Are you a 3PL that is providing logistics transportation and freight services as an added value to your clients?
Your third party logistics warehouse might have multiple clients’ inventory within your facility. Each of your clients might have its own set requirements on how to store, handle and deliver their goods. Each of your customers gets charged for receiving goods into the warehouse, a monthly recurring storage charge while the goods stay in the warehouse, and a handling charge to ship the goods out, sometimes combined with the IN charge. In the majority of cases, when an order is shipped out of your warehouse, your customer may arrange for the carrier to deliver the goods, or the customer’s customer may arrange their own carrier to come pickup their goods. In some cases, the customer may request you for assistance in delivering the goods, or you may offer brokerage or truck services to deliver the goods at a cost for that particular customer.
The rules of engagement for logistics transportation services in a 3PL environment are widely varied. Some customers do not need freight services, some may be heavily reliant on the warehouse providing them as that is not their core competency. As a 3PL, you might have different pricing agreements with each of your customers, there are no set rules of engagement, or pricing models.
Just as there are customer specific pricing models for handling their goods in the warehouse, there may be customer specific rules on how to distribute their goods. Each customer may have their own proprietary rules on carrier selection and assignment. Compound this over multiple customers, and it can become a very complex and daunting operational feat.
Our Transportation Management Solution (TMS) offers a broad range of modules to accommodate the growing needs of 3PLs, such as yourself, who are looking for a software solution to manage your logistics transportation and freight distribution needs. Our TMS delivers capabilities to assist you in all facets of your transportation needs and offers the ability to leverage other related tools and features, all within the same web interface.
Our solution equips you to execute faster, better, and more reliably while providing the real-time, detailed insight that minimizes problems and maximizes revenue generation and profitability. We empower you with automated tools to optimize the expertise of your people, reduce the amount of manual effort and inquiry, and exceed performance expectations.
Benefits of transportation management solutions for 3PLs
• Manage freight requirements from multiple customers, with different carrier selection/routing rules
• Expand your offering of freight and logistics transportation services to your customers
• Ensure safety and compliance of the carriers you use and engage
• Get visibility to profitability by lane, by customer, by carrier.
• If you are an asset based 3PL with your own fleet of trucks, you will need a combination of brokerage tools to engage carriers, as well as asset based tools to handle drivers, trucks and trailers.
Examples of Vertical Market Specialization
Food Cold Storage - Let’s consider the case of a high end chocolate manufacturer that does not have regional manufacturing facilities around the country to put themselves close to their customer base. Because of the perishable and temperature sensitive nature of their product (which must constantly remain between 40 and 65 degrees Celsius), they retain local refrigerated warehouses around the continent to which they can ship truckload quantities of their products. The product is then distributed locally on climate controlled vehicles. The cold storage warehouse provider will charge the chocolate manufacturer to receive the products, put the products away in the correct ambient temperature facility, pick the products they want, and provide freight services for them in their area as they have an agreement with a local carrier who does climate control services for them. The cold storage logistics provider has an agreement to charge its client the cost to hire the truck, with a markup administrative charge.
Consumer Packaged Goods – A consumer goods company manufactures and distributes their products regionally. Manufacturing plants are typically located close to where the ingredients are sourced for specific products, however they still need to distribute the products nationwide for their customers. The manufacturer contracts a 3PL to store the products locally. Product is shipped to them from all over the continent, from all of their various manufacturing operations. When a customer in Southern Ontario (ABC supermarket) orders 5 pallets of tomatoes, 6 pallets of vegetable soup, and 10 pallets of potatoes, it can all be sourced out of the 3PL’s warehouse in that region. In this case however, the manufacturer’s customer (ABC supermarket) has their own carriers that they deal with, and will send a local carrier to pick up the 21 skids and take it to their Distribution center. The 3PL is not involved in logistics transportation services at all in this case.
Beverage Manufacturer – A major energy drinks manufacturer distributes their drinks from a single manufacturing facility in Europe. They are made and canned overseas and shipped in retail packaging by overseas containers to local drayage hubs around North America. The manufacturer does not have their own warehouses, they also do not have their own fleet of trucks, and do not engage with carriers themselves. They contract with local logistics transportation providers to not only warehouse the final goods, but also to manage the movement of the containers from the drayage hubs, into their warehouses, then return the containers. The 3PL assumes the responsibility for receiving, warehousing, and picking subsequent orders. In this case the 3PL would hire a drayage company to take care of moving the containers from the drayage yard to their facility, unload the container, then return the empty container to the drayage yard. In this case, the manufacturer would be charged an hourly rate for the use of the drayage company.