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Raj PatelVP, Industry Strategy, 3PLs

As I recently shared with our friends at Let’s Talk Supply Chain, there are three major headwinds making it difficult for the 3PL industry to differentiate, ensure consistency and, in some cases, just survive. Well, there are likely more but here are the three categories that reflect much of the pain today:

  1. Labor
  2. Costs
  3. Innovation

Do these sound familiar? Maybe you have a few others in mind or think about your top three in another way. Supply chains, as we all know, are fraught with problems and issues at every turn – which, as it so happens, is how we all have a job. These problems are so pervasive that it’s worth exploring them deeper and talking about how to solve them.

Labor

Everyone has a staffing shortage – from your suppliers to pickers to dockworkers and drivers. The problem isn’t simply staffing but making the most of the people you do have. And we’re not talking about keeping cell phones in pockets and micromanaging staff — there are easy solutions that multiply the effectiveness of each position. One of which is real-time supply chain visibility.

Real-time visibility gives up-to-the-minute insights into PO-level location data, and helps dock workers understand which inventory is a priority. It streamlines yard processes with faster turn times, making drivers and gate staff more effective. It pushes load-level data to all members of sales, support, purchasing, etc., to drive time-to-value for every deal. And it saves transportation teams and upstream partners volumes of time chasing tracking information.

Costs

Freight costs are as high as we’ve ever seen, from ocean containers through truckload and down to parcel. Costs can be mitigated by leveraging unique value-adds like favorable corridors, fast turn times, and proactively routing inventory based on aggregate supply/demand.

But the costs don’t stop there – detention and demurrage rates are through the roof, chargebacks for OTIF and other performance programs take bites out of the bottom line, and returns or reverse logistics create a need to re-pack and re-distribute more goods than ever before.

As you might have guessed, real-time visibility can help save the day again. Detention costs drop on average by roughly $100,000 for customers implementing FourKites. We’ve seen a customer save $10 MILLION. Visibility creates proactive communication for stricter schedules and drives faster exceptions management to reduce OTIF costs. And real end-to-end supply chain management helps position inventory and reverse logistics in more strategic locations to leverage inventory on hand and prepare for major disruptions.

Innovation

Adopting technologies and pushing out new offerings — we hear about it from every vendor in our inbox and LinkedIn feed all day long. The problem is we have to adapt and evolve or competition will surpass us. Tackling sustainability issues has become priorities for customers. Each 3PL must weigh robotics, automation, customer-facing solutions and more. While the value of many solutions is debatable, there is no arguing the importance of having actionable supply chain data.

However, innovation is a double-edged sword, as it can be the reason your business grows or falters. We cannot simply keep our eyes on our nearest competitors and mirror their newest improvements. Too much innovation leads to overcomplication and an inability to execute. Not enough leaves teams in the dark and with time-consuming manual operations. Innovative visibility technology means real, actionable insights that empower users to be more effective with every movement. And it serves as a symbolic gesture to your customer base that you know what you’re doing. Innovation creates simplified end-user communication, reduced touches, and new value props for your sales team. It is a requirement in this digital age.

Now what?

FourKites is committed to leading the supply chain industry with customer-driven innovation, building the most comprehensive suite of solutions on one tech stack that interfaces well from the cloud or integrates into ERPs, TMSs, and WMSs. This means faster time-to-value upfront, greater long-term savings, more deliverables, and a promise of continued growth with a trusted partner. Visibility has been a hot-button subject for more than 20 years. Now technology is surpassing historical needs. It’s time to do something about it before you get left behind.

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