13 Jun How Technology has Impacted the 3PL Industry over the Last 10 Years
As a part of our Mactrans 10 for 10 series, we will look at how technology has impacted the 3PL industry over the last 10 years. The world we live in today is awash with rapid technological development, and industries around the globe are rapidly evolving in tandem with changing consumer expectations. The 3PL industry has been no exception, as the modern supply chain is subject to countless complexities and expectations that didn’t previously exist. As we look to the rapid growth of e-commerce and small business infrastructure, along with emerging markets around the world, the logistics industry has, perhaps, never been more integral to the continued success of a business. Also, companies who couldn’t afford complicated and expensive tracking systems for freight are also now able to affordably track shipments for their customers with pay as you go smartphone apps from various technology providers
Much like the evolution from Blockbuster to Netflix, the third party logistics industry has transformed from simple transportation and warehousing companies to full-service, digitized and specialized transportation management. We are no longer just moving pallets or putting products on trailers; the transportation of goods requires a greater standard of care and an enhanced level of transparency across every touch-point of the supply chain. This speaks to an industry-wide shift that is powered by new-age technology — namely, load tracking technology which allows companies of all sizes to provide the same type of technology solutions of the large 3PLs. Freight visibility has become an outright demand across the shipping process, as businesses rely on the real-time update of information involving their shipments. With this in mind, it’s become imperative for 3PL companies to invest in load tracking technology that grants access to more data points across the supply chain. This trend comes as no surprise, as the appetite for data (both from a consumer and supplier perspective) grows under the influence of technological advancements. As disruptive players continue to expand into our industry, we realize a mounting responsibility to provide real-time updates and information to current and prospective customers. Fortunately, with the help of load tracking technology, we can offer clients complete transportation transparency while utilizing real-time information to reroute trucks when needed, make adjustments along the supply chain and improve efficiency. Simply put, this creates the more efficient, in-depth end-to-end shipping process that modern businesses and consumers expect.
So, what do these load tracking systems look like? There are two primary methods utilized by 3PL companies to track loads efficiently: EDI (Electronic Data Interchange) and API (Application Programming Interface). While both solutions allow companies to communicate data from system to system, it is important to note that they have their differences. EDI is the traditionally popular choice, which requires the exchange of data from computer-to-computer, while API relies on a cloud-to-computer exchange. In layman’s terms, EDI offers businesses a secure way to send data using standardized electronic formats, while API serves as an interface between software programs that can transfer data in less than a second. EDI adheres to industry standards, while API can be customized to each individual customer. Further, EDI utilizes batch flies, while API utilizes individual transactions.
Both EDI and API, while different, allow 3PL companies to increase communication speed and meet heightened customer expectations. While some companies may discount EDI as a more rigid load tracking solution in comparison to the cloud-based flexibility and affordability of API, EDI remains a competitive option for large corporations. Ultimately, API is earmarked by affordable innovation and efficiency, while EDI offers robust security and industry-backed reliability. While the industry-wide discussion has, for years, centered around the proposed dissolution of EDI technology, the focus should instead be on the utilization of both for enhanced freight visibility. Not only is the technology (finally) affordable, but it is more accessible than ever before. With both EDI and API capabilities, we can ensure a customized tracking solution that is tailored to the unique requirements of each client.
As previously mentioned, pay as you go app-based tracking software has made tracking full loads more affordable. Load tracking software from providers like CX North America, Macro Point and Four Kites are cost-effective options for companies of all sizes. Real-time freight tracking and notifications are now a must in the 3PL industry, which includes pick-up and delivery notification and GPS tracking of the shipment throughout the entire move. This type of app base software has made it possible for 3PLs to provide real-time updates and still work with smaller carriers. As long as the driver has a smartphone real-time tracking is now available through these apps and 3PLs can integrate the data into their Transportation Management System.
The future of our industry is shaped around the on-going demand for carriers to remove the uncertainty around the shipping process. EDI and API technology has made rapid strides over the past decade, and together these solutions pave the way to a more cost-efficient, collaborative relationship between shippers and third party providers. As the logistics industry continues to adopt more agile, data-backed and automated processes, the potential for enhanced workflow management and supply chain efficiency grows exponentially.