Any discussion of whether Amazon is turning into a third party logistics provider (3PL) can officially stop, because there’s no doubt anymore that it is a 3PL. Amazon has added freight services, brokerage services (Amazon Brokerage), planes and trucks – and it’s locked up a significant percentage of truckload capacity. In a similar vein, the growth of Uber Freight is raising eyebrows as it expands among owner-operators; a segment that’s long been ignored, even if it’s the largest in the trucking market.
While Amazon or Uber Freight could reasonably be viewed as threats by logistics service providers (LSPs), it can also be argued that they’re waking up the market to more innovative ways of operating. The challenge for 3PLs, freight brokers nad LSPs will be in figuring out how to differentiate their transportation management services.
Technology will clearly play a big role in this effort, and it’s one important way that 3PLs, shippers, and brokers are focusing on how to compete and be efficient. If you’re one of these companies, you can’t risk ignoring or dismissing what Amazon or Uber are doing; you need to figure out a response.
Take a hard look at your tech stack.
- Do you have tight integrations for customers?
- Do you offer portals?
- Are you exceeding customer expectations when it comes to ease and visibility?
Your transportation management system (TMS) needs to be in this best-in-class tech stack. Supported or enabled by technology, which capabilities are most important for success right now? What’s important to plan for further down the road?
3PLs and brokers are in the business intelligence business just as much as the moving freight business. It’s critical to have the right technology for measuring what you’re doing. You don’t necessarily need data to slice-and-dice in a million ways, but you do need to be able to track key metrics and develop a scorecard that helps identify operational areas to improve.
This is where a TMS software platform and integration hub can help, too. It operates as the foundation of your enterprise software, bringing together order data, warehouse data, carrier data, cost, finance, and customer data all into one data model, cleansing it, and then putting your business model on top of it.
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