Shippers rely on 3PLs for supply-chain digitalization

Tech Partnerships

Technology partnerships with 3PLs have a big impact on shippers’ business processes and supply chains. “It takes lots of touch points out of the real day-to-day work of logistics,” said Gillespie. “Dialing for trucks is one example. Technology makes process simpler and less manual, and drives greater visibility.”

“Automation eliminates a lot of document handling requirements,” added Schmidbauer. “Sometimes shippers need to change the process for taking orders. Freight invoice accounting is also improved.”

ODW’s approach is to examine their customers’ entire value stream. For example, “Different shippers require different levels of visibility,” Schmidbauer explained. “Some don’t want or need the highest level. They have to consider it from a cost/benefit perspective. We look at a wide range of technologies and help customers optimize their supply chains.”

ODW generally leverages outside technologies on behalf of customers, including FourKites, a provider of multimodal supply chain visibility solutions and deploys application programming interfaces (APIs) to transfer data from one application to another. The company also uses business intelligence software to help customers design and optimize networks.

A recent report from Accenture estimated that a pharmaceutical manufacturer with $10 billion in annual sales would save $387 million in its manufacturing and supply processes with the end-to-end capabilities of a digital supply network. According to McKinsey research, companies that aggressively digitalize their supply chains can expect to boost annual earnings growth by 3.2% and annual revenue growth by 2.3%.

Given those numbers, it’s no wonder that shippers are increasingly partnering with 3PLs to enhance their logistics technology deployments. It is vital for companies to digitalize processes to meet an ever-increasing demand to drive efficiency and flexibility and improve the customer experience.

It also shouldn’t come as a surprise that 3PLs like DHL see their investments in supply-chain technology (see sidebar on page 22) as a big opportunity for them.