Third-party logistics (3PL) providers play a vital role in the supply chains of virtually every industry globally. In fact, “90 percent of the Fortune 500 relies on a 3PL model,” explains Amy Shortman, Overhaul’s vice president of product marketing. 3PLs provide significant value to companies by taking on the logistics involved in shipping goods, including warehousing, fulfillment and transportation.
Visibility into each of these components is essential. But as with many other businesses, it can be challenging for 3PLs to achieve. The right technology, however, can resolve visibility blind spots and reveal new opportunities.
How 3PLs should view visibility
“Visibility has been the buzzword over the past several years in transportation and logistics,” says Amy. But while many 3PLs have invested in visibility solutions, they often still lack critical real-time location and conditional aspects of their customers’ cargo. For high-value and time- and temperature-sensitive shipments, it’s not enough to simply know that key milestones have been achieved and the final delivery status. “This doesn’t allow for corrective actions during transit that, if not identified in real-time, may result in the product being damaged or stolen,” she explains.
On the other hand, some 3PLs still continue to rely on manual updates. Not only is this approach labor-intensive, it’s also often unreliable and lagging – and only focused the shipment’s latest milestone or on a driver’s location. “An entire team might be dedicated to locating shipment status” says Amy. Instead, a 3PL should consider visibility technology as the key that unlocks both improved operational efficiencies and new business. “A 3PL has to demonstrate to its partners that it can proactively manage, report and mitigate risk,” she emphasizes. “It’s advantageous to a 3PL to adopt technology that provides real-time insights, which in turn allows them to optimize and expand their operations.”
The drawbacks of a homegrown visibility solution
Historically, when 3PLs have identified a need for a new solution to streamline operations, they’ve created it in-house. But what may have worked well in the short term might not be the best approach for the long run. “Most 3PLs, even the largest in the space, are hindered by antiquated and homegrown systems,” explains Amy. As a result, these solutions often don’t integrate with one another, which makes it hard to unify internal and external data. But a technology provider like Overhaul can solve this problem.
“We can immediately plug-and-play and start simplifying workflows,” says Amy. “The in-house approach might fill an initial critical gap, but it usually leaves 3PLs stuck swiveling between piecemealed technologies. Overhaul’s solutions, however, streamline managing even the most complex standards of care, compliance and security, and real-time, end-to-end visibility.”
The competitive advantage of the right technology
Like any business, 3PLs continuously look for ways to set themselves apart from the competition. “The more a 3PL can differentiate itself with value-added services for increasingly complex and sophisticated supply chains, the better the position it will be in,” notes Amy. “It’s not enough to just meet their clients’ expectations. They have to exceed them.”
For 3PLs, exceeding expectations is defined by consistently achieving the best outcomes for their clients. It means no thefts, spoilage or accidents during a shipment, or having to pass on costs related to such incidents, like increased insurance premiums. It also means optimizing internal teams and resources, as well as identifying when technology can help consolidate and accelerate systems and processes.
“Ultimately, if a 3PL isn’t using a visibility solution like Overhaul, it’s almost impossible to keep track and truly ensure that they’re following their clients’ standards of care,” says Amy. But once Overhaul is implemented, the benefits are instantaneous. “Instead of them needing to spend hours to piece together disparate data to generate a report, we immediately surface information. It’s all simply a part of the workflow,” she concludes. 3PLs can then apply this reclaimed bandwidth to what they do best: handling the logistics for the multitude of supply chains we all rely on.