Executive Briefings

Driving Innovation in 3PL Relationships

To retain and keep profitable customers in today's economic environment, 3PLs must provide innovative solutions that make the supply chain more efficient for both the customer and the provider, says John Dillon of APL Logistics.

People often assume that a constricted economic climate chokes innovation, but the opposite is actually true, says Dillon, director of supply chain technology solutions at APL Logistics. "A down economy pushes us to find better ways to do things, to save money for our company as well as for our customers."

Dillon points to APLL's collaborative transportation solution ShipMax as an example. This is being used by companies that serve many of the same big box retail stores. "Over the years these retailers have asked our customers to ship smaller orders, more frequently, which has pushed their transportation from TL to more expensive LTL at a time when fuel costs are rising and we have a difficult economy," Dillon says. APL Logistics responded with a new service offering that matches shippers that are shipping from similar locations to the same or similar destinations. "So instead of our one customer having to ship smaller orders LTL, we can combine them with other customers, who are being required by the same ship-to retailers to do the same thing." This program not only moves freight from LTL to TL but also makes the TL moves more efficient, he says. "This is a great situation. Our customers win, we win because we provide value and a compelling reason for these customers to stay with us, and their customers win because the ship-to destination receives one truckload with maybe eight orders as opposed to multiple LTL shipments with one order each." The economy wins as well, he adds.

Dillon acknowledges that co-loading is not new. "The innovation is in putting together solid trading partners with large, consistent volumes that are going on the same lanes to the same customers, which allows us to build a program with maximum benefit," he says.

Third-party logistics providers are in an ideal position to provide this type of service. "We can broker a relationship with multiple shippers, even competitors, because one doesn't necessarily need to talk to the other - we are the point of contact." Additionally, a 3PL can invest in the solution once and use it for multiple customers, reducing the cost per customer, he says.

Convincing shippers to collaborate on transportation moves was not a problem, says Dillon, but finding the right combination of shippers in the right lanes takes some work and requires a strong suite of technology products. "You also need the internal skill sets to configure these applications to be flexible and perform tasks outside the norm," he says. In addition to ShipMax, APL Logistics has developed a shipment optimizer called LoadMax and a multimodal optimization tool that uses the same technology.

"We are finding new ways to do things every day," Dillon says. "Oftentimes these are internal cost-cutting measures, but they all are innovations and they all count. Sometimes something as small as a different process in a DC can make a big difference to a customer."

To view the video in its entirety, click here


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People often assume that a constricted economic climate chokes innovation, but the opposite is actually true, says Dillon, director of supply chain technology solutions at APL Logistics. "A down economy pushes us to find better ways to do things, to save money for our company as well as for our customers."

Dillon points to APLL's collaborative transportation solution ShipMax as an example. This is being used by companies that serve many of the same big box retail stores. "Over the years these retailers have asked our customers to ship smaller orders, more frequently, which has pushed their transportation from TL to more expensive LTL at a time when fuel costs are rising and we have a difficult economy," Dillon says. APL Logistics responded with a new service offering that matches shippers that are shipping from similar locations to the same or similar destinations. "So instead of our one customer having to ship smaller orders LTL, we can combine them with other customers, who are being required by the same ship-to retailers to do the same thing." This program not only moves freight from LTL to TL but also makes the TL moves more efficient, he says. "This is a great situation. Our customers win, we win because we provide value and a compelling reason for these customers to stay with us, and their customers win because the ship-to destination receives one truckload with maybe eight orders as opposed to multiple LTL shipments with one order each." The economy wins as well, he adds.

Dillon acknowledges that co-loading is not new. "The innovation is in putting together solid trading partners with large, consistent volumes that are going on the same lanes to the same customers, which allows us to build a program with maximum benefit," he says.

Third-party logistics providers are in an ideal position to provide this type of service. "We can broker a relationship with multiple shippers, even competitors, because one doesn't necessarily need to talk to the other - we are the point of contact." Additionally, a 3PL can invest in the solution once and use it for multiple customers, reducing the cost per customer, he says.

Convincing shippers to collaborate on transportation moves was not a problem, says Dillon, but finding the right combination of shippers in the right lanes takes some work and requires a strong suite of technology products. "You also need the internal skill sets to configure these applications to be flexible and perform tasks outside the norm," he says. In addition to ShipMax, APL Logistics has developed a shipment optimizer called LoadMax and a multimodal optimization tool that uses the same technology.

"We are finding new ways to do things every day," Dillon says. "Oftentimes these are internal cost-cutting measures, but they all are innovations and they all count. Sometimes something as small as a different process in a DC can make a big difference to a customer."

To view the video in its entirety, click here


Keywords: supply chain, it supply chain, supply chain management, it supply chain management, supply chain management it, supply chain management scm, inventory management, inventory management it, value chain, value chain it, 3pl, transportation management, third party logistics, logistics management, logistics & supply chain, logistics services, supply chain solutions, inventory management systems, logistics it solutions, supply chain planning, supply chain systems, transportation management systems, supply chain services, retail supply chain