As a business grows and sales volumes increase, eventually, it reaches a point where manual processes in the supply chain can’t keep up with orders. When this happens, logistics leaders typically turn to technology to streamline logistics processes and facilitate ongoing growth for the company. This point is a crossroads for many organizations, where they must decide how to access the technology they need to move forward.

Leveraging Your Logistics Provider’s Technology

Bridging the technology gap can be challenging for growing businesses or larger enterprises operating in niche markets. Limited budgets, lack of in-house technical expertise, and the complexities of integrating new systems can all stand as barriers to adoption.

Instead of making large tech investments, many companies turn to third-party logistics (3PL) companies for help. 3PLs often invest in the latest logistics technologies to provide superior service to their customers and remain competitive in a saturated market. Through the logistics partner, shippers also gain the benefits of the logistics technologies that 3PL uses.

Depending on the logistics provider, these solutions may include warehouse management systems (WMS), transportation management systems (TMS), visibility solutions, warehouse automation, artificial intelligence, automated guided vehicles, robotics, and more.

Here are some of the benefits a shipper can experience by leveraging its 3PL’s technology infrastructure:

• Significant cost savings – Buying logistics or supply chain software outright may cost thousands of dollars. Alternatively, buying user seats on a subscription model can cost hundreds of dollars per user, which adds up quickly in a warehouse environment. Warehouse automation investments like AS/RS or robotics can run from mid-five figures to more than $1 million, depending on the size of a facility and the volume it handles. A 3PL spreads the cost of its technology investments across its client base, which makes access to that technology much more affordable for the individual client.
• A higher level of service – Tech-enabled 3PLs streamline logistics and fulfillment processes through automation. This optimization helps to greatly reduce the risk of human error and improve order accuracy. Additionally, the greater visibility offered by a good technology suite can help identify and resolve problems early before they can impact the end customer.
• Accurate inventory management – Transferring inventory into a 3PL’s possession means that inventory gets tracked by the 3PL’s inventory management capabilities. A 3PL can help its customers gain a real-time view of what’s in inventory, helping avoid stockouts or overstocking.
• Better data – Modern logistics technology generates vast amounts of data related to supply chain operations, from inventory levels and transportation routes to customer preferences and market trends. A 3PL can use its technology suite to collect data on inventory movements and report on trends. Up-to-date information is available on real-time dashboards so customers can access it when needed. This capability allows the shipper to forecast more accurately and make data-driven decisions. This data can also be funneled back to other departments, such as sales and marketing, to help identify new opportunities.
• Continuous improvement – Trends and best practices in the logistics sector are in constant flux, making it difficult for a single business to keep up. A forward-thinking 3PL makes its technology investments strategically based on the changing needs of its full client base. These investments foster a spirit of innovation and continuous improvement that shipper customers will keep benefiting from over time.
• Agility and resiliency – Supply chain resiliency remains a top focus for most businesses. A 3PL’s technology suite can help shippers adapt quickly to changing market conditions or unexpected supply chain disruptions.

Leveraging advanced logistics technology is essential for staying ahead of the competition and meeting customer expectations. For businesses facing resource constraints or technological barriers, 3PLs offer a viable solution. By outsourcing logistics functions to experienced logistics providers, businesses can access the technology tools they need to drive efficiency, scalability, and cost savings throughout the supply chain.

About Phoenix Investors

Founded by Frank P. Crivello in 1994, Phoenix Investors and its affiliates (collectively “Phoenix”) are a leader in the acquisition, development, renovation, and repositioning of industrial facilities throughout the United States. Utilizing a disciplined investment approach and successful partnerships with institutional capital sources, corporations and public stakeholders, Phoenix has developed a proven track record of generating superior risk adjusted returns, while providing cost-efficient lease rates for its growing portfolio of national tenants. Its efforts inspire and drive the transformation and reinvigoration of the economic engines in the communities it serves. Phoenix continues to be defined by thoughtful relationships, sophisticated investment tools, cost efficient solutions, and a reputation for success.