The position medium-sized logistics providers find themselves in today reminds me of the scene from “Star Wars” set in the Death Star’s garbage compactor. Luke Skywalker, Han Solo, Princess Leia, and Chewbacca become trapped between two walls that steadily closed in on them. Their situation appears helpless!
Medium-sized 3PLs - Trapped Between Two Pressures
|Image by Star Wars Wikia / CC BY-SA|
Similarly, medium-sized 3PLs find themselves under increasing pressure on two sides: by the industry giants with thousands of employees and deep pockets on one, and by smaller, nimbler companies on the other. But just like R2-D2 came to the rescue in “Star Wars,” they can turn to tech - particularly new logistics technology solutions, to help avoid and escape the crush.
New Logistics Technologies Level The Playing Field
The largest companies like DHL and FedEx can provide shippers with a compelling mix of technology, expertise, and managed services. These companies have thousands of employees, can afford to invest in developing their technology products and services, and can scale to work with businesses of any size. The small logistics providers focus on niche markets; their size enables them to be agile, and focus on providing high levels of customer service.
Medium-sized 3PL companies become stuck in the middle. It’s more challenging from them to offer the same personal level of customer service of that of their smaller competitors. Meanwhile, shippers have come to expect them to provide the same technology products and services that the most significant companies do. However, they don’t have the IT expertise on staff or budgets to invest in the necessary IT infrastructure; creating a 3PL Technology Gap: the difference between what shippers feel is essential, as is how they rate their 3PLs’ current IT capabilities.
Closing The Logistics Technology Gap
Closing that gap is critical to long-term growth and success. As companies continue to collect ever-growing volumes of information, a.k.a. “Big Data,” logistics managers want their 3PLs to help them analyze that information to improve their decision-making processes.
Fortunately, the maturation of public cloud computing platforms makes possible the creation, and implementation of new logistics technology solutions; 3PLs can leverage to overcome the four most common obstacles to closing the technology gap:
Fear of long-term investment.
Lack of in-house expertise.
Insufficient or outdated technology.
In Four Common Obstacles to Supply Chain Digitization, I examine these four challenges in more detail and explain how to overcome them within your organization.
To Build Or To Buy?
However, if you are eager to find out whether implementing new logistics technology is the right decision for you, I have good news! We’ve just published a new white paper, “How to Close the 3rd Party Logistics Technology Gap,” that will help guide you through the decision-making process.
And in the words of Yoda - “Try not. Do... or do not. There is no try.” But if you decide to do nothing, then may the force be with you.