There is a lot of buzz around ‘embedded 3 PL relationships’ in ecommerce industry where shippers are using third party logistics to cater to a large part of the experience they provide to the customers. With services like free deliveries, next day delivery and even same day delivery it becomes very vital for the shippers and logistics partners to be on the same page and work more collaboratively unlike traditional logistics businesses.
Like everything, there are pros and cons to this model as well. Embedded relationship does bring in a lot of visibility and alignment in terms of service level, but it also takes in a lot of resources on both the sides. Essentially, in an embedded 3PL arrangement, representatives from the logistics company work with the shippers in a more strategic manner to understand the requirement and similarly representatives from shipper’s side work with the logistics partner to monitor the performance.
Despite having known benefits, embedded 3PL relationship is not commonly observed. The problem arises in the implementation; at this time when the logistics industry is still trying to catch up with the needs of ecommerce, it becomes very difficult for them to have dedicated resources for individual shippers and their needs. Shippers on the other hand do not have the bandwidth to bring in required supply chain innovation and therefore tend not to have deeper relationships with vendors.
However, there has been massive progress in supply chain in terms of technology. With advanced cloud based supply chain management solutions in the market, transparency in the supply chain is no more an issue. With increased end-to-end visibility, these solutions not only provide advanced analytics but also help automating operations by creating a seamless channel between shipper and the logistics partner. Improved transparency also helps establish a better customer service for the shipper. If used properly, these innovations can streamline operations efficiently leaving only strategic alignment for an embedded 3 PL relationship.
For effective shipping management, our aim is to fully understand shipper’s logistics and provide them with intelligent technology based solutions to align their logistics performance with the business strategy