Heeding the Call of Shippers: What 3PLs must know to survive the e-commerce revolution

The track and trace race

The unhappy Macy’s couple example underscores one of the main logistics concerns shippers have: the lack of transparency offered by the forwarding community. “People want to know exactly where their packages are at all times,” Sciarrotta said. “It’s all about the trackability.”

Some of the best examples of track-and-trace technology are the systems that send customer a text or an e-mail when the package has been left at the door. “You cannot overcommunicate with the consumer,” he said.

Chris Cunnane, a senior analyst with technology research firm, the ARC Advisory Group, agreed that too often there is a lack of visibility into where an order is located across a distribution network. “Customers can see if their order has been processed, shipped, or is in transit, but there is not the level of granularity that is desired,” he said. “More visibility into the processing of the order and the different steps in the fulfillment cycle would go a long way towards making things more efficient.”

Bringing in third parties and location data can give the end-consumer better visibility into where their order is, and also gives the retailer and 3PL a more accurate delivery time to pass along to the customer, Cunnane added.

David Hudson, director, global retail and e-commerce strategies at UPS, added that there is an increased need for B2C fulfillment, “which is less predictable from an order flow standpoint. It can also drive fluctuations in inventory turns and certainly brings a greater seasonal spike than most B2B models.”

E-commerce has also heightened the need for fulfillment for small- and medium-sized enterprise (SMEs), Hudson said. “3PLs traditionally served and sought larger, high-order volume merchants,” he said. “E-commerce benefits these merchants because they can market and sell to more consumers than ever before. However, the rise of demand for both speed and low cost has forced SMEs to make hard choices. Do they expand their physical footprint, absorb the cost of premium transportation services to meet the demand for speed, or look for outsourcing fulfillment options?”

Another factor involving transparency is security of the shipments – the so-called “porch pirate” phenomenon, in which deliveries are stolen off porches or out of mailboxes after the last-mile delivery is made. Sciarrotta said RLA estimated that about 11 million packages in the United States were stolen in this manner in 2017 alone. While integrators like DHL, and technology companies like Google and Amazon, are experimenting with various options, such as secured lockers, car-trunk delivery and remote unlocking/locking of customers’ doors, these technologies are in the early stages.