Exploring the Advantages of Third Party Logistics

Logistics Tech Outlook | Thursday, May 12, 2022

A look at the development of third-party logistics such as IoT and automation tech.

FREEMONT, CA: Customer demand has followed roughly similar patterns in most years despite the challenges brought about by the pandemic, ensuring the possibility to project supply and demand with some confidence. Factors such as inflation, potential interest rate hikes, and global uncertainty make predicting the next set of events complex.

Many third-party logistics (3PL) providers have been rendering solutions to help them collaborate with their clients to navigate uncertain business environments and face challenges such as product shortages and delayed shipments. Taking steps like these helps them reduce costs and operate with greater efficiency. An example is that automation enables denser storage options so that the same operation can run in a smaller footprint. Companies struggling to secure additional space in today's demanding real estate market can benefit.

Developments in automated equipment have also boosted internal processing efficiencies from put-away through pack-out, helping to mitigate the labor shortage. The enhanced capacity gained from the automation of machines also allows logistics providers to offer their clients additional, advanced operations. Technology can also give logistics providers a competitive edge. Shippers who decide not to implement technology independently, perhaps due to resource or cost constraints, will seek providers who can offer the technology as a service.

Critical examples of successful 3PL operations commonly integrate multiple technologies, including robotic process automation, artificial intelligence and machine learning, and the Internet of Things (IoT).  These methods can identify efficiencies and boost customer service in operations like online ordering, real-time shipment tracking, inventory management, predictive analytics, and fulfillment.  Other areas of focus using this technology include  connecting to customers by API and EDI and the usage of GPS tracking. Third-party logistics providers pave the way for operations in the future by developing these trends.

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