Third party logistics (3PL) providers, just like any business in supply chain, have their uphill battles. Customer pressure to reduce costs, a better focus on sustainability, fluctuating fuel costs, commoditization, reduced carrier capacity, talent shortages—these are all challenges that 3PLs faced during- and post-recession and continuously address. This month, Supply & Demand Chain Executive brings you Part II of our three-part “3PL Update” series, in which leading 3PL’s give us their take on overall industry logistics trends, business challenges and their growth strategies going into the next few years.
Are there any other challenges (not mentioned above) that need to be brought to light?
Tim Eusterman, Senior Director, Industry Marketing, Intermec—One area that 3PL’s have been challenged with for a long time is managing their internal systems on the floor of their distribution centers. Because of the mix of clients and their particular operations models—including Warehouse Management Systems (WMS), single- and multi-client site operations requirements and the range of mobile computing technology and equipment options—finding a ‘least cost’ operating model that benefits both the 3PL and their clients has been difficult. In today’s high performance DC environment, there is no doubt that technologies—such as voice-directed work both on wearable and vehicle-mounted computers and multi-function handheld computers with capabilities such as near-far scanning, advanced imaging, RFID—can significantly improve worker performance, morale and equipment utilization rates. But managing these technology platforms, as demand for labor shifts with seasonality or between various sites in the 3PL’s network, has never been more difficult. 3PL’s need to look to their mobile computing partners for new solutions to meet these demands, both in terms of technology and with regard to WMS integration support, purchasing/leasing/rental options, and life-cycle services models to extract the available productivity increases, improve their return on assets and lower overall operating costs.
Matthew Menner, Senior Vice President, Transplace—There are a number of regulations that could greatly impact transportation—and the overall quality of life for the U.S. population—in the near future including CSA, hours of service (HOS) changes and electronic on-board recorders. Regulation is expected to decrease driver utilization by three percent, which will exacerbate the current shortage of long-haul truck drivers (approximately 100,000 and growing) and cause even greater capacity challenges when there is an uptick in the economy. It’s critical for shippers to strategically plan for this challenge to ensure access to truck capacity and avoid disruptions in the transportation of goods.
Jim Moore, Vice President of Supply Chain Excellence, Ryder Supply Chain Solutions—A major challenge that businesses face today is regulatory changes. For example, the Compliance, Safety, Accountability Act (CSA) has made professional driver recruiting and training and fleet maintenance even more complex. In addition, transportation-related regulations can vary by state, which increases operating costs for compliance.
Clyde Mount, President, 3PL Worldwide Inc.—Our greatest challenges lie in figuring out the best ways to: ramp a customer quickly (not an easy task); configure a facility for efficient operations across a broad range of client needs; configure business rules; configure customer-centric reporting; integrate with client e-commerce and business systems (ERP, WMS, EDI, etc.); and efficiently add extra services that add value to our clients each and every day (customer service, inbound sales, outbound sales, etc.).