How To Survive And Thrive As A 3PL In An Era Of Uncertainty
3PLs, shippers, and freight forwarders in the United States are presently facing many pressures, including heightened fuel costs, rising freight rates, supply chain disruptions, demands by customers for greater visibility, and, of course, ongoing ambiguities surrounding how the U.S. and China trade dispute will affect international trade and shipping.
In this era of uncertainty, how can the logistics community ensure that it not only survives such pressures but even thrives in spite of them?
A significant part of the answer lies in embracing the latest supply chain management technologies. With a digital supply chain management platform, logistics providers can cut their costs considerably, helping offset the impact of rising fuel and freight expenditures. A digital system lowers labour expenditures because it automates tedious manual processes, resulting in a six to eight percent reduction in labour costs.
More importantly, a digital solution can predict how supply chain disruptions (such as transportation strikes, port congestion, or extreme weather) will impact the delivery of goods and their ETAs, and even advise on what steps should be taken to mitigate the impact (e.g., choosing an alternate shipping route). A digital platform that uses multiple sources of information and advanced analytics to validate data will capture 100 percent of ETA changes to inbound vessels, versus 43 percent using a system that relies heavily on manual updates. In this manner, 3PLs, shippers and freight forwarders can be proactive in responding to disruptions, nipping them in the bud before they result in revenue losses due to inaccurate ETAs or failed deliveries.
Arguably the most powerful feature of a digital solution is that it provides real time visibility on the movement of cargo and freight. This visibility can be offered to the customers of logistics providers as a value-added service, improving customer loyalty and retention since 3PL customers nowadays are becoming more insistent on acquiring visibility of their goods while in transit. Visibility is vital to 3PL clients because it enables them to manage their supply chains more efficiently. For example, it allows retailers to improve their on-shelf availability, which can increase their revenues by two to five percent.
The message is unmistakable – in this era of uncertainty, it is essential more than ever before for the logistics community to employ digital supply chain management tools to handle present challenges and gain market share against their competitors.
If you’d like to discuss how to digitize your logistics business, book an appointment with a member of the Gravity team at the ASCM event by filling in the form below. We’ll be at the UST booth #301:
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