3PLs Have Your Back
Shippers trust their third-party logistics partners will be there for them—no matter what the business conditions.
While the partnerships between logistics providers and their clients are always important, many proved to be even more so during the past year. The pandemic prompted spikes in demand for some products, straining capacity and upending supply chains.
Why 3PLs Need a Hand-Holder-in-Chief
Stay-at-home orders and safety protocols changed processes in many warehouse and transportation operations. The jump in e-commerce sales, although a positive in many ways, increased supply chain complexity. Sustainability became a greater focus.
The logistics providers and their clients highlighted here navigated a difficult year with trust, smart work, innovation, and commitment.
MUNICIPAL + Saddle Creek: Off to a Running Start
MUNICIPAL, the men’s apparel brand co-founded by actor and producer Mark Wahlberg, producer Stephen Levinson, and Harry Arnett, has grown quickly in the year it has been in business, despite having launched during the pandemic.
MUNICIPAL, whose mission is to “build a global community of inspired people who refuse to stop pursuing their full potential,” needed a logistics partner that would help it navigate the pandemic and could craft a solution to support the company’s rapid growth.
From Hoodies to Track Pants
The partner also needed to manage the company’s product assortment, which ranges from hoodies to track pants to hats, all in multiple sizes and colors. Saddle Creek Logistics Services’ order fulfillment expertise, ability to scale, and responsiveness were all draws, says Tyson Alvarez, MUNICIPAL’s director of operations and planning.
To streamline e-commerce fulfillment operations, Saddle Creek implemented a SpeedCell storage solution rather than traditional racking. The rolling shelving can fit thousands of SKUs within a tight space and helps reduce picking times, says Christopher Svatek, regional senior director with Saddle Creek.
A pick-and-pass system further speeds the process. Every order picker is assigned a specific zone in the warehouse and only picks items from that zone for each order. Orders are transported via a powered conveyor from one zone to the next; additional items are inserted as needed until the orders are complete.
“Pick-and-pass streamlines the overall process by minimizing excess travel in the order flow,” Svatek says. “It has allowed us to increase efficiency by about 20%.”
Another benefit of pick-and-pass systems: They can scale as order volumes grow. That’s critical any time, but particularly when labor is tight and costs continue to increase.
order volumes take off
That scalability is already proving its value. MUNICIPAL’s sales, all online, have zoomed, particularly after HBO aired a mini-series focusing on Wahlberg’s businesses. “Order volume has increased beyond our expectations,” says Rick Robertson, MUNICIPAL’s chief financial officer.
The Saddle Creek team was able to increase capacity quickly, addressing the immediate need and creating a good line of sight for future growth, he adds.
Along with robust technology and detailed processes, solid communication is key to the relationship between MUNICIPAL and Saddle Creek. “One big factor in a strong partnership is communication and working through potential issues,” Alvarez says.
Because it’s a startup—albeit highly visible and rapidly growing—forecasting sales for MUNICIPAL remains tricky. “We have faith and confidence in the team at Saddle Creek,” Robertson says.
If sales surge or a challenge arises, MUNICIPAL can quickly connect with Saddle Creek to “adjust, pivot, and leave customers happy,” he adds.
AMMEX + Pegasus: Glove at First Sight
Remember the difficulty healthcare providers and others had accessing protective equipment during the pandemic? AMMEX, a wholesale distributor of disposable gloves and barrier protection products, turned to Pegasus Logistics Group to help it secure capacity during some of the most challenging periods.
“In about 18 years with AMMEX, I’ve seen container shortages before, but nothing like this,” says Gene Herbst, the company’s vice president of supply chain. AMMEX, which has sister operations in China, saw the pandemic emerging before many other companies in the United States. It was able to secure additional capacity from its manufacturing partners.
Then, Herbst and his colleagues reached out to shipping companies, seeking more space to move these items from Asia to North America. This was a shift; Herbst typically signs direct contracts with four ocean carriers each year.
“Last year was the first year I reached out to companies like Pegasus,” he says, adding that volume was three times what he’d normally expect.
Similarly, Herbst usually doesn’t need to pay peak season freight rates, as his volume is steady throughout the year. In 2020, he transacted at spot market pricing.
do the hustle
Pegasus leveraged its international solutions team to help Herbst quickly access the capacity he needed. “For us, it was about hustling and working with our partners,” says Chad Heller, executive vice president, global development. “We were on the phone at 2 a.m., getting space. We talked to our partners daily.”
At the same time, Heller and his team were careful to be transparent and realistic in their client communications. For instance, promising a fixed rate when a higher FAK (freight all kind) rate was more likely, “would be misleading,” Heller says. Moreover, making this promise likely would put the customer in the position of having to take the FAK rate because it would already have been committed.
For the most part, Pegasus employees were able to “make sure the right network was in place for domestic as well as ocean shipments,” Heller says.
Reaching out to Pegasus “cut down the time my team had to spend working to get these bookings,” Herbst says.
Floyd Home + XPO Logistics: Furnishing Visibility
Each year, more than nine million tons of furniture wind up in landfills. Concerned, Kyle Hoff and Alex O’Dell co-founded Floyd Home in 2013 in Detroit to develop a set of table legs that allow anyone to convert just about any material into a table. They then added sofas, chairs, and other products. Today, Floyd products can be found in more than 50,000 homes around the world.
During the pandemic, demand for beds, shelving, and other large home items surged. The team at Floyd contacted XPO Logistics for a solution “that could help them keep up with surging demand during the pandemic, while providing real-time visibility into inventory levels and shipment progress,” says Ashfaque Chowdhury, XPO’s president, Americas and Asia Pacific.
A primary supply chain challenge? Gaining visibility when moving less-than-truckload (LTL) shipments.
“E-commerce demands real-time visibility into our supply chain, and we wanted a solution that lets us see how our goods are moving from the beginning all the way through to delivery,” says Brad Strang, senior logistics manager for Floyd.
Many solutions, however, were fragmented between fulfillment, middle-, and last-mile transportation, he adds.
visibility at a glance
That wasn’t the case with XPO’s solution. The XPO Direct model lets the team at Floyd Home track all products at a glance. This real-time visibility into Floyd Home’s supply chain at every stage of the process, from order to delivery, allows Floyd to adjust as demand changes.
XPO Direct, a flexible solution for inventory management, employs a shared distribution network to position goods closer to consumers, cutting delivery times, Chowdhury explains. In fact, by leveraging XPO’s assets and supplier relationships, customer inventories can be positioned within one- or two-day ground delivery of approximately 99% of the U.S. population. XPO’s nationwide network handles small goods as well as furniture, appliances, and other large items.
Floyd Home is using XPO Direct across multiple sites in major metro areas, along with XPO’s Last Mile delivery services. “XPO Direct is a solid end-to-end solution with low fixed costs, immediate service benefits, and scalability, if and when we need additional resources,” Strang says.
With XPO Direct, Floyd Home has been able to reduce time-in-transit, as well as damage rates and losses. “The end-to-end visibility has given us a new level of control and exception management, while reducing outbound transportation costs,” he adds.
(Editor’s note: On August 2, 2021, XPO Logistics Inc. announced the completion of its spinoff of GXO Logistics Inc., creating two independent, publicly traded companies. GXO is the contract logistics business that will manage what was previously called XPO Direct.)
Fresh Clean Tees + Kenco Group: Tee time
Fresh Clean Tees, a designer and online purveyor of yes, t-shirts, grew several-fold over the past few years, outpacing the scale and capabilities of its previous logistics provider. The company then turned to Kenco Group, drawn by its depth and breadth of experience.
“We had the feeling Kenco would work through every possible problem,” says Jason Finkelstein, director of operations with Fresh Clean Tees.
Once the two companies signed a contract to work together, Kenco had little more than one month to enable the shift and onboard the company. Given the complexity inherent in transitioning inventory from one logistics provider to another and integrating new technology solutions, Kenco had to craft a detailed plan and then be ready to adjust daily or even hourly, so “all spokes in the wheel work in concert,” says Dan Coll, Kenco’s e-commerce fulfillment senior executive and business unit leader.
“Open communication and working closely together” helped ensure plan adjustments were effective, Finkelstein adds.
Kenco manages Fresh Clean Tees from a new facility in Jeffersonville, Indiana, that’s engineered for direct-to-consumer operations and has the infrastructure to handle growth. The e-commerce technology stack offers pre-built integrations to sales channels including Amazon and Walmart, as well as to platforms such as Shopify. It also connects clients’ sales channels to Kenco’s fulfillment solution.
Because Kenco receives orders in real time, brands can offer same-day fulfillment.Rich reporting and analytics help drive optimization in upstream supply chain decision-making.
A robust operating management system (OMS) handles complicated inventory assortments, which are typical with apparel companies that sell products in multiple sizes and colors. The Kenco OMS allows Fresh Clean Tees to offer complex combinations without having to create individual SKUs for bundles or kits, as traditionally has been required.
Once items leave the distribution center, Kenco’s proprietary transportation solution identifies the lowest-cost option among major carriers of small e-commerce shipments, while still meeting customer expectations.Many companies enjoy savings of 30 to 40%, Coll says.
Because Fresh Clean Tees, like many apparel companies, has a complex global supply chain, its logistics provider is both “our final and first line of defense,” Finkelstein says. When tackling challenges involving logistics, raw materials, or other issues, “having a strong 3PL between customers and production is critical,” he adds.
Nature’s Logic + eShipping: It’s Only Natural
Nature’s Logic, a provider of natural pet foods, turned to eShipping to help achieve its goal of carbon neutral distribution. eShipping offers data-driven distribution chain management solutions and transportation management system technology, among other services.
A first step in achieving carbon neutrality is measuring the carbon impact of all company activities, says David Yasulka, chief executive officer with Nature’s Logic. To start, Nature’s Logic is assessing its warehousing and shipping activities. This includes the fuels needed to heat and power the facility where it stores products, as well as the fuels used to transport them.
in rare form
With many logistics providers, assembling this information is difficult. “It’s rare to get consistent visibility within a transportation mode, and even more rare to get consistent visibility across modes,” says Tony Totta, chief sales officer with eShipping.
If, for instance, a procurement department arranges to purchase a handful of pallets from a supplier, the transaction may be essentially invisible to anyone outside procurement until the package arrives on the receiving dock.
“There are so many buckets in which information can get buried within an organization,” he adds.
Whether shipments are in transit or in storage, eShipping captures every available data point. It then directs the relevant data to the right person or department. So, financial data flows to accounting and finance, while supply chain information heads to operations.
“eShipping helps make the measurement of our collective carbon footprint easy, because it is so data-driven,” Yasulka says. With Nature’s Logic, eShipping can track the number of miles its products travel, and the form of transportation used, as well as the power consumed within the warehouse. This information is converted to metric tons of carbon.
Armed with this data, Yasulka and his colleagues know the amount of carbon offsets they need to purchase. For every pound of carbon the company sends to the atmosphere, it’s investing in projects that remove a pound. One project involves helping a community in India shift from coal to renewable energy; another is investing in regenerative agriculture, or farming techniques that sequester carbon in the ground rather than emit it.
data and motivation
In looking for a partner to support Nature’s Logic’s journey to carbon neutrality, two qualities were key. First was the ability to collect data. If they don’t normally have it available, it can be costly to assemble, Yasulka says.
The other attribute is motivation. eShipping is truly committed to sustainability, he adds, noting the company has joined the Pet Sustainability Coalition.
After working on the program for about six months, Nature’s Logic achieved carbon neutrality in early 2021. Businesses today need to be focused on sustainability because, Yasulka says, “Change is coming.”
Why 3PLs Need a Hand-Holder-in-Chief
A new 3PL relationship can be exciting, full of promise, and—just like all partnerships—sometimes difficult to navigate. This is where the hand-holder-in-chief comes in—an individual dedicated to onboarding new shippers to ensure expectations are set, best practices are followed, and the project is a success.
The complexities of onboarding can overwhelm even a senior team of professionals. Introducing a proven implementation methodology breaks things down into reachable milestones, and sets up all parties for a successful launch.
Key steps of the methodology include:
- One main point of contact to provide a holistic view of the project and understand dependencies.
- A structured plan that clearly lays out each organization’s responsibilities and task owner.
- A customized timeline for each project to meet shippers’ planned initiatives.
These steps provide stability in what feels like amonumental, and sometimes chaotic, project.
Shippers are often winding down in-house operations or negotiating an exit from an incumbent 3PL while running their day-to-day business during the implementation phase. 3PLs can make the transition easier by leveraging their industry expertise and experience.
The above tools, such as a single point of contact to manage calls, timelines, and deliverables, are an example of that lived experience. As the saying goes, “every project needs a champion.” In this case, the hand-holder-in-chief works across theorganizationto enable each department to focus on their individual tasks to ensure they meet milestones. The shipper can focus on project deliverables instead of project management.
A successful go-live isn’t the only important measure of new client onboarding. 3PLs must understand the lifecycle of bringing an account from contract execution to operational stability.
The timeline for stability doesn’t end with a launch date. It requires a transition timeline with a single long-term point of contact who has the tools in place to continue the momentum.
- All processes, documentation and open deliverables are transitioned to the account management team.
- Formal hand-off to project stakeholders.
- Open tasks delegated.
- Critical operational and account management goals circulated.
- Account review proactively scheduled.
After a well-executed handoff, the hand-holder-in-chief lets the account management team take over day-to-day communication while remaining engaged and available behind the scenes.
Account reviews provide a formal event to evaluate goals and share updates. More importantly, that touch base reminds the shipper that a team is ready to implement the next phase of their company’s growth.