We all know that too many businesses have too many people wearing too many hats, and as parcel shipping becomes more complex, more shippers are turning to 3PLs to help them take off a hat or two.
According to the 29th Annual Council of Supply Chain Management Professionals (CSCMP) State of Logistics Report, parcel shipping spend topped $99 billion, a 7 percent growth in 2017 compared to 2016, driven in large part by eCommerce. Shippers are looking for help with everything from rate negotiations to parcel shipping systems to last-mile logistics.
As a result, the market is seeing many 3PLs jump into the fray, and the competition for business is getting fierce. With the fight for carrier capacity, it is not enough for 3PLs to be one-dimensional in their service offerings. Their clients will simply move on.
With so many things to manage and so many different industries to help, even the best 3PLs can use some help themselves.
Take carrier rate negotiations in today’s multi-carrier, omnichannel shipping environment, for example.
As we pointed out in our recent eBook, “The 3PL Parcel Shipping Playbook,” one of the biggest changes the industry has seen is that businesses are no longer willing to lock into a single carrier for all their delivery services. The risk is too high, customer delivery needs are too diverse, and the need for competition during the carrier capacity crunch is too great. But the complexity of managing multiple carriers with rates that are competitive is beyond the capabilities of many shippers.
Many 3PLs have the volume and expertise to negotiate attractive rates among a variety of carrier services. Some offer broker services, making money by marking up carrier rates in combination with logistics services. They are still able to offer their clients significant transportation cost savings even after a markup.
However, as customer delivery requirements become more complex, managing rating (especially parcel), shipping, tracking, and invoice reconciliation across multiple carriers and multiple clients is equally complex. Relying on multiple carrier APIs and websites often won’t work because many carriers don’t have the IT infrastructure to keep up with production-level performance.
3PLs need automated transportation management systems (TMS) to help their clients realize cost savings while executing fast enough to keep their client’s delivery promise.
Here are some of the plays we shared in our eBook that can help 3PLs or shippers ship better:
- Implement a parcel and freight TMS solution with the ability to manage and calculate buy/sell rates across multiple carrier modes and services for multiple clients
- Ensure that rating can support sub-second response times
- Provide clients with the ability to log into SaaS-based multi-carrier shipping solutions to automate routing, labeling, booking, and tracking within their own fulfillment facilities
- Offer omnichannel shipping capabilities (ship from suppliers, fulfillment centers, stores, and offices)
- Offer auditing and invoice matching to compare expected vs. actual transportation costs
- Provide analytics to benchmark carrier rates and performance
There are plenty of other plays that 3PLs (as well as other intermediaries and shippers themselves) can use to up their shipping game such as:
- Negotiating DIM factors
- Implementing one centralized federated TMS platform to manage a diverse client community
- Generating accurate and compliant hazmat and international export forms and documentation
Download “The 3PL Parcel Shipping Playbook” today and get the plays that pay for you and your customers.