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Today’s Advanced Third Party Logistics Innovations

Last modified: September 28, 2016

The future of third party logistics has arrived. It represents a frightening, yet exciting and profitable, prospect: how will mobile apps, cloud computing, Big Data, internet of things (IoT), 3D printing, driverless vehicles, drone delivery and augmented reality benefit 3PLs?  Rather than leave you wondering, we detail the benefits below:

Technological Innovations are Driving Better Service

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 (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 the shipment progress in real time. New technologies are cropping up at a dizzying rate, some specifically target the logistics market and 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 costs and transportation and delivery times will be cut. Of these advancements, only drone delivery and driverless vehicles remain in the testing phase.

The Dizzying Speed of Technology’s Effects

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 trend is only implementing advanced technologies like Transportation Management System (TMS) and Warehouse Management System (WMS) applications. But that is quickly becoming the past. Developers are rapidly targeting small to mid-sized companies, which makes sense because they form the largest segment of the market. Once the costs of TMS and WMS drop significantly, they will become ubiquitous. These applications are also becoming more advanced and gaining the ability to respond to market dynamics instantly. In the future, they will evolve to have artificial intelligence (AI) capable of making some decisions on their own. Speech recognition, such as Siri, is also becoming more common. In the future, voice prompts and commands will be standard in the supply chain, such as when making stock inquiries and freight tracking. At the same time, intelligent speech recognition systems will enable workers to communicate directly with WMS & TMS, bypassing human actors, which will improve stocktaking, speed up order turn-arounds and decrease staff training periods. In many large companies, these are already happening to a more or less degree.

Mobile technology is revolutionizing 3PL. Many 3PL companies have already begun to use mobile devices and apps to improve agility. Devices fitted with radio frequency identification (RFID) chips mean goods will no longer be lost or misplaced in transit since each product will transmit its location. With immediate notification comes direct action and the avoidance of damaged goods when the chip signals oncoming adverse weather conditions, such as high temperature or humidity. Not only that, 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. 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 the rewards of highly satisfied customers.

The Internet of Things

This brings us to Internet of Things (IoT), which makes it possible for the best communications possible. The IIoT can be seen today in the use of advanced safety technologies in newer vehicles, such as the ability to detect problems like erratic behavior of other drivers and produce an alert. IoT also reduces shrink associated with unexpected opening of shipping containers and which items have been moved inappropriately, such as when a corrupt worker tries to steal merchandise. The IIoT now maximizes vertical integration of systems and prevents problems before they occur.

(IoT) increases supply chain visibility for goods in transit and to all supply chain data. The application of the Internet of Things (IoT) along with cloud-based GPS will make it possible to keep track of individual items and their conditions. IoT makes use of Radio Frequency Identification (RFID) chips that “talk” to each other. Chips attached to individual items will transmit data such as identification, location, temperature, pressure, and humidity.  Cloud-based technology is now being used by firms for access to applications from anywhere. The affordable computing power of the cloud allows analysis of extremely big data sets for studying business trends, patterns, and associations as well.

3D Printing Will Shorten the Supply Chain

3D Printing will make a significant impact on the 3PL industry. It was only recently that the technology turned into a reality and became available on a mass scale. With the ability to print exact working copies to create products or parts of products using metals and plastic – retailers will choose to ship raw materials instead of finished products and raw will soon constitute a hefty portion of shipped goods crossing borders. Since it will enable manufacturers to “print” on demand, the supply chain will be shortened as it will be unnecessary to have large quantities of finished product inventories. 3PL may even provide 3D printing services at the point of delivery soon.

Drones and Driverless Vehicles Increase Delivery Speed, Cut Costs

Although 3rd party logistics providers haven’t started using these technologies yet, there is little doubt that they will embrace it in the future. In the future, 3PL companies will use drones to deliver small packages quickly in both urban and remote areas and driverless vehicles have shown great potential as tools for logistics and supply chain management. Drones will go from point A to point B most efficiently and driverless vehicles will reduce the risk of accidents to almost zero. With high speed and precision, both technologies will shorten the supply chain and significantly reduce the costs of transportation. The only things preventing the widespread use of this technology are resolvable issues of government regulations like safety, size and weight limitations. Of course, they may never completely replace traditional means of transportation, but there is little doubt that they will be used to deliver a significant percentage of goods in the future.

Augmented Reality Will Increase Improve the Handling Of Goods And Speed Of Delivery

Augmented reality (AR) provides a direct or indirect view of the real world augmented by computer-generated sensory inputs, including sound and video.  Employees at 3rd party logistics providers are given the use AR technology, such as wearable devices, to gain critical information about the freight they are handling, such as contents, weight, and destination. Understandably, such visibility through AR technology saves time and improves the handling of goods, and reduces overall costs.

Science fiction is now reality. As your firm embraces these advancements, your customers will notice and satisfaction will increase. As manufacturing, transportation, and every aspect of humanity gains in modernity, reliance upon the Internet of Things (IoT) will continue to grow and impact every facet of civilization.

Should your 3PL know and comprehend this?  Flash Global’s innovations are utilizing the newest available technology and every 3PL stands to gain from these innovations.

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