Third-Party Logistics is a massively growing industry worldwide. As per Grand View Research, the global 3PL market size is expected to reach $1.2 trillion by 2025, with a CAGR of 7.5%. Considering the demand for 3PL services, players in the industry are investing in technology-driven logistics management software to bolster their tech portfolio. 3PL providers are leveraging disruptive technologies to enhance their distinctive competencies.
Bleeding edge technologies have triggered Industry 4.0, a data-driven approach that thrives on information management and mining it to automate processes and pace up end-to-end business cycles. In this scenario, AI, machine learning, blockchain, IoT that are shaking up the old way of doing trade, are also bound to spill-over into the logistics industry in general and third-party logistics business in specific.
- Artificial Intelligence: AI will trigger a new data-driven approach in logistics management software especially for 3PL companies, known to be characterized by uncertainty and volatility. Combined with machine learning technologies; it will help make strategic decisions driven by actionable intelligence and have a positive impact on efficiency, speed, and service quality.AI, when integrated as a technology in 3PL software, facilitates real-time data exchange for the entire shipment lifecycle. AI-driven tools are augmenting human capabilities in supply chain and logistics by facilitating high-speed data-driven actions. For example, AI technology like natural language processing, can extract mission-critical information from numerous invoices generated by different partners across the supply chain of a 3PL company.
- Robotic Process Automation (RPA):According to McKinsey Global Institute, “transportation-and-warehousing industry has the third-highest automation potential of any sector. Contract logistics and parcel companies particularly stand to benefit.” RPA is fueling the rapid growth of next-gen 3PL companies by augmenting their order-fulfillment capabilities, facilitating shipment scheduling and inventory tracking, route planning, and a multitude of activities. Crete Carrier Corp., a trucking service provider to Walmart, uses 400 robots that run more than 1 million executions yearly to track actions like transit distance, availability of vehicles and drivers, delivery hours, pick-up and drop-off points and choosing delivery slots. Interestingly, only 3 humans are deployed to take care of the entire RPA platform. Similarly, Amazon employs more than 100,000 warehouse robots that have enabled cost saving of 65%.The Port of Rotterdam is an ideal example showcasing how automation has transformed their logistics and warehouse management. The container cranes at the port are unmanned and fully automated to load and unload the ships, thus enhancing human capabilities and reducing operational costs. The technology center of ODW Logistics, a 3PL provider, is equipped with technologies like barcode scanning, manifesting software, static and in-motion scales, box dimensioning equipment, print-and-apply labelers, and sortation capabilities indicative of how automated mechanisms will drive next-gen 3PL firms. Their reliance on automation for warehouse management, product handling, packaging facilities, and transportation systems has been increasing rapidly.
3PL software integrates Robotic Process Automation at the Port of Rotterdam
3PL companies are getting a clear picture that RPA can efficiently handle repetitive and structured tasks without errors. They will turn towards robotics to improve their competitive position in the industry while serving their customers efficiently.
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When we asked Lynn Smith, VP for the Supply Chain & Logistics Management Software business unit at Katalyst Technologies about the advanced technologies that can be integrated into 3PL software to help third-party logistics providers be more efficient in 2020, he explained,
When we asked Steve Foley, CEO at Bulk Memory Cards about the advanced technologies that 3PL providers can bank on in 2020, he stated, “IBM recently launched its Quantum service, which is the one to look out for in the logistics management software space. Logistics is basically the traveling salesman problem, an NP-Hard problem which can be solved through Quantum.
“Some less esoteric technologies integrated in logistics management software are blockchain and loT. Blockchain for ledgers as well as transactions and loT in advanced tracking, such as environmental and other data monitoring are already being used by some leading 3PL companies.”
Moreover, cognitive automation, a combination of AI and RPA, is making business processes intelligent and empowering 3PL companies to make well-informed decisions, thereby creating a positive impact on the ROI. RPA automates tasks by copying massive volumes of data without human efforts, whereas AI extracts insights from the data received from RPA. Once AI classifies the data, RPA can generate documents like bills, invoices, and execute payments for end-users.
