A 3rd Party Logistics Company handles its supply chain operations and logistics on its customers. Third-party logistics companies offer receiving, storing, packing, and shipping services. Some 3PL companies also provide Value-added services. Kitting and assembly, postponement packaging, and inventory management are among them. The Digitization In 3PL is a significant change that made the warehousing work systematic and efficient.
What Is Digitization In 3PL Space? How Does It Function?
The term third-party logistics (3PL) describes a service that provides a wide range of customized services, often to consumers, businesses, or multi-users, to reduce costs. Additional services can also be supplied as warehousing, inbound and outbound transportation, and value-added services. “Services can include just one service, such as freight transportation or warehouse storage. IT can also be a network-wide service bundle that handles supply chain management from beginning to end.”
Today, in the global 3PL space, it isn’t easy to separate current trends from technological trends based on the current trends in the industry. Often, even movements that aren’t based on tech products are enabled by technological advancements.
Analytical expertise is required as clients expect data-driven decisions. Basic descriptive analytics will evolve into prescriptive and cognitive analytics in 3RD Party Logistics companies. “3PLs are actively seeking to expand their role in the value chain beyond low-margin commoditized services to higher-margin managed services or even end-to-end services.”
What Does the Term Digitization In 3PL Space Mean?
According to supply chain research firm Armstrong & Associates, the third-party logistics market in the U.S. will reach $1.1 trillion in revenues by 2022, up from $800 billion in 2016. The Asia Pacific accounts for 38% of worldwide 3PL revenue, making it the most significant market globally. In its 2018 3PL study, the research company spotlights two critical trends in the industry: the ever-closer relationships between shippers and 3PL service providers and the growing importance of emerging technologies, including blockchain and automation. Nowadays, online shoppers expect to get their purchases within shorter delivery windows. There are currently many retailers offering same-day, next-day, and one-hour deliveries. Changing increased package volumes are driving distribution networks. Shippers now need to improve their fulfillment capabilities by providing strong last-mile delivery capabilities and better data to optimize routes and improve operations.
What Are the Benefits and Uses?
Blockchain, the technology first connected with bitcoin, provides shippers and 3PLs with a powerful new tool for maximizing supply chain value. Blockchain provides a permanent record of every transaction created every time a product changes hands. Because each transaction is verified and recorded by an independent third party, the technology improves security because all participants can access this distributed ledger where transactions are recorded. Thus, time delays and human error are reduced, while safety, transparency, and governance are enhanced. Moreover, it provides irrefutable evidence that wood and paper pulp has been sustainably produced, enabling brands to comply with regulations, preventing them from using banned products, like conflict minerals, or checking the provenance of raw materials.
The robot workforce is already widespread on assembly lines around the world and is steadily expanding into logistics – primarily driven by the product picking needs of the e-commerce sector. In 2021, market research firm Tractica expects 620,000 robots to be used in warehousing and logistics, increasing 40,000 in 2016.
Also, robots have been successfully piloted at DHL’s supply chain warehouse in Unna, Germany. During pick up in the warehouse, robots assist the pickers with heavy lifting and drop off orders once loaded. As a result, injuries can be reduced at the workplace, and employee welfare and productivity can be improved.
Transnet, which operates an integrated logistics company in South Africa, knows it must innovate fast to stay ahead of the game, which is why it has been partnering with Microsoft to establish a DevOps process that spans all areas of development. It will lead to a reduction in Transnet’s product delivery costs and the creation of scalable, IoT-based solutions, helping it improve its assets’ efficiency.
Small and medium businesses have become more interested in working with local partners for their delivery operations. In the wake of the pandemic, logistics companies have been forced to develop contingency plans to mitigate risk, and Digitization In 3PL Companies play an essential role in these plans. As demand and capacity increase, infrastructure requirements such as additional trucking fleets, shipping facilities, and warehousing and storage facilities will increase.
Scope of Digitization In 3PL Space
More and more customers are looking forward to collaborating and working with their 3PLs in the long term. We expect them to embrace change, plan with us for the next four to five years, and involve us in every aspect of the organization. Providing 24/7 accurate and efficient services for 3PL companies is essential to meet customer demands. New collaboration and communication technologies are being adopted to meet this demand. As IoT and cloud-based logistics management systems interact, they transform data into actionable, value-added information, which increases visibility, thereby increasing productivity only because of Digitization In 3PL Space. Making informed decisions can minimize disruptions when planning and using proactive information.
All parties within the supply chain benefit from increased communication and collaboration, improving their ability to plan and execute shipments, thus improving decision-making. 3PLs that provide added value services, such as returns handling and inventory management, are those that will differentiate themselves in what is a fiercely competitive industry. Speed and time are crucial in the digital economy, so the transportation industry must transform to competitive.
Why Should You Choose Genex Logistics?
In addition to providing Global Logistics and Project Logistics, Genex Logistics also offers supply chain management, transportation, and distribution services. Genex Logistics is dedicated to providing world-class products and services through thought leadership, sustainability, and an innovative workforce. Our responsibility to our customers, society, and the environment is to deliver sustainable benefits.