3PL, E-commerce, Technology By increasing visibility, flexibility, and accuracy, the latest technology pumps up 3PLs' ability to move, store, and fulfill shippers' orders—even amidst supply chain disruptions.More to the Story:Fitness ChecklistStepping up with TechnologyEfficient and effective supply chains have become a key competitive factor for many shippers, given the growth in e-commerce, as well as the upending of many operations due to COVID-19. To get supply chains in shape, shippers increasingly are turning to third-party logistics providers (3PLs).In turn, many 3PLs are deploying a range of technical tools that enable them to more effectively move, store, and fulfill shippers' orders. "We know technology is the future of distribution and fulfillment," says Brian Southwell, vice president of business development and marketing with 3PL Taylored Services. "It's necessary to maintain efficiencies and enable proper labor planning."Many of the technical tools 3PLs are deploying focus on improving supply chain visibility, flexibility, collaboration, and accuracy. In doing so, the tools boost shippers' efficiency and enhance their ability to make informed decisions. One example is collaborative robots—cobots—that assist human workers. They can increase, often substantially, the efficiency of workers handling jobs such as picking and packing. The cobot market will jump to $5.6 billion by 2027, up from $550 million in 2018, predicts Interact Analysis, a market research firm. The biggest applications will include materials handling, assembly, and pick-and-place, the research finds.While deploying robots to make residential deliveries is "nascent," 3PLs and others are conducting trials around the globe, says Susan Beardslee, principal analyst of freight, transportation, and logistics with ABI Research. One method is to pair human drivers and robots, so that a driver makes a delivery at one residence, while the robot heads to the next one. These efforts can both blunt the impact of the driver shortage and mitigate concerns about human contact in the age of COVID-19.Drones, or unmanned aircraft systems (UAS) and unmanned aerial vehicles (UAV), also are attracting 3PLs' interest. That's particularly the case within large warehouses and distribution centers, where these tools can quickly move items.Similarly, autonomous, automated delivery pods can efficiently move goods across the ground, again within 3PLs' warehouses and corporate campuses, Beardslee says. Once the regulatory and safety issues are addressed, these pods also may eventually play a role in last-mile delivery. Because they can do so without a human driver, their value can increase during a pandemic.Wearables, such as smart glasses that provide workers with information they'd otherwise have to get from handheld devices, can help 3PL employees more efficiently pick and fill orders. As a result, they're continuing to gain adherents, Beardslee says. The market for industrial wearables will enjoy a 9.2% compound annual growth rate between 2019 and 2024, forecasts ResearchandMarkets.com.Software bulks upAlong with hardware and devices, the software used within many 3PL warehouses and distribution centers continues to advance. Digital freight matching—sometimes known as the "uberization of freight"—is one such area, says Neil Menzies, managing director with L.E.K. Consulting. This refers to mobile or web platforms that match shippers' demands for capacity with carriers that have it, streamlining the process. Many 3PLs and brokers are investing in this technology, he adds.Solutions that enhance supply chain visibility, including track-and-trace systems, are also gaining steam and attracting investments. "Shippers want to know where their shipments are at any point in time," Menzies says. 3PLs that can provide this information can gain a competitive edge.Often, boosting supply chain visibility requires solutions that connect systems across an organization and even with supply chain partners. This might mean linking a shipper's ERP with the 3PL's warehouse and transportation management systems. "3PLs gain efficiency, transparency, and flexibility for their clients," Beardslee says.Say a shipper learns a shipment will be delayed by several weeks, so it instead secures air capacity, albeit at a higher cost. By connecting the systems so information can flow between them, management can use advanced analytics to better understand the impact on costs, inventory, and sales and operations planning. This insight can improve operations and provide a better experience for shippers.While it's still early, blockchain or distributed ledger technology likely will emerge as particularly muscular in some supply chain sectors, including fresh foods and pharmaceuticals. "Blockchain provides transparency and efficiency," Beardslee says.Polaris Transportation Group, a transportation and logistics company, has embarked on a blockchain initiative with its business partners. "Our goal is to provide a quick, efficient way to manage freight movements and billing reconciliations, and optimize payments, among other functions," says Dave Brajkovich, chief technology officer with the Toronto-based company.Return Solutions get a WorkoutJust as critical as the solutions that help 3PLs manage most forward shipments are the ones that come into play with reverse logistics, Beardslee says.E-commerce return rates tend to run several times higher than those for brick-and-mortar sales. Once an item is returned, it must be transported to a warehouse, inspected, and sorted. After that, companies have to decide how best to handle it. 3PLs that can provide an integrated, closed-loop approach can differentiate themselves.To be sure, it's too early to precisely identify which of these technologies will prove most valuable. "Many 3PLs are engaging in a lot of experimenting and investing," Beardslee says. Their goal? To identify and implement the technologies that can best help the shippers with which they work.Shippers appear to recognize this. More than 80% of logistics professionals indicate their budget for outsourcing logistics services to 3PLs would increase in 2020, according to research firm Gartner.For Polaris Transportation Group, innovation drives its industry-leading technological advancements. Each year, it moves approximately 300,000 orders between the United States and Canada, making it the largest independently owned less-than-truckload (LTL) cross-border carrier in Canada, says president Dave Cox.For the past several years, Cox and Dave Brajkovich, chief technology officer, have led an initiative to digitize the entire operation, including Polaris' warehousing, transportation, and broker divisions. The goal? "To make it easier for our customers and our partners to do business with us," Cox says.Through its subsidiary, NorthStar Digital Solutions, Polaris employs robotic process automation (RPA), machine learning, the Internet of Things (IoT), and artificial intelligence to create an intelligent document processing solution. This technology automates the handling of most of the thousands of emails Polaris receives each year that contain order requirements, customs information, and other data and documents.Let's Get DigitalThe solution electronically sorts and categorizes the emails. Those in which the information is accurate automatically move through a workflow connected to Polaris's enterprise system, which checks and validates the information before forwarding it to the company's customs broker—often, within seconds.The process is both quicker and more accurate than the previous manual steps. "It allows our people to manage by exception," Brajkovich says. "As a result, shippers' freight moves more quickly." In addition, data produced by the intelligence engines provide insight that enables its shipping agents to more proactively manage their activities.As shipments move to their destinations, enhanced IoT sensors on Polaris' trucks provide robust, live tracking. Clients can access this tracking information through Polaris' client portal, where they also can obtain quotes and process orders, among other functions. "These capabilities reduce the email back-and-forth that can otherwise consume so much time," Brajkovich adds.Polaris also has launched a blockchain initiative. The goal is to connect its transportation carrier partners and clients in a shared ledger program using smart contracts. Linking shippers and transportation carriers streamlines reconciliation for invoicing, billing, and shipments, and enables supply chain transparency. "It gives our shippers and consignees the ability to see their freight without having to call or email," Brajkovich says. What's more, the security of the solution helps keep Polaris' drivers safe.While Polaris has made great strides in implementing new technology, it's not resting on past successes. Brajkovich and his team are studying ways to further enhance the IoT devices currently on the trailers, to gain a better view of capacity."We're a small but mighty development group," Brajkovich says, adding that they're well on their way to completing the supply chain digitization initiative. "That's allowing us better insight to shipments, which ultimately helps to enhance the customer experience," he notes.Gaining Might and MuscleFrom its modest start in 1992, Taylored Services has grown to a fully integrated third-party logistics provider focused on the wholesale, retail, and direct-to-consumer sectors. Its 1.5 million square feet of warehouse and distribution spaces are located on both coasts and near the ports of Los Angeles/Long Beach and Newark, New Jersey.One key to Taylored Services' capabilities is its embrace of technology, Southwell says. For example, the company recently deployed autonomous robots that can boost warehouse pickers' efficiency by three to four times."Employees are more efficient because the robots eliminate much of the walking pickers previously did, reducing idle time and allowing pickers to focus on accurate picking," he adds.In early 2020, after testing a half-dozen robots at one location, Taylored launched 17 units that support several clients, handling many of the smaller orders that tend to make up e-commerce sales, Southwell says. The robots can handle products of varying sizes and weights, including jewelry, apparel, outerwear, and footwear.Just as important, the business intelligence the robots employ "help with order accuracy and speed," Southwell says. For instance, when a robot arrives at a pick location, its screen shows a picture of the product as well as its barcode, providing multiple ways to confirm accuracy.Along with the robots, Taylored Services' clients can call on its high-capacity Bombay sorters, also known as flat sorters. "While not new technology, the sorters are high tech and can handle large volumes in a short time frame," Southwell says.Taylored maintains two warehouse management systems. "Having two systems offers flexibility and varying levels of sophistication," Southwell says. One is more basic and easier to integrate. The other can handle greater complexity, and often is a fit for shippers that, for instance, must send goods to multiple retail locations. The solutions can interface with many ERP systems to provide real-time communication of order and delivery status, among other data.To move e-commerce transaction information even more rapidly, Taylored Services is implementing an application programming interface or API-based platform. This will transmit order information directly from the e-commerce system to the warehouse; previously, the data would first flow through a client's IT department. "With this, information moves in near real time," Southwell says.HIgh-Impact IMprovementsThrough Taylored Services' web portal, shippers can access real-time information on order status and inventory levels. "Not only do they not have to spend all day on the phone tracking orders, but access to this information helps them make better decisions," Southwell says.Technology will be key for both 3PLs and shippers, as they emerge from the COVID-19 pandemic and in the longer-term. "Shippers that have access to the technology needed to quickly handle growing volumes will be better positioned to support clients," Southwell says.The value proposition all 3PLs can offer has grown thanks to investments in technology that allows them to collaborate and communicate with partners throughout the supply chain—a key factor in realizing efficiencies and adapting to change.
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