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The 3 Shipping Challenges Confronting 3PLs Today

Third party logistics is changing. While yesterday’s 3PL firms were likely shipping bulk freight across state lines, today’s 3PL firms are shipping parcels worldwide on tight timeframes–putting more carrier services into play than ever before.  Pitney Bowes projected parcel shipping volumes would hit 20 billion parcels by 2025, and this was before the COVID-19 outbreak drove consumers online in record-breaking numbers.  Unfortunately, these increases in shipping volumes, carrier services, and parcel destinations complicate traditional 3PL operations, where business processes and technology were originally built to optimize large freight orders.  Three common challenges include:

1. Meeting New Customer Demands

Traditionally, 3PLs sent large freight loads such as cases and pallets to a retail store for distribution. They often worked with just a few carriers to manage these shipments, which meant negotiating rates and tracking delivery events was easy.

In this model, product distribution looks like this:

traditional 3PL shipping

Alternately:

alternative 3PL shipping

Now, however, many 3PL businesses are recognizing their shipping profile has pivoted, not only in retail but also in manufacturing, where shipping directly from a warehouse to a customer has become the norm.  This significantly alters the shipping landscape.  Suddenly, fewer movements are necessary to get a product to a customer, though most of the movements are performed by the 3PL:

new 3PL shipping

2. Managing Returns

Customer behavior is changing in other ways that impact 3PL operations.  Specifically, returning products has become a common customer practice, and customers are comfortable either dropping products off at carrier storefronts or the post office, or scheduling at-home pick-ups.  The customer’s expectation is that these products will quickly reach the 3PL warehouse for efficient processing and a subsequent refund or exchange.  This means 3PLs now have to have practices in place to manage the inbound shipment with their parcel carriers.

In addition, one of the biggest challenges for 3PLs with returns is that while 3PLs often secure very low rates with parcel carriers, there are some 3PL customers who have equally–if not better–rates, and these customers want their 3PL to use their own carrier account.  For most 3PLs, managing customer carrier accounts alongside the 3PL carrier accounts is difficult.

3. Staying Competitive

3PLs are now facing competition from their customer base.  Sometimes referred to as “Amazonification,” customers have realized how critical logistics is to their business and are therefore bringing their shipping operations in-house and even turning shipping into a profit center within the business.  To continually position their services as an attractive option, 3PLs have to hold carriers accountable for providing value: on-time delivery at the lowest possible cost.  However, they may lack the tools and technology necessary to aggregate and normalize carrier performance data, increasing the risk of a sub-optimal transportation mix.

Prime 3PL Operations for Success and Solve Shipping Challenges

The best way to prime 3PL operations for success and solve shipping challenges in this new shipping environment is to implement the right multi-carrier shipping software.  A cloud Transportation Management System (TMS) for parcel shipping enables a 3PL to manage their own carrier contracts as well as their customers’ carrier contracts in one system.  It increases a 3PL’s carrier service choices, including multi-carrier services from popular parcel carriers such as FedEx, UPS, and the USPS, in addition to regional parcel carriers and same-day courier services such as Deliv and Shipt.

ebook logistyx quadrant Choosing a TMS for Parcel ShippingReal-time rate shopping between multi-carrier parcel shipping and multi-carrier LTL shipping based on variables like cost, transit time, and business rules, reduces transportation spend, and by automating both inbound and outbound fulfillment processes–ensuring that all carrier requirements for rating, labeling, and document printing are met–more orders get out the door with less labor.

In addition, a TMS for parcel shipping enables 3PLs to easily use “zone skipping” to improve customer service and decrease transportation costs. Zone skipping occurs when multiple customers’ orders are consolidated for the first leg of the delivery journey and then inserted into a parcel carrier network for the last-mile delivery. This is especially beneficial for cross-border shipping because it significantly simplifies end-to-end logistics and decreases customs clearance costs.  The approach also provides greater flexibility since 3PLs can select local carriers in different countries and regions that have optimal delivery networks for serving their customers.

Finally, a TMS for parcel shipping also ensures 3PLs have the right mix of carrier services in their transportation strategy from the onset.  The software aggregates and normalizes shipping data across carriers, so 3PLs know when deliveries moving to a particular region, customer, or via a particular carrier are not meeting service levels. 3PLs can hold carriers accountable for failing to meet expectations and wield hard data to back up rate negotiations,  and they can consolidate carriers to ensure they get the best possible price.

Do you have the right shipping technology in place to solve shipping challenges and prime your 3PL operations for success? Contact a Logistyx expert to learn more.

Logistyx Keeps the Pages Turning at Rockpoint Logistics

Rockpoint Logistics realizes a 3% reduction in overall transportation spend and adds new carrier services to its network.

For specialty publishers like universities, professional groups and trade organizations, the prospect of printing, stocking and shipping individual titles is inefficient if not outright impossible. However, their buyers, including schools, bookstores, and consumers themselves, still expect rapid fulfillment of orders. Bridging this gap is Rockpoint Logistics, which stocks and distributes more than 1 million books, DVDs and other material for hundreds of specialty publisher clients.

Business Challenge

Faced with an aging parcel shipping system and limited carrier selections, RockPoint Logistics sought out a solution to completely revitalize their shipping and transportation management operations. Among other specifications, Rockpoint required the new system to integrate with their Blue Yonder WMS system and provide real time pricing and routing for all their carriers.

Solution

Rockpoint chose the Logistyx Technologies multi-carrier parcel shipping software solution to automate their entire fulfillment process. Logistyx verifies package contents, instantly calculates the best carrier option, and helps streamline the daily execution of more than 8,000 parcel shipments.

Benefits

  • 3% reduction in overall transportation spend
  • Increase in customer satisfaction by offering better delivery options
  • Real-time access to transit status, proof-of-delivery and management reports

 

Logistyx Helps NFS Meet Shipping Commitments

National Fulfillment Services accommodates high volumes of varying shipment demands and achieves savings across the supply chain.

National Fulfillment Services Case Study by Logistyx TechnologiesNational Fulfillment Services (NFS) is a complete fulfillment services solution that excels in handling warehousing and distribution, customer service, and order processing for B2B and B2C companies. As a distributor of everything from home furnishings, supplements and health care products, NFS has a vast array of inventory, and each client can have specialized delivery service level requirements.

Business Challenge

With customers shipping everything from DVDs to chandeliers, optimizing the shipping lanes to select the fastest most cost-effective way to ship was getting too complex to manage. That’s when Tom Krueger, Vice President of NFS knew he had a problem, and in looking at potential solution providers, identified the following core requirements:

  • Elasticity to modify shipping lanes in an ever-changing environment
  • Compatibility with NFS move to an eVS supplier for the USPS
  • Ability to implement complex business rules
  • Reduction of transportation and labor costs

Solution

NFS chose Logistyx Technologies for the capabilities they needed. Logistyx installed its multi-carrier parcel shipping solution in the company’s Philadelphia-based distribution center, to streamline domestic and international shipping. With the new parcel shipping solution in place, NFS has been able to reduce its labor, material and transportation spend. Contact us today to discuss your upcoming shipping system questions and technology requirements.

Logistyx Helps 3PL Improve Order Processing Accuracy

Tagg Logistics easily handles high order volumes from a diverse client base while improving order processing accuracy.

TAGG Logistics is a leading order fulfillment and third party logistics (3PL) provider focused on helping businesses cost-effectively handle their order fulfillment and distribution challenges. Operating out of facilities in St. Louis, Missouri (MO) and Reno, Nevada (NV), the company serves a nationwide client base of manufacturers, wholesalers and retailers shipping to their customers throughout North America and around the world.

Business Challenge

Tod Yazdi and Gary Patterson founded TAGG Logistics in 2006 and began a steady path of aggressive growth. “We knew that we were going to quickly outgrow our legacy systems as they didn’t have the functionality to address the more sophisticated requirements our clients were demanding,” said Yazdi. Based on their plans for growth, TAGG’s team was required to implement new warehouse management system (WMS) and transportation management system (TMS) to handle a very high volume and diverse order fulfillment environment.

Solution

TAGG reviewed several systems, and they chose the Cadence WMS by Cadre Technologies solution along with Logistyx Technologies multi-carrier parcel shipping software. Cadence and Ship-IT are tightly integrated with a scalable architecture to exchange information in real-time to create the most efficient fulfillment processes.

Results

  • Faster pick rates
  • Improved inventory tracking
  • Sophisticated, yet streamlined shipment processing
  • Customer-specific shipping programs
  • Paperless international shipping