Ecommerce Retailers: Thinking of Integrating With Your 3PL? Read This.

In Wednesday’s blog, Logistics in 2016: The Year for Online Supply Chain Optimization, we talked about the constantly changing demands and challenges supply chains face and how industry technology evolves with them. We also explained the effect big-name technology companies like Amazon and Uber have on the logistics industry.

While phrases like disruptive technology and uberization glamorize the industry, it’s important to remember the “little guys” of logistics technology as well – most importantly, integration technology.  

3PLs are oftentimes referred to as change agents within their customers’ businesses. They must flex with the changing demands and challenges their customers face. This is especially true when it comes to integration technology. Although, with popularity among different platforms changing every year, and those platforms updating sometimes every month, it can be difficult for even logistics providers to keep up.

For example, when FreightCenter completed market research to determine which ecommerce platforms were most useful to its customers Magento, WooCommerce and GoDaddy were found to be the most popular. We developed SaaS-based options around those platforms which allowed our customers that used those platforms to easily integrate their ecommerce sites with our technology.

“Today is a whole different story. With platforms like Shopify, Volusion and Bigcommerce gaining in popularity, it has become difficult to determine which platforms we should devote our resources to,” says FreightCenter’s Senior Marketing Manager, Terese Kerrigan.

The popularity of platforms isn’t the only concern; however, keeping up with each platform’s updates is a battle within itself.

“The main issue we face is having the staff to dedicate towards keeping the ecommerce tools up to date,” says FreightCenter’s Software Support Specialist, Justin Raynor. “When an ecommerce platform releases an update, it can break our web-service connection string which can then prevent our clients from receiving rates.”

FreightCenter is one of the few logistics providers that has its own in-house software development team. Justin supports the team of six in determining necessary updates to FreightCenter’s integration software and is responsible for ensuring customers receive quality product. He’s the first point of contact for customers interested in integrating with our technology.

His number one tip for ecommerce retailers wanting to integrate with their 3PL’s technology?

“Do your research. Know exactly what product and services you require.” You can then take this information to your 3PL and they can help you decide which integration is most useful and whether or not they can support it.  

What ecommerce platforms do you use? Do you have experience integrating your platform with your 3PL’s technology? Share your thoughts.

Logistics in 2016: The Year for Online Supply Chain Optimization

We’re barely halfway through the year and there’s already a couple hot topics circulating around the logistics industry. 

For starters, there’s the uberization of freight. An idea that stemmed from the founding father of disruptive technology: Uber. Before we delve deeper into what a mobile app has to do with freight, I first want to introduce one more trending topic. That’s ecommerce giant, Amazon. 

Amazon is slowly joining the logistics party by creating the most powerful in-house supply chain management out there. Amazon just signed a contract with Atlas Air Worldwide which will allow the company to try its hand in air freight delivery. It’s also requiring seller-fulfilled Prime shipments to be shipped using only Amazon Logistics, further solidifying internal control over its supply chain. And, we can’t forget to mention the effect Amazon Prime has had on the logistics industry. 

There’s few ecommerce companies that have the resources it takes to manage their supply chain using in-house logistics as efficiently as Amazon. You would need a whole fleet of planes, trains and automobiles to get even close. So, how do online retailers optimize their supply chains when they don’t have the resources to do it in house? They turn to third-party logistics companies (3PLs). 

This year, 3PLs are paying closer attention to the needs of online retailers. Which is a smart move considering the fact that ecommerce sales made up 7.5% of retail sales in 2015 and are continually rising. 

3PLs offer many benefits: access to more carrier resources, and therefore better negotiated rates due to purchasing power; experts that understand the ebb and flow of the industry; logistics technology or transportation management software (TMS), and much more. But, most logistics providers, especially those who have been around for decades, are used to providing services for more “traditional” shippers like manufacturers and brick-and-mortar stores. That’s why many 3PLs are improving and expanding their services. 

For example, this year FreightCenter made several changes to its business strategy that would improve an area where they were previously lacking: repeatability. Up until recently, the business of outsourcing logistics has traditionally been transactional in nature. FreightCenter realized, like many other 3PLs, that transactional services aren’t enough to optimize the supply chains of ecommerce retailers. 

“As a logistics company, we must act like change agents within our customer’s business, whether it be a brick-and-mortar store or an online shop. We must be able to flex with the changing demands and challenges they have,” explains FreightCenter CEO, Matthew Brosious. 

That’s why ideas, such as the uberization of freight and the Amazon Prime effect on logistics are such hot topics. 

The uberization of freight would connect supply and demand in trucking with just a few taps on a mobile device. This concept is motivating logistics and trucking companies to explore mobile service options. 

FreightCenter, for example, is in the midst of testing a new mobile-friendly website and quote system that will allow customers to access FreightCenter.com and all of its features on their phones and tablets. This move brings the company one-step closer to creating a mobile app that could do the same. 

An Uber-like app might not be the answer for FreightCenter or other similar companies, though. Logistics companies and larger carriers develop established relationships that a mobile app can’t replace. This means the key audience for mobile trucking apps are more likely to be smaller carriers that lack the means to find freight and smaller businesses who don’t need long-term relationships to meet their shipping needs. 

Online retailers usually spend somewhere between 6-10% of their operating costs on logistics, and logistics has a direct impact on a customer’s experience. This means it’s important for online retailers to optimize their supply chains. With the direction logistics is headed this year, they’ll have more options than ever to make that happen. 

Do you think the uberization of freight is the answer to optimizing the supply chain? If not, what other types of disruptive technology options do you think would benefit the industry? Leave a comment below with your thoughts.

Online Retailers: Top 5 Benefits of Using a 3PL to Manage Logistics

If you thought 2015 was a busy year for your online business, you’re not alone. According to the Quarterly E-Commerce Report, ecommerce sales continued their steady climb making up 7.5% of retail sales by the end of 2015. Compare these figures to the end of 2003 when online sales made up only 1.8% of all retail sales and it’s easy to see that online retailers can continue to expect an increase in sales well into the future. 

What can online retailers do to ensure they can meet growing demand? The answer lies in logistics. Whether you’re organizing shipping for a small online store or a large ecommerce supply chain, logistics management is crucial to streamlining your operations.

To streamline your transportation you can either use your own in-house transportation management team or outsource with a 3PL. The benefits of either option will be dependent on the size of your supply chain and your company’s specific needs.

Greentec Auto rebuilds hybrid car batteries. They have 11 locations throughout the country where they can service electric cars and build their batteries, but they also sell their products across the world through an online store. When Vice President of Greentec, Daniel Razumovsky was tired of wasting time comparing shipping rates and filling out paperwork he turned to FreightCenter. Outsourcing with a 3PL turned out to be a much more time and cost efficient strategy. Now between their many locations, Greentec ships batteries almost weekly through FreightCenter and they continue to reap the following benefits of using a 3PL to manage their shipping logistics.

1. Cost Reduction: Shipping volume is a key driver of freight shipping rates. Many small and mid-size online retailers are at a disadvantage when it comes to negotiating rates. 3PLs have the buying power of their entire customers’ freight volume. 
2. Smoother operations and technology: A 3PL can provide advice on packaging, including crating services. They also provide ecommerce retailers access to best in class technology that provides benefits like order optimization and delivery performance reporting.
3. Routing optimization and flexibility: Each order you ship – from a single LTL shipment to a truckload – can be optimized. A 3PL has the perspective to see the opportunities to consolidate orders. The flow of logistics data into other company systems is vital as well. Tracking and managing Cost of Goods Sold (COGS) and other important metrics are made easier when logistics data can be integrated with other company systems. 
4. Complexity of international shipping: Since most online retailers do not make what they sell, many have built a supply chain that involves importing products from overseas to save on costs. International shipping is very complex and involves a lot of complicated requirements and other entities that include customs brokers, different modes of shipping, and lots of rules and regulations. 
5. Omni-channel and inventory management: Retailers are now seeing the need to potentially share inventory across channels (like between online and brick and mortar stores) to make sure product is always available to customers – regardless of how they are trying to buy it. A 3PL can provide inventory tracking tools to make sure you have the visibility – and ability – to get the inventory you need when you need it.

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Check out the Go Daddy Freight Shipping FAQs for more information on how to offer freight shipping through the online checkout process.