A Five-Step Blueprint for 3PL Success
Companies are always on the lookout for ways to enhance their supply chain operations and make them more efficient. But 3PLs, in particular, face the unique challenge of regularly improving how they work with shippers, and, in the face of regular rate increases, finding new ways to reduce freight costs to keep prices down for customers. With margins already razor thin, it's more crucial than ever that 3PLs turn to information technology to help conquer these challenges and relieve the pressures related to costs, time and quality of service.
In order to save money, better collaborate with shippers and gain a competitive edge, 3PLs should consider these five technology-driven actions to boost performance and customer satisfaction.
- Automate Processes and Data Transfers. Despite advances in technology, many freight forwarders continue to rely on costly manpower to re-key information for each shipment. By using an automated system connected to trading partners, carriers, agents and brokers, information can be entered once and then automatically updated and passed on to the next party—saving time and avoiding errors. What's more, critical shipment documentation such as air waybills, bills of lading and manifests can be accurately system-generated and saved electronically for greater visibility. Major efficiency gains and cost savings can be made by automating data transfers between systems, whether it's for order management, the creation of export documentation or filing of customs declarations.
- Reduce Operations Time with Shippers. When it comes to responding to customers' rapidly-changing requirements, speed is of the essence. The ability to quickly set up new customers or alter arrangements for existing clients can be the difference between winning and losing a contract. It's critical to consider how a freight forwarding software package can enable 3PLs to operate faster, more efficiently and with greater flexibility. In doing so, 3PLs need to examine how a cloud-based platform can easily configure their processes to meet business needs without the need for expert IT resources or an expensive hardware investment. This added agility can also open up additional revenue streams.
- Make Trade Compliance a Priority. While many shippers place an emphasis on compliance, many of them do not have the right resources or time to focus on ever-changing compliance requirements. This presents an opportunity for 3PLs to offer customs compliance as a service for customers and create a new revenue stream for their business. For example, 3PLs can ensure shipments are screened against the denied party list, checking for embargoed countries or acquiring and tracking all appropriate export licenses. Providing trade compliance services for the shipper enhances revenues and profits not only for the shipper, but for 3PLs as well.
- Increase Shipment Visibility. Now more than ever, shippers are demanding better visibility from 3PLs. Reliable shipment visibility is essential to keep goods on schedule, costs in check, customers satisfied and margins protected. While this may sound like a daunting task, 3PLs should look for a hosted freight forwarding software system that provides end-to-end shipment visibility. This kind of solution can actually save 3PLs money by reducing errors and ultimately provides a competitive advantage against 3PLs that can't deliver when it comes to visibility.
- Incorporate Automated Alerts. Alerts are a key defense against supply chain factors that are outside of a 3PL's control. As goods move through the supply chain, customers need to know things are on track and that critical milestones are being reached. Automated alerts notify them when service level agreements or major milestones are at risk. Alerts also allow 3PLs and their customers to manage shipments by exception. Exception-based management filters out a lot of the noise common to the delivery lifecycle and allows shippers, customers and suppliers to focus their attention on shipments that are experiencing legitimate issues that need to be addressed, thus driving greater efficiencies. Freight forwarding software vendors now offer a wide variety of options for alerts—from simple notifications that an event has or has not occurred to sophisticated options that trigger follow-up activities.
It is critical that 3PLs take a hard look at operations to determine areas for cost reduction, productivity and efficiency improvements, and opportunities for new service offerings and revenue streams. There is also a great opportunity for 3PLs to save money, better collaborate with shippers and, ultimately, gain a competitive edge with the right IT mix. In a business as dynamic and complex as freight forwarding, technology is crucial to maintaining efficient, flexible operations.