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The State of 3PLs: Advancements and a Service Mindset

Last modified: September 28, 2016

The 3PL industry transformation is likely to be critical for the future of the industry. While customer dissatisfaction has grown, the industry is gearing up meet challenges with the latest technological advancements. New technologies most likely to change the face of 3PL include mobile apps, cloud computing, Big Data, internet of things (IoT), 3D printing, driverless vehicles, drone delivery and augmented reality. While some are already in use, such as mobile apps and 3D printing, others are still in the testing phase, such as driverless vehicles and drone delivery.

These technologies’ main goal will be enabling 3PL companies to connect, collaborate and engage with their clients seamlessly in order to improve the speed and quality of service. Packages will soon have drastically reduced incidences of being lost or misplaced (by being fitted with RFID chips which communicate with each other). Driverless vehicles and drones will soon be delivering shipments to buyer doorsteps, with customers able to monitor their shipment progress in real time,  but they must overcome several regulatory hurdles before they can come into widespread use. New technologies are cropping up at a dizzying rate, some specifically target the logistics market. The time is approaching in which automation will flood the entire logistic process and human intervention will only be required for critical tasks. Human errors will be removed in the automation of logistics and transportation costs and delivery times will be cut.

Technology Pace Driving the State of Logistics Now & In the Future

Smart containers will have (RFID) sensors that improve the transparency and accuracy with which a product is transported. In the past, identification of shipping container materials relied on human input to answer any questions about a given product. Furthermore, shipping containers may or may not be susceptible to damage from the elements; therefore, merchandise would arrive in poor condition, and a return on investment would be lost. (RFID) chips mean goods will no longer be lost or misplaced in transit since each product will transmit its location. With immediate notification, direct action can be taking for the avoidance of damaged goods when the chip signals oncoming adverse weather conditions like high temperature or humidity. They will also be able to transmit traffic conditions and drive-specific data, such as average speed and driving patterns back to the central office. Devices fitted with radio frequency identification (RFID) chips are not only capable of transmitting their location, they also have the potential to hold data about themselves, so that they can be instantly traced and identified. Using mobile apps installed on their mobile phone, customers will be able to order, process and track freight shipments at any time. As supply chain and transportation visibility is a hot topic for Logistics Managers and Directors, 3rd party logistics providers, who adopt this type of technology, are sure to reap rewards of highly satisfied customers.

Would you believe just 30% of 3PL companies use these cutting edge technologies? The majority of smaller companies find the costs of these applications too high to be profitable. Meanwhile, large companies with the financial resources to maintain their own servers and a dedicated IT staff tend to only implement advanced technologies like Transportation Management System (TMS) and Warehouse Management System (WMS) applications. Application developers are increasingly targeting small to mid-sized companies, the largest segment of the market. Once the costs of TMS and WMS drop significantly, they will become ubiquitous and respond to market dynamics instantly. Artificial intelligence (AI) and speech recognition, such as Siri, is becoming more common and the technology will assist in stock inquiries and freight tracking. Intelligent speech recognition systems will enable workers to communicate directly with WMS & TMS to improve stocktaking and speed up order turn-arounds. Mobile technology is revolutionizing 3PL and many 3PL companies have already begun to use mobile devices and apps to improve agility.

The Enablement Age Empowers Shippers & 3PLs thru the Use of Emerging Technology

IoT is a revolutionary new technology that will give devices and products the ability to talk to each other within a network. In the future, all the devices and products will have a chip (such as RFID) implanted in them so that they will identify themselves and know their right place in a warehouse, gather information about their surroundings and transmit them to the handlers. Using the Industrial Internet of Things, RFID sensors will provide a detailed account of all items within any given container and identify times when the environmental conditions of a given container pose a threat to the products. For example, sensitive equipment may be damaged by dramatic changes in atmospheric pressure. The sensor will provide an alert to drivers or other employees working within the shipping company. Creation of smart containers becomes reality when the IIoT can ensure any such sensitive items are placed within an “indestructible” shipping container, which would eliminate the need for concern over environmental concerns. However, the IIoT will progress to a point where human action is unnecessary in addressing potential problems. The Industrial Internet of Things will have the ability to recall or redirect a vehicle, and computerized loading equipment can select the appropriate shipments for removal and redirection.

3D printing, which prints exact working copies of products, also has the potential to make a significant impact on the 3PL industry. Manufacturers and retailers may soon choose to ship raw materials instead of finished products. Augmented reality is another technology that has the potential to have far-reaching impacts on the 3PL industry. It gives workers the ability to see, hear, feel and smell beyond their natural senses. The advancement enables them to gain critical information about the products, such as unopened parcel contents, weight and dimensions.

Summary

Cloud-based technology is quickly changing firms, thus bringing on the new age of Big Data. Cloud-based applications can be now accessed from anywhere by any type of firm. With the affordable computing power now available, companies can analyze extremely large sets of data to study patterns, trends and associations pertaining to their business activities. Today’s 3PL managers and workers are lucky to live in a time when advancements are in reality, solving many chronic problems every day. Embrace the technology and you will excel beyond your competitors.

Should your 3PL employ these advancements? Add your thoughts in the comments section below! Next up, we discuss 3PL providers room to grow.

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