How Shippers and 3PLs Can Better Manage the Global Cargo Chain's First Mile to Last Mile
Three experts from the WiseTech Global family of companies discuss how shippers and 3PLs can improve their cargo chains spanning first-mile pickup, cross-border consolidation, and deconsolidating into last-mile parcel carrier networks.
E-commerce has caused an explosion in shipping volumes worldwide. The pressure is on to implement omni-channel fulfillment to ship anywhere, from anywhere, and achieve faster delivery while controlling the cost of "free" shipping. We talked to three experts from the WiseTech Global family of companies to understand how shippers and 3PLs can improve their "cargo chains" spanning first-mile pickup, cross-border consolidation, and deconsolidating into last-mile parcel carrier networks.
How are the demands of omni-channel affecting global shipping?
Archival Garcia: Omni-channel is all about choice for the customer. Choice in brands, choice in products, and choice in service. As a result, there is increasing competition for cart and shelf space as retailers increase their product portfolio and niche players become established options. This demand will require more products to be managed—in more facilities and across more regions.
Shippers are being asked to serve more complex requirements and provide more value-added services. There is greater demand to break down full pallets to pre-allocated orders for both stores and DCs to decrease costs of handling and accelerate service. Collaboration across suppliers and retailers will mean more drop shipping and loose pick, case pick warehousing—not just inventory management.
There is pressure to reduce costly assets like warehouses and trucks, resulting in more cooperation among companies to share supply chains. Retailers and larger corporations can set up 3PL-like supply chains to serve multiple brands with a greater focus on the costs to serve and profitability across the supply chain and not just the retailer side.
What challenges do shippers seeking a global supply chain solution face?
Kenneth Pehanick: Each leg of the cargo chain has its own unique nuances that can't be handled with one set of business rules. Mode-specific rules help eliminate manual workarounds, increased costs, and service issues. LTL is no exception. The ability to apply rules to LTL legs will enable shippers to take advantage of a best-of-breed approach across the entire cargo chain.
Integration is also key. The ability to connect and share important data elements is critical to providing an automated workflow. LTL is often misunderstood in terms of what is required for integration, and if not managed properly, can result in cost and service impacts.
Other critical factors for LTL in the overall supply chain are availability of key data elements such as class and/or dimensions, ability to communicate with multiple carriers simultaneously and quickly, and ease of maintenance and implementation.
What technology challenges exist for 3PLs looking to incorporate multi-carrier parcel shipping capabilities to their global cargo chain initiatives?
Bob Malley: First, parcel isn't like freight. Parcel lacks standards related to rating, documentation, and tracking. Parcel volumes are often 20x higher than freight volumes, so integration and automation is a priority. Sub-second rate processing speeds are a must.
Secondly, 3PLs need to account for customer-specific automation requirements, such as integration, business rules, rates, and documentation. They will need one TMS platform that can adapt to the needs of each customer and change as their needs change, without having to manage or customize multiple platforms. A federated TMS architecture provides one unified point of control, but diversity when it comes to customer requirements.
Lastly, the capacity crunch is making intelligent containerization a must. Carriers want to cube out their vehicles and are applying surcharges to shipments that make poor use of space. Shippers will need to stop guessing and use cartonization, palletization, and containerization technology to make cost-effective packing decisions.