as well as resiliencies in supply chains around the world. Retailers, the research firm finds, faced supply and demand disruptions, navigating inventory held up in factories, global lockdowns, evolving trade policies and surges related to hoarding behaviors for essential items such as toilet paper. 

IDC’s report on the implication of COVID-19 for the future of the retail notes that retailers were confronted with accelerating e-commerce sales and rising demand for safe shopping, transparency and omnichannel fulfillment. And they faced massive economic shifts resulting from high unemployment and shifting shopping patterns, including the massive losses in shopping resulting not just from changes in everyday habits but also from decreased travel activity.

The crunch showed once again that to meet customer demands and stay competitive in a world where expectations for product availability and delivery speed continue to rise, every link along the supply chain must operate efficiently. From warehouse management to order fulfillment to juggling multiple channels, there are often countless points in a single product’s journey where eliminating errors and delays could mean increasing profit and optimizing the customer experience. 

“While it’s painful for grocery retailers to order products from hundreds of discrete suppliers, it’s also painful for the suppliers to receive orders and payments from hundreds of retailers that are not communicating by digital means,” says Robert Pinkerton, CTO of Vori, a technology platform and digital marketplace for retailers. “They’re sending emails and faxes, calling the order desk, texting sales reps. … the list goes on and on.”

Here are just a few ways businesses can use the right solutions to quickly adapt to changing demand this season: 

Inventory Visibility

One of the fundamental ways to ensure this happens is to improve inventory visibility: the ability to see the status of every SKU across all locations (warehouses, stores, suppliers and third-party providers) in real time. The key to having full inventory visibility is to leverage a supply chain network connecting all stakeholders. 

Having accurate inventory insight isn’t just great for your customers and trading partners; it’s also beneficial for overworked and overstressed teams. Manually tracking inventory is a mundane way to use employee time and detracts from their ability to build better customer and partner relationships. Plus, it can result in out-of-date information that makes decision makers’  jobs more difficult.

Real-Time Information

When both suppliers and retailers have real-time inventory data at their fingertips, they eliminate common time and cost efficiency drains. By integrating and automating inventory information, businesses get a leg up on improving internal processes. That’s because real-time inventory data is immediately actionable and helps to make better decisions, allocate product optimally and streamline transactions with your supply chain partners.  

For e-commerce businesses, knowing their inventory levels makes it possible to sell across multiple channels, while giving customers accurate availability information. Instead of frustrated customers, e-merchants create satisfied ones. 

Better Forecasting

Stockouts are customer loyalty killers and having better inventory visibility helps merchants avoid them. Modern inventory management platforms help by using historical data to better predict how much product is needed where and at what point in your business cycle. Using current data in real-time makes it possible to maintain healthier, more balanced inventory levels in all the places where the goods need to be. 

Full data trove control helps create timely, smarter replenishment strategies and better respond to volatile demand hikes—without devolving into chaos. 

Reduced Costs

Many supply chain players are leveraging powerful technology solutions to better manage order processing, warehouse management and fulfillment. But many others still use separate, siloed solutions that don’t provide enough visibility. Unified commerce solves this problem by bringing omnichannel operations together using integrated technology.

Comprehensive visibility relies upon a central “inventory hub” that acts as the aggregator of inventory information across the extended enterprise–products in the warehouse or in transit to it, at a third-party logistics provider (3PL), in a returns facility and even in the finished goods warehouse of a supplier. 

Ideally, such a hub should also include inventory positions and movement within each retail location. This gives businesses the advantage of up-to-the-minute product availability so that features such as available-to-promise (ATP) can help suppliers allocate products in short supply, providing valuable fulfillment transparency for partners.

Another tool to improve retail partners’ supply chain visibility is called vendor-managed inventory. A modern VMI platform offers insight into stock levels at retail partner locations and establishes automatic reordering thresholds, so products arrive just in time. This keeps warehouses lean on both ends and improves the customer experience with fewer stockouts.

Advanced VMI features leverage your data to an even greater advantage. This is crucial in an environment where customers are choosing products that can be delivered the next day or even the same day.

An integrated e-commerce platform is another way to improve inventory visibility to everyone’s benefit. With online shopping on the rise, it is important to give customers accurate information about what is available. After all, no customer wants the experience of hitting “order,” and then receiving an “oops” email due to out-of-stocks. 

Ideally, the aforementioned “inventory hub” should be working in conjunction with an organization’s e-commerce system so digital buyers always see the correct availability. All of this results in minimizing the chance of an “oops” moment and helps the “order hub” or ERP system determine the most cost-effective location, time and shipping method to get the order filled. 

With an excellent ROI and measurable benefits for all parties involved— retailers, suppliers and customers —leveraging technology to increase your inventory IQ is a smart way to dethrone The Grinch and empower supply chain Santa yet again. 

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Haitham Ghadiry has been the vice president of Sales and Marketing at TrueCommerce, Inc. since joining in December 2009. Mr. Ghadiry oversees marketing communications, demand generation, new customer acquisition, install-base account management, professional services’ sales, sales enablement and indirect channel sales.

Prior to joining TrueCommerce, he served as director of Global Sales and Strategic Accounts for Trimble Navigations, Ltd., a publicly traded supplier of advanced location-based solutions, and director of North American Sales at Everest Software, a leading business management software provider. His extensive history of generating superior sales results and leading top performing teams will contribute to further propelling TrueCommerce into the market leadership position. Haitham graduated with a bachelor’s of science degree in Tourism and Hotel Management from Helwan University in Cairo, Egypt.

ESG

Driving America’s Businesses Forward with Proactive ESG Strategies at the Forefront

Entering the new millennium, few companies across all industries had a watchful eye toward environmental stewardship, particularly throughout the heavy-duty truck transportation industries. However, just a few short years later, governments in many countries began to better understand the benefits that could come from corporations curbing their carbon emissions output, and new greenhouse gas mandates began to take effect by the early 2000s.

Pioneering Insight for Industry Sustainability

In the early 2000s, the use of data analytics began to help fleet customers run their operations more efficiently. Fleet Advantage CEO, John Flynn, had a family relative who was receiving treatment for cancer caused by environmental pollutants, and Flynn realized the importance of leveraging resources to help companies with transportation fleets not only comply with the new environmental regulations but serve as model corporations regarding environmental stewardship.

Flynn understood the importance of being the future of truck leasing by advocating solutions that would significantly reduce emissions over time. By 2011, leading fleet consultants had begun to make strong recommendations against the use of older-model equipment because of toxic emissions. They introduced never-seen-before emissions scorecards, and an innovative replacement program with financial flexibility in mind that made it beneficial to operate newer, clean-diesel engines. These programs also helped fleets meet new GHG-1 Federal mandate standards and calculated fuel economy gains at 2.5% MPG and CO2 reductions.

A Focus on Environmental Stewardship

Between 2016 and 2021, leading industry players continued their mission to help fleets change the way they see the environment, as well as their impact. Advanced asset management strategies helped companies reach environmental, social and governance (ESG) goals while promoting sustainability through shortening asset life cycles, optimizing vehicle specifications to be more fuel-efficient, and to align with the duty cycle as well as geographical locale. New approaches also specified lighter components that allow for longer maintenance intervals which reduce environmental hazmat waste disposal.

Today, with Flynn’s foresight, companies are boasting vastly improved environmental records while implementing ESG strategies in front of customers, regulators, and other critical stakeholders. As an example, Fleet Advantage has saved customers approximately $250 million and approximately 175,000 metric tons in emissions since inception.

Socially Conscious Organizations

In addition to environmental stewardship, social criteria are also within companies’ ESG strategies. It’s important that organizations are operating the newest and safest trucks that keep all motorists safe and help attract and retain a greater pool of diverse drivers and other staff. Fleet specification experts work with each company to design new trucks for maximum safety, fuel efficiency, lowest maintenance cost, and highest resale values through innovative programs that focus on upgrading to newer trucks with advanced safety features. By focusing on safety proactively, fleets are recognizing risks that they may otherwise not likely identify, as well as a solution that could save millions of dollars in cost reduction while avoiding damage to their corporate image and brand identity.

Socially responsible organizations today also recognize that a more diverse approach to the transportation industry unlocks more potential growth for organizations through the advancement and empowerment of a gender-diverse workforce.

Governance & Corporate Leadership

Governance is an area many companies have struggled with in recent history. This pertains to the governance factors of decision-making, from sovereigns’ policymaking to the distribution of rights and responsibilities among different participants in corporations, including the board of directors, managers, shareholders and stakeholders. Governance factors highlight the processes for organizations. Fleet experts today provide analytics, processes, and transparency so that clients can meet legal requirements and satisfy every stakeholder in the process.

Today and Looking Ahead

Today, Flynn is proud of the leadership his company displays in life cycle asset management, data analytics and overall strategies to help clients lead competitive and agile organizations through better decision-making. Leading companies today are proud of the culture they have created internally, and many are strong examples of how diversity and inclusion in the workplace can have a substantially positive impact on their organization, employees, customers, and the surrounding communities. They believe that the long-term success of any business calls for a diverse body of talent that can bring fresh ideas, perspectives, and viewpoints into the workplace. Fleet experts now strive to create a culture of diverse individuals from all races, ages, genders, education levels, and cultural backgrounds.

Ultimately, leading executives like Flynn and his company have a goal to help the industry become as sustainable, socially conscious, and governed with as much integrity as possible. Every effort these leading companies put forth is to benefit all – the environment, clients, stakeholders and local communities.

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About The Author: Katerina Jones is Vice President, Marketing and Business Development at Fleet Advantage, a leading innovator in truck fleet business analytics, equipment financing and lifecycle cost management. For more information visit www.FleetAdvantage.com.

FTZs

THIRD PARTY LOGISTICS FIRMS OFFER BENEFITS TO THOSE OPERATING IN FTZs

Companies involved in the import of global products into the U.S. and considering the utilization of a foreign trade zone (FTZ) in their business may want to consult with a third-party logistics firm to get an in-depth look at what access to an FTZ may mean for them—and what a 3PL could offer in terms of benefits and efficiencies while operating within an FTZ.

According to U.S. Customs and Border Protection (CBP), FTXs are secure areas under the agency’s supervision that are generally considered outside CBP territory upon activation. Located in or near CBP ports of entry, they are the U.S. version of what are known internationally as free-trade zones.

Imported products can be brought into the country through an FTZ and no duty is paid on these products until they are moved to their U.S. destination. Products can sit or be warehoused in FTZs for lengthy periods and if it is determined these products are no longer required, they can be returned without duties being paid.

“Most importantly, the FTZ program is a U.S. government program-driven around compliance and is unique in that it covers the full supply chain,” says Trudy Huguet, senior director of FTZ Product at GEODIS in Americas, in an interview.

An international firm with a strong North American presence and operations, GEODIS is a logistics company that offers services in several lines of business: supply chain optimization, freight forwarding, contract logistics, distribution and express, and road transportation.

Huguet offered that the expertise of the 3PL that offers foreign trade services has many benefits but, most importantly, they usually can serve on compliance and efficiencies. For instance, she noted a 3PL may have better access “to operational systems and data flow that is needed for multiple systems to run an FTZ” or systems integrated with a foreign-trade zone system. She said a 3PL may also be able to serve certain shared costs with the availability of facilities such as warehousing, as an example.

“3PLs are driven by customers’ needs, like customization and square footage, along with services, staff and team members to run that FTZ for them,” she said.

Addressing a company’s needs is extremely important, in or prior to a peak holiday season, said Huguet.

She noted that many years ago companies used to administrate their own zones but that meant the expertise had to be in-house, necessitating the need to cross-train employees. However, by contracting with a 3PL, “those risks with these programs go away,” Huguet said.

GEODIS has molded programs to fit customers’ needs “so we will work with customers to determine how they can get the biggest bang for their buck,” and where they can find the greatest savings within the FTZ, she said.

Because the U.S.a U.S. FTZ is a sister program to the global free-trade zone, “We are unique in regulations and how we operate and very strong in compliance and most industries and manufacturers, producers and distributors,” Huguet said. “If they are importing into the U.S., they have the opportunity to benefit from this program.”

Getting involved in an FTZ is “kind of a three-stage process” that, Huguet says, involves consultation with the FTZ board where designation is obtained. Activation with local customs and security is followed by building the operational side of the FTZ to run parallel with in-house systems.

Paul Killea, senior vice president of Freight Services Compliance & Security in Americas for GEODIS, oversees import and export compliance for the U.S., Canada, Mexico, Brazil, Chile, Argentina and Colombia, in addition to running an FTZ product. He stressed that “compliance is very big part of the FTZ.”

“Compliance is the process of ensuring that all of our services and our customers’ services are performed in a compliant manner and adhere to all (government) regulations” in and out of the U.S., Killea says. “So, we are responsible to ensure that we have the right processes in place, the right tools for auditing and reporting and in doing so, create visibility to outside parties, specifically the government and our customers, to show them we are compliant.”

GEODIS provides an array of services such as air freight, ocean freight, warehousing and trucking, and the 3PL has a top goal to be compliant itself and to make sure its customers are, too. “First and foremost, GEODIS has to be compliant but obviously we need to make sure our customers are compliant as well. It is a global principle we hold in high regard at GEODIS,” he says.

Strong compliance would definitely be beneficial to a company looking at the benefits of a 3PL with access to FTZ, he noted.

On the security side, GEODIS has a team that manages various aspects of security. The company is a member of Independent Air Carriers and freight forwarder that adheres to the U.S. Transportation Security Administration regulations. The company not only transports air freight, “we are also a certified screening facility in six locations,” Killea notes. “So, my team manages all of that air freight security which is also beneficial to clients.”

Huguet points out that more companies are becoming interested in FTZs “so what we have seen are more companies trying to improve their supply chain dealing with all the various supply chain challenges and bottlenecking with merchandise. Everyone is looking for a better solution and FTZs will help with that.” 

In addition, they can assist with some of the governmental trade issues that have been put into place, such as dealing with China.

Challenges created by the COVID-19 pandemic and port congestion have created issues for companies that 3PLs with access to FTZs can assist with, such as creating additional warehousing within the FTZ to store products longer.

“Because of port congestion and because of COVID, merchandise is sometimes being delayed and not moving as quickly as it should,” Huguet concedes. “The FTZ program has certainly helped.”