In the Era of Amazon, Who Should be Invited to your Logistics Party?

Supply Chain has experienced more changes in the last five years than it has in the previous thirty years combined.  Most people attribute this to what’s known as the “Amazon Effect.”

The “Amazon Effect” is a driving force for change in the supply chain and logistics space, and has forever changed customer expectations.  Shippers and logistics providers are scrambling to carve out competitive advantages.  Meanwhile, customer expectations are changing just as quickly.  Capabilities that were “nice to have” just five to ten years ago (or even just a year or two ago), are now considered essential by customers.  The real key to these capabilities is enabling end-to-end visibility into shipments, documents, inventory, and invoices.  Providing full visibility into shipment data prior to tender, during transit, and post delivery allows actionable decision making that benefits both shippers and customers alike.

So, what can you do to address this rapidly changing landscape and take advantage of the new opportunities it presents, rather than be left behind?  The first thing you need to do as a shipper is determine how you want to manage your supply chain.  Do you want to manage logistics in-house, or would you prefer to reap the benefits of outsourcing some or all of your logistics requirements to a 3PL?  Once you have determined this – it’s time to throw a logistics party.

 

The first thing you need to do as a shipper is determine how you want to manage your supply chain.  Do you want to manage logistics in-house, or would you prefer to reap the benefits of outsourcing some or all of your logistics requirements to a 3PL?

 

The key to any successful party lies in the guest list.  Here’s a quick breakdown to help you understand the possible invitees who might assist with your evolving supply chain:

1PL – A first party logistics provider is both the cargo sender and the cargo receiver.  If you are a 1PL, it means you’re basically doing everything yourself.  It makes for a pretty quiet party.

2PL – A second party logistics provider is a carrier who owns the means of transportation.  Consider a shipping line who owns or leases the trucks they use, or truck companies who lease their trucks.  They tend to face low returns but with low barriers to entry.  Think of 2PL as your old stand-bys – you can count on them to come to the party, but they don’t have the most sparkling personalities.  It definitely puts more people in the room, which is nice – but no real “wow” factor.

3PL – The true guest of honor!  A third logistics provider brings outsourced services together to manage all of a company’s supply chain management functions.  In terms of your party, this guest orchestrates everything for you, and is all you really need.

There’s a lot of gray area and a lot of choices to be made when putting together your guest list.  To optimize your supply chain, you need to have a full understanding of the functions of 1PL, 2PL, and 3PL providers, and how they can impact your business.

As a shipper, if your choose to outsource to a 3PL, you should know about ALS’s comprehensive 3PL solution.  The benefits of our solution include the following:

  • Infrastructure and up-to-date technology that shippers may not have the ability to invest in
  • Consistent, reliable, and responsive service to clients that shippers can pass on to customers
  • Transparent updates on the latest supply chain regulations and best practices
  • Ability to scale up and down as needed
  • A true collaborative, continuous improvement partnership that enables shippers to improve the bottom line long beyond the date the relationship kicks off.

We provide a single-source solution for all of your transportation management needs, with rapid responses to industry fluctuations and volatility.  Everything we do in our 3PL space is designed to make your job easier.  If you are currently managing logistics yourself, or using a second party but feel like you’re missing opportunities, reach out.  We would be happy to walk you through our 3PL solutions and the ways our services can benefit your company.

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