Third-party logistics providers (3PLs) are not necessarily known for technology-related innovation, often due to the mismatched between payback periods and the length of client contracts.
But that is clearly starting to change, 3PLs are increasingly making these kinds of investments, setting up innovation labs and more.
Supply Chain Digest Says...
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| The Gartner note summarizes several other 3PL innovations – SCDigest will be back with the rest next week. |
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"The global 3PL community is working hard to exceed customer expectations by working smarter and better leveraging their knowledge, assets, people and technology," the analysts at Gartner wrote in a recent research note .
The note focused on some noteworthy innovation strategies at leading 3PLs - below are some of the highlights.
UPS Supply Chain Solutions (SCS): Gartner notes that UPS Advanced Technology Group (ATG) is a dedicated team formed in 2017. Its mission: to bring a smart logistics network to life by fostering a culture of innovation and continuous improvement. It is tasked with developing new solutions and integrating UPS systems with customer systems to deliver more operational flexibility and visibility. The group achieves this by researching, testing and developing new technologies that enhance the 3PL's data-driven capabilities for distribution, sorting, transportation and delivery.
Gartner says having a dedicated group helps UPS SCS accelerate decisions and improve collaboration with customers and external organizations. Its smart logistics network improves visibility and efficiency and uses data and analytics to improve decision making. The group also helps UPS strengthen collaboration with other organizations, such as technology companies and academic institutions, to explore innovative solutions.
DHL's Supply Chain eCommerce Solution: This business unit takes a strategic approach to e-commerce as a high-growth vertical and has enhanced its logistics offering to meet the specific needs of e-commerce fulfillment and last-mile businesses, Gartner says. DHL defines its target customers as a combination of omnichannel brands, retailers, manufacturers and pure on-line players, as well as leading marketplaces.
Gartner say DHL helps meet specialized e-commerce needs of its client base through turnkey solutions for high capacity, multichannel fulfillment strategies, specialized packaging, dedicated or shared-use solutions for order fulfillment and returns capabilities. The 3PL offers its customers a full set of integration tools, including an API to connect DHL eCommerce with a customer application or platform.
Kuehne+Nagel: Gartner says the company's myKN is Kuehne+Nagel's unified customer platform, and a good example of an established 3PL innovating to create a complete digital customer journey, complementing its existing specialized applications such as order management for large customers. The 3PL identifies its unified global operational platform, as one of its most important features. myKN enables customers to plan, quote, book, monitor and analyze their shipments through one single system.
With myKN, Kuehne+Nagel offers a seamless digital experience through one simple interface, automating and digitizing shipping from quote to final invoice. Automation of processes results in more operational efficiency and minimal manual intervention. This, in turn, lets customers focus on new dimensions of collaboration between partners and suppliers, based on full digital connectivity. myKN is primarily designed for small and medium-sized enterprises and includes visibility and tracking features that other major 3PLs normally reserve for customers who ship larger volumes.
Agility: Gartner says 3PL company Agility played a crucial role in informing customers about network capacities and disruption impact through its interactive maps. These maps offered a view of global air, ocean and road freight markets as well as country-level drill-downs of updates on current capacity.
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For example, for air freight customers, the digital maps help discover information on capacity, impact of passenger flight cancellations and charter market conditions. Ocean freight customers can use these maps to check container availability to ship from countries to the rest of the world. Road freight customers can see the impact of disruption on local pickups, deliveries, border restrictions and driver availability. In addition to interactive maps, Agility provides general updates on air freight demand, port and terminal operations, equipment shortages and special requirements of regions to engage in logistics activities.
Kerry Logistics: Rail freight has emerged as a cargo transport alternative. In terms of efficiency, rail freight served as a middle ground between air and ocean freight, being cheaper than air freight but faster than typical ocean transportation.
 3PLs have offered their customers rail freight services to major European destinations. They made this possible by increasing their rail capacity - many vendors as much as doubled their freight trains between China and Europe to ease the pressure on air and ocean transport. Gartner says Kerry Logistics used its Eurasian rail network to provide its customers with alternative solutions to reduced capacity in air and ocean freight, noting that Kerry was one of the first to launch westbound freight trains from China to Spain under China's Belt and Road initiative.
DB Schenker: DB Schenker has engaged in advanced technology for digitization in logistics. Its initiatives related to automation and robotization in both warehousing and transportation put DB Schenker ahead of its competitive set. The 3PL approaches automation and robotization in three different streams: (1) innovative hardware, navigation and AI solutions; (2) mature intralogistics automation technologies that are project-based and highly integrated; and (3) innovative vision, AI and motion control systems.
Gartner says examples of automation and robotization technologies used by DB Schenker are a goods-to-person order picking system that uses autonomous mobile robots (AMRs), forklift automated guided vehicles (AGVs), and robotics-enabled scanning and labeling.
Automation and robotization are targeted for application in new business opportunities as well as for retrofit of existing sites. This is done by preparing automated solution templates, screening existing sites with selected technology suppliers, and maintaining a globally managed engineering group. The team continuously maintains a strong pipeline of further use cases and also conducts workshops and hackathons, some even with customers, to address their needs faster.
The Gartner note summarizes several other 3PL innovations – SCDigest will be back with the rest next week.
What do you think of these examples of 3PL innovations? Let us know your thoughts at the Feedback section below.
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