June 17, 2021

Choosing the Right E-Commerce 3PL for Your Company

Miles Varghese
Miles Varghese
Helping independent freight forwarders/brokers better stay in-sync, collaborate, and improve operations with their shippers/clients. Co-founder & CEO @ Cargologik.com
e-commerce 3PL

Third-party logistics providers (3PLs) are collaborative networks that many e-commerce logistics procurement managers often utilize today, to get more done, when they may not necessarily have the large internal team or budget to handle the work with their own team. 

The role of the 3PL essentially entails overseeing and managing the supply chain platform. As providers focused on managing and optimizing the digital supply chain, e-commerce 3PLs, including freight forwarders, focuses on strengthening the supply chain network from end to end.  Their primary task involves allowing online stores to focus on marketing and critical business operations and sharing the ultimate goal – which is making their customers happy. 

In today’s competitive business market, and with the drastic rise and acceleration of e-commerce traffic, these kinds of services remain in higher demand than ever before. Customer expectations are also increasing exponentially. Last, we’re also seeing independent brokers and forwarders seeking to expand their organizational capabilities and roles into more international markets. 

And no matter where you stand, the sooner the better for these up-and-coming e-commerce brands to realize that they can do more, with “less”. That “less” being a function of selecting the right logistics partner, at the right time. It’s often in the early days that these critical decisions can define whether or not a new venture, such as a direct to consumer, or CPG company, is going to succeed or not.  It’s better to get those logistics bearings aligned earlier rather than later. 

Why the Right 3PL Is E-Commerce Ready

The demand for reliable and versatile e-commerce 3PL partnerships has mainly grown thanks to the push e-commerce has given to the global economy. More people than ever before are using online shopping, virtual ordering, and delivery services to meet their purchasing and shopping needs. 

According to Forbes, recent surveys found that only around 9% of U.S. shoppers, 8% of Japanese consumers, and 15% of United Kingdom customers claim to have never made a purchase online before the shutdowns of 2020. Yet, e-commerce has exploded with more people ordering online than ever before, pandemic or not.  

The modern customer has better, more affordable access to mobile devices and corresponding technology platforms like Shopify. Individuals can start building e-commerce brands easier, cheaper, and quicker than before and often can access large untapped consumer markets.  But those consumer markets also have higher demands regarding their “2-day shipping,” and instant updates of their logistics timeline. Factoring these concepts in, it’s no surprise that the world’s population was already gravitating towards e-commerce, and now doing so exponentially more than ever before.

E-commerce 3PL services, ranging from brokering through freight forwarders, have made it easier to meet these shifts in market demand and consumer needs, and these consumers will likely remain for some time to come. E-commerce is the way to the future, and supply chains that fail to embrace 3PLs and other technology-driven services will struggle to keep up and fund success in today’s e-commerce market.

Top Qualities to Look for in an E-Commerce 3PL

The value of third-party networking and outside support can influence the entire supply chain’s growth and profit margins. However, knowing what to look for in a partnership remains equally important. 

When choosing digital freight networks and partnerships, consider the following: 

  • Integration with significant shopping service providers and cart apps. Easier access to apps and services means customers can more easily make purchases. Platforms such as Shopify, WooCommerce, & Magento are great places to start.
  • Access to all transportation and shipping modes or options. Offering several shipping options increase customer appeal and can also boost delivery success rates. Often, the startup supply chain will start simple and become ever-complex and critical to the business with time. Thus, having a system that can cover those complexities overtime should be top of mind.
  • Ability to provide instant shipping rates based on real-time data trends. In a competitive market, rate differences of mere pennies can quickly add up. Leveraging a rate marketplace can get you the cheapest option, but not often the right one. 
  • Uses a SaaS-based platform to keep overhead costs and fees in check. Reducing fees and surcharges allows for improved returns and more significant profit margins overall. Freight forwarding platforms give your internal logistics teams superpowers when it comes to working with multiple LSPs.
  • Avoiding confusion by creating intuitive and easy-to-use digital dashboards. Collaboration is more straightforward when e-commerce 3PLs can easily connect and communicate along with a unified system of truth. Seeing your data can allow you to think more strategically and help make the right decisions.
  • Enables in-depth tracking and real-time updates for valuable loads. From pharmaceuticals to perishable goods, automated shipment tracking remains a vital component. Being able to present these updates in a way that’s easy to understand, to all key stakeholders, is also very important when it comes to tracking.
  • Empowers team members with automation and digital freight matching. Giving drivers and managers the power to self-regulate when possible boosts overall efficiency. Tap into the untapped market of truckers for example with SmartHop or Draying.io
  • Improved management of freight loads for short-term and contractual capacity. Domestic and international forwarding services improve significantly with 3PL collaborations. International has more moving pieces, and being able to put those pieces together to see the big picture matters.
  • Provides analytics to improve scalability and adaptability. Real-time response and efficiency during disruptions can mean the difference between success and failure. Timing is everything as they say, and the sooner, the better, in almost all business situations to plan for the optimal outcome.

Modern 3PL networking partnerships can help improve end-to-end visibility and performance within every area of the supply chain network. Knowing which traits and qualities to look for remains a critical part of forming a strong and mutually beneficial e-commerce partnership. 

Choose the Right E-Commerce 3PL Focused on Freight Forwarding to Thrive in the Global Freight Network

The need for third-party partners and providers continues to grow as freight management industry experts and freight forwarding managers across the globe search for a way to remain competitive. 

Utilizing the power, scalability, and flexibility of e-commerce 3PLs opens the doors for future growth and success within the supply chain network. Tapping into that vast potential of the global freight network requires acceptance and utilization of freight forwarding innovations, including 3PL and automated supply chain networks. Kickstart your e-commerce 3PL partnership by signing up for Cargologik and uploading your first 10 MBL’s for free today.

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