3PL Software: How it Improves Delivery Operations & Features Businesses Need To Look For

Rapidly growing volumes of online deliveries, ensuring on-time deliveries and the need to make logistics cost-efficient are driving enterprises to outsource their delivery operations. Hence, emerges the need to embrace advanced 3PL software. Traditional means of managing logistics parters are rapidly becoming redundant as complexities and customer expectations increase. 

Maintaining lengthy spreadsheets, manual calls to drivers, guessing estimated arrival times and sharing the same with customers are major roadblocks that make managing outsourced logistics processes inefficient. Poor delivery productivity, increasing transportation risks, lack of fleet visibility, inaccurate performance benchmarking, rising overhead expenses and more are results of inefficient 3PL management. 

The whole logistical process could also get a tad bit difficult when the e-commerce companies expand. With the growth of a company, the whole management of the supply chain becomes more challenging and cost-intensive. This could, eventually, cause companies to commit major mistakes that take them down in terms of customer satisfaction. If this whole nuance is left unchecked for too long it can also cause a dip in the overall growth of the businesses, eventually lowering the ascertained profits. So, at times it better to leave the job to the experts, in this case, 3PL providers. But again, one needs efficient tools to ensure that 3PL’s are actually driving greater logistics value for an enterprise and not adding to existing complexities. Hence, emerges the need to embrace a 3PL management system.

What is 3PL software? 

Third-party logistics software or 3PL software is a gateway to highly efficient logistics management. Driven by cutting edge technologies like machine learning, business analytics, predictive intelligence, IoT and cloud computing, it helps businesses to track, trace and optimize 3PL operations right from the time an order is picked up from a warehouse till it’s delivered to the end-customers. Actually, it does not end there. Such software also empowers brands to seamlessly manage returns. 

Modern 3PL systems also help businesses provide their customer with end-to-end transparency of the delivery process. Information like when a package shipped, when it’s out for delivery, who is going to deliver it and when will the package be delivered are all made available to customers that too as and when it happens.

Three Core Logistics Functions That 3PL Management System Can Improve

The kind of services offered by 3 PLs is not standardized. It depends majorly on the independent 3 PL company as to what they specialize in and what kind of services they have to offer. However, the most common types or areas of functions and services that almost all 3PL software solutions can improve are as follows-

  • Transportation services focused on handling and movement of inventory between manufacturers and buyers or between a standalone e-commerce business and the buyers.
  • Warehousing and distribution services that comprise storage, picking, dropping, shipping, and returns.
  • Financial and information services that deal with a range of offerings like accounting, cost control, freight forwarding, inventory tracking, and management, etc.

How a 3PL Management System Improves Delivery Operations

Modern 3PL freight software improves warehousing operations, ensures faster pickups, enhances shipping operations and improves customer service by enabling efficient returns management.

1. Receiving Inventory

This is step 1 because there cannot be a step 2 or 3 without ascertaining an inventory that needs to be forwarded. A 3PL warehouse receives the company’s inventory and then stores the products in their own warehouse before shipping it out to the end consumer. A 3PL management system quickly sends out an alert to the said delivery partner regarding an order being placed for an item available at the warehouse.

2. Picking

When a customer places an order for a commodity on a website, the process is called ‘picking’ in logistical terms. Once an order is placed by a customer, the 3PL company receives the order from the business. A 3Pl software solution looks for available executives and assigns a pickup task to ensure the order is forwarded efficiently of shipping. Once the order is appropriately packaged, such software also helps warehouse executives intelligently label the order before it is sent out for delivery.

3. Shipping

After packaging obviously comes shipping. This is when the order commences the last-mile journey and finally reached the end-customer. A 3PL management system helps businesses drastically improve the final leg of delivery by ensuring 100% visibility of 3PL vehicles. It immediately raises red flags in case of unnecessary stoppages or delays. It generates highly accurate ETAs and empowers enterprises to ensure that a 3PL provider is following service-level-agreements. This in turn drastically improves 3PL performance management in the long run.

4. Returns

The last step, albeit optional, is returned. Though returns do not happen with all delivered orders, the way a return is handled could act as a major determinant of customer satisfaction. The efficiency at which a 3PL is able to manage the returns of products goes a long way in actualizing customer delight. Modern 3PL software providers help brands quickly capture the reason behind a return and gain first-hand insights into customer feedback.

Best 3PL Software: 8 Key Features

Today’s best 3PL software should have capabilities that directly help enterprises not only enhance 3PL management but also optimize transportation costs, ensure faster deliveries, drive data-driven decision making, boost customer experience and achieve much more.

1. Intelligent Routing

A 3Pl solution should be able to automate route planning based on multiple variable factors like weather, traffic, delivery urgency, empty miles, fuel consumption and delivery productivity. It needs to keep feeding delivery executives with routes that optimized in real-time based on existing scenarios. 

2. Automated Scheduling & Task Allocation 

Advanced 3PL software automatically schedules a delivery task, based on the kind of delivery, beforehand to save time. It also automatically allocates delivery tasks to executives based on their KPIs through via a mobile application.

3. Real-Time Tracking and Tracing 

The best 3PL software will empower brands to gain a minute-to-minute update on how a 3PL provider is proceeding with a delivery task. It gives real-time information on a delivery vehicle’s location, whether it’s indulging in unplanned stoppages or unnecessarily causing delays, what’s the ETA of the vehicle to its final destination, so on and so forth.

4. Generate Predictive Intelligence

Advanced 3PL freight software is powered by machine learning algorithms that enable logistics stakeholders to know in advance if delivery will be made early, on-time or it will be delayed. 

5. Intelligent Carrier Selection

There are a plethora of 3PLs or carriers available in the market to choose from, but understanding which one is best suited for the particular delivery job might be a daunting task. Modern 3PL software enables enterprises to connect with different carriers based on the contract price and load type. Such software easily manages complex rate contracts, transport capacity matrix and time window agreement of different carriers across different regions. An advanced 3PL management system supports exhaustive constraints like carrier rate contracts, transport network model, routes, pickup/delivery windows, tonnage and more while analyzing available carriers.

6. Risk Purchase Capabilities

Modern 3PL freight software drives Spot purchase bidding capabilities that empower enterprises in getting real-time quotes from logistics partners for handling peak volumes and carrier unavailability exceptions. This eliminates the risk of favouritism and the high cost of transportation.

7. Stakeholder Communications

Such software drives seamless communication across disparate delivery stakeholders. It ensures that the right information is available to the right person at the right time. In case of emergencies and exceptions, 3PL software can expedite ticket resolution processes by triggering alerts meant for senior management.

8. Crowdsourced Delivery

It might so happen that despite having an in-house delivery fleet, during peak businesses hours or season a brand might find it difficult to scale delivery operations owing to capacity constraints. In this case, a 3PL management system can quickly scan across the gig-economy to look for temporary or part-time delivery executives. Based on KPIs like productivity, cost, proximity, delivery type, turnaround-time and more, 3PL software onboards drivers to temporarily scale delivery operations. 

You might feel a little overwhelmed with all the information in this blog and might also be convinced that 3PL management is an expensive, complicated affair; however, with the right tools in place 3PL management becomes extremely easy. Modern 3PL software boosts the effectiveness of outscouring delivery operations and helps select the right partner for the right job. FarEye’s 3PL management system is empowering global businesses to achieve never before seen logistics efficiencies in the guise of optimized costs, delightful deliveries, enhanced 3PL provider’s productivity, greater volumes of on-time deliveries and more. To know how you can signup for a quick demo here.