To Visibility and Beyond: Overcoming 3PL/LSP Challenges in 2022

The last few years haven’t been without their challenges. Supply chain disruptions catapulted our industry to the tip of the public’s tongue. And the ride isn’t quite over yet. As we’re rearing our heads above water, 2022 presents a whole new set of challenges for 3PLs and LSPs.

But luckily, Fourkites’ already started to find solutions to these predicted struggles. 

Today we’re bringing you an exclusive perspective from Raj Patel, VP of Industry Strategy, 3PLs.

By the end of this, you’ll understand the three pressing challenges for third-party logistic providers (3PLs) or logistic service providers (LSPs) and Raj’s key insights on how to overcome them.

Current Supply Chain Trends for 3PLs and LSPs Are Creating New Challenges

It’s hard to nail down all of the obstacles facing the industry. But Patel offers 3PLs and LSPs three key areas to pay attention to.

  • Labor. Supply chainers will be the first to tell you that labor’s been an issue. So, it’s important to pay attention to how you’re using your current labor, how you recruit, and how you retain. It’s about balancing your labor compared to robotics and having visibility to where your labor is.
  • Cost. We’ve heard about inflation – but who actually pays for the rising costs? Have a plan in place to understand where this increase flows.
  • Innovation. The future is here and it’s about time to think about how robotics (autonomous vehicles, picking, etc.) fits into your business, how your supply chain affects environmental, social, and governance (ESG) goals, distribution center locations and implementable technology.

Blowing in with the trends listed above are the new services having to be offered by 3PLs and LSPs. They’re stepping out of their comfort zones, and we’re here for it. 

Value-Added Services are the New Black

Industry changes mean a new dynamic of operations. In order to keep up with the waves of change, logistic providers are having to roll up their sleeves and offer new services. 

Being innovative with what you provide to clients is going to add a significant amount of value to your business and customers. 

Historically done in field-stocking locations, logistic providers can determine where warehouses are needed to reach 90% of the U.S. population. . 3PLs are making more logical, logistical choices. But they still need more, smaller microfufillmment centers in order to reach 90% within the one-day delivery consumers expect. 

So how can they get there? With the help of artificial intelligence/machine learning. 

And while LSPs have usually stayed in their own lane with basic monthly forecasts, Patel tells us they’re now pulling up a seat to the table with their client’s marketing, sales, and operations teams. 

Why? 

For visibility in planning in order to identify which products are super important. Are there campaigns that will affect planning? 3PLs are starting to get their hands dirty in this essential execution process. The result is a smoother start-to-finish, higher sales, and increased customer satisfaction. 

Mitigating Risk in a New, Risky World

“The new normal.” “Unprecedented times.” Just a few of the buzzwords our team at LTSC hears all the time. Along with “agility” and “resilience”

But Patel stresses to us that this agility and resilience always comes with a price. For example, in order to be agile and resilient, you might have to be tripled-sourced which will come at a cost to your overall supply chain.

That safety-stock and extra inventory that was once frowned upon is now expected. A question probed by Patel, “What if the war in Europe doesn’t end? What if the Suez Canal happens again?” It’s these sort of world events that we’re not used to that we now, well, have to get used to.

In order to mitigate risk, Patel also encourages you to know your suppliers and vendors—and who they’re getting their materials from. In essence, don’t put all of your eggs into one basket.

Micro-fulfillment centers (MFCs) and other strategies can deliver you to agility and resilience, but beware of that fine balance between cost and risk. 

Visibility is Good, But Actionable Visibility is Better

Gaining visibility to your supply chain is one thing. And while the ability to see where your container is at sea or on the road is possible, Patel argues that having actionable visibility is a whole other storm. 

Because really, what is it exactly that we might do with that visibility once we get it? Fourkites’ visibility platform allows companies to identify implementable strategies and make confident, prosperous decisions through tons of predictive analytics and machine learning. 

It’s something I can get behind—no more guessing, no more surprises. We’ll always find ways to pivot, supply chainers! So let’s go to visibility and beyond!

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