Shippers Seek 3PL Efficiencies Amidst Capacity Constraints
Q: What efficiencies that you offer as a 3PL are in the highest demand this year where we've seen tremendous capacity constraints?
A: From a high level perspective, we always take a collaborative approach on which core competencies we can offer and streamline for our clients.
We work with a very diverse group of customers/shippers, and most are open to extending the services we can offer that could include simple consolidation and mode shifts to integration with client order management systems and our TMS/Client Interface modules.
The vast majority of our customers realize they have core competencies in terms of what they manufacture or the varied services they provide, allowing the 3PL they choose to partner with focus on logistics competencies that may have required the customer much larger staff costs if they had chosen to perform internally.
Specific value offerings we see in the most demand this year seem to be related to the capacity constraints we saw beginning in the second quarter. The majority of what we manage still involves LTL and we have done a good job negotiating increases this year on behalf of both large and small shippers that our locally based Station/Agents have worked with for years, often prior to the inception of our Leveraged Platform.
This is the first year I have seen both National and Regional LTL providers asking for multiple increases. Some are warranted and expected and often we've had to shift customers to our other core vendors who have managed the capacity issue better this year than others.
We have shifted to working with providers who have not become overly engaged with a couple of large retailers (I will leave unmentioned) and had good success getting our customer base to switch with us.
Managing the TL capacity constraint has also become much more intensive in 2017. The ability to manage many return trips while maintaining visibility to where our loads will deliver often provides us an immediate truck once the driver(s) are good with hours.
A key initiative this year will be our own consolidation with larger LTLs into our static TLs moving between distribution centers that we have unused space to ride along with our mail deliveries. In most cases, customers have been open to this option and the savings in exchange for what is usually one additional transit day over premium LTL service.