An innovative piece of technology 3PLs are using to raise their savings multipliers and win more business
Is the 3PL industry hitting its “creative wall”? For years it seems that the recipe for winning shipper customers was a simple combination of process engineering, shuffling carriers and network optimization. But with the same strategies saturating the market, how are so many new 3PLs beating out longstanding titans for new business?
Where a tight circle of the usual logistics service providers (LSPs) traditionally vied for outsource RFPs, smaller, more innovative 3PLs are cutting through and winning more business. Without the enormous levels of freight under management (FUM) for rate leverage, there needs to be a deeper level of innovation.
Advanced technology and analytics is changing the perspective of what supply chain efficiency truly means. Emerging leaders are looking deeper into the supply chain to not only optimize traditional outlets of cost, but enrich deeper corners of the supply chain too.
For major outsource opportunities, 3PLs offer a combination of inbound/outbound management, freight pay and audit, track and trace and, potentially, a TMS or WMS application. Together, and with the assistance of an optimizing software, LSPs must hope that their package of the same key elements as all of the other candidates can somehow beat out the competition. Even if you win, it’s a losing battle when you consider carrier rate inflation and general rate increases (GRIs) that continue to plague the longevity of rate tariffs.
What is missing? A leading cost factor emerging in today’s supply chain environment has to do with the scarcity of equipment and detention charges. These are unplanned and uncontrollable by the 3PL as they still rely on either an outsourced warehouse operator or a customer to responsibly handle each piece of equipment. The average cost for inefficient handling of equipment annually at each site can run into the hundreds of thousands, offering a new lever for 3PLs to pull for shipper savings – but a lever that few use.
End-to-end visibility needs to be truly end-to-end to mean anything these days — and that includes the yard. While a WMS or TMS may offer surface-level tracking of trailers and dock assignments, to generate actual value and actionable intelligence, next-generation YMSs need to be added to the mix.
New YMS platforms offer an application-style user interface to take the guesswork out of rooting out inefficiency. Where cost used to be a trailing indicator for how the yard is managed, harnessing AI and machine learning in the yard can generate a proactive approach to cost with quantifiable savings. When added to the rest of your KPI metrics, you can build a highly compelling story of value for your customers throughout their relationship with you.
Alongside better cost management, an advanced YMS can help your customers conquer disruption. With SKU-level visibility in the yard, inventory can be quickly retrieved for a PO cut or a production line shutdown, avoiding customer penalties and an upset shipper.
Disruption is here to stay, and LSPs need to become more creative than ever to not only win business but retain it. Shuffling the carrier mix and studying shipping patterns alone is not a viable solution to contend with a rising wave of complex headwinds and pressures that supply chains are facing today.
Intelligent YMS applications offer real-world, reliable control for shippers and can be easily added to any outsource deal as a leading savings initiative. With full integration with WMS, TMS and RTTVP platforms, it seamlessly exchanges information for deeper insights and analysis across the entire supply chain while putting you at the front of consideration for shippers.
Real-time end-to-end visibility only truly means end-to-end if it includes the yard. Win more deals with Dynamic Yard as a core component of your solution value proposition. For more information, contact your FourKites representative or email us at [email protected]