A survey revealed that 6 out of 10 consumers in Southeast Asia would increase their spending this 2022 holiday season, suggesting a busier than regular business activity for retailers. Resorting to 3PLs (editor’s note: Third-Party Logistics) to scale rising order volumes would be an obvious choice for retailers. However, while outsourcing deliveries is a great idea, managing them is a complicated ballgame. Let’s see how retailers can make the most out of this partnership.
Ensure delivery reliability
Delayed deliveries, especially during peak seasons, are a big concern for eCommerce providers. Partnering with 3PLs can tackle this challenge effectively.
Since each 3PL provider is responsible for meeting several SLAs specific to the type of delivery they offer, it dramatically reduces the chances of late deliveries during busy periods. Logistics service partners reduce delivery-related risks by leveraging the partner’s network to execute deliveries in case one of them fails to deliver as expected. By working with multiple carriers, businesses have the advantage of streamlining the delivery operations for various regions and delivery types. It also provides flexibility to partner with logistics providers by gauging them on parameters such as the first attempt success rate, on-time deliveries, shipping accuracy, etc., and as per business-specific needs like white glove delivery services or temperature-controlled deliveries, and others.
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Choosing the right logistics partner
The foremost requirement for any business is to zero in on the best logistics service provider for their business needs. Prioritizing data over manual biases and decisions provides a better reference point. AI and automation-powered smart logistics management platforms empower businesses to automate 3PL selection based on cost, serviceability, distribution network, expertise, rate of first-attempt delivery success, customer SLAs, etc., and multiple other parameters to execute same-day, next-day, or other order fulfillment windows. Since automated decision-making eliminates guesswork and expedites allocation and other processes, it increases on-time deliveries by 24%.
Optimize utilization of own fleet and 3PL
Allocating tasks between 3PL and own fleet can take time and effort. Still, there may be instances where deliveries may be outsourced when full-time riders stay idle. An underutilized fleet is a gateway to increased operational costs.
Businesses can also prioritize between their own fleet and logistics partners to improve operational efficiency. An intelligent allocation engine assigns deliveries on the basis of payment type, SKU type, invoice value, weight, order volume, vehicle type, etc. Capacity-based allocation allows businesses to plan trips days in advance. Retailers can gain visibility of their own fleet’s future capacity based on customer SLAs, improving logistical planning.
Ensure greater operational control
Outsourcing logistics to a third party means businesses lose a certain degree of operational control. Visibility over processes becomes even foggier when the 3PL partner further collaborates with other logistics providers to execute deliveries.
Smart logistics management solutions offer unified dashboards that enable businesses to manage, track, and monitor the operations of multiple logistics partners under a single window.
Standardize NDRs to simplify tracking
While outsourcing enables businesses to save time and resources, each 3PL may have its own interface, which evolves with time, making it difficult to keep track of and adapt to these changes, for instance, having multiple terminologies against a non-delivery reason (NDR).
Consolidating diverse, related terminologies under a single subhead simplifies the problem statement for retailers. It helps them to understand and validate non-delivery reasons with the customers.
Reduce RTO instances
Return to Origin occurs due to inaccurate addresses, delivery delays, poor scheduling, and the non-availability of customers at the time of delivery.
Here, real-time tracking minimizes the instances of return to origin in a number of ways. The system triggers alerts to consumers with a live tracking link and ETA information. It increases the chances of customer availability at the time of delivery and boosts the first-attempt delivery rate. The consumer can also request rescheduling deliveries at their convenience. All these features enhance the customer experience by 64%, shrink returns by 18%, and lower logistics costs due to reattempts.
Unified customer communication
Partnering with multiple 3PLs also risks exposing customers to diverse delivery updates from multiple sources that may not be positioned in the best ways to further the retailer’s interest.
Logistics management tools automate milestone-specific alerts to relevant stakeholders. Dynamic system-generated alerts ensure that the retailer, logistics company, rider, and end customers are on the same page regarding delivery progress. Such tools provide a unified and branded customer communication experience irrespective of the 3PL or logistics partner executing the last-mile delivery.
Arresting fake delivery attempts
Growing instances of riders using mock GPS locations to falsely mark delivery statuses is a concern. Intelligent courier aggregation dashboards display and track predefined delivery KPIs. The retailer can also verify non-delivery attempts with customers, especially when the system-suggested route and driver location do not match. It auto-checks out riders who use mock GPS locations while executing last-mile deliveries. Thus, it helps arrest fake delivery attempts.
Reduce load on IT teams
Automated logistics systems benefit from built-in APIs and reduce the load on engineering bandwidth needed to integrate new carriers. It also helps integrate multiple avenues like eCommerce portals, customer portals, ERP, etc., to ensure smoother business operations and quicker onboarding of 3PLs.
All these capabilities and features can help retailers gain greater control over logistics operations and enjoy a profitable festive season.
This article titled “How retailers utilize 3PLs to scale on-time deliveries during the festive season“ was contributed by Soham Chokshi, CEO and Co-Founder of Shipsy
About the author
Soham Chokshi is the CEO and co-Founder of Shipsy, India’s first and only end-to-end Global Trade and Logistics Management Platform that helps customers reduce logistics costs, achieve transparency, and improve on-time delivery of goods across the Ocean, Air, Rail, and Road with an intelligent approach. Under his supervision, the company has rapidly blossomed into a leading SaaS-based solution provider dedicated to reducing logistics costs and improving on-time delivery of goods across the ocean, air, and road transportation through its pioneering ‘Bloomberg for supply chain’ model. In his professional capacity, Soham spearheads the overall business growth of the organization.
His auxiliary responsibilities include ensuring revenue pipeline and ARR growth, maintaining key customer relationships, directing measures for brand amplification, ensuring a strong product roadmap, fundraising, investor relations, and overseeing key processes and initiatives for people development. Under Soham’s helm, Shipsy is fast developing as the preferred technology partner for logistics management for bolstering domestic and cross-border trade.