By John D. Schulz · August 17, 2020
Third-party logistics companies continue to expand their reach into shippers’ supply chains.
“Most 3PLs are continually looking for ways to create value for customers and build customer loyalty,” Evan Armstrong, president of Armstrong & Associates, told LM. “Much of it comes down to operational execution and performance.
Armstrong said digitalization and automation of operations can reduce errors, increase efficiency, and improve performance. “This is running across all of the 3PL segments,” Armstrong added.
He said in Domestic Transportation Management (DTM), 3PLs are building out digital freight matching platforms to more efficiently match loads to carriers in the spot market. There is also increasing use of visibility platforms tapping carrier tracking and tracing systems in multiple ways through APIs, ELD feeds, and GPS to automatically update 3PL transportation management systems (TMS) with shipment status information.
Back-office systems are supporting proof of delivery gathering and further automating carrier freight bill payment, Armstrong added. In warehousing and distribution, use of autonomous robots supporting warehouse workers in pick/pack operations and in inventory replenishment tasks is growing.
One recent example is RK Logistics Group, a Silicon Valley provider of warehousing, e-commerce fulfillment and supply chain management services. It recently expanded services for the U.S. operations of SOUNDBOKS, a Danish manufacturer of concert-quality, Bluetooth-enabled high-end portable speakers.
Copenhagen, Denmark-based SOUNDBOKS has been selling its battery-powered, Bluetooth-enabled portable speaker products in Europe and the U.S. for several years. As its U.S. business expanded, last summer it selected RK Logistics to be its exclusive third-party logistics partner for warehousing, e-commerce order fulfillment and transportation management for U.S. customers.
In another example, Ryder’s freight division integrated Trucker Tools’ “Book It Now” that automates load booking and streamline workflow for owner-operators and small fleets. That allows real-time visibility into available capacity and predictive freight-matching as well as enhancing load-match speed and accuracy, broker productivity and carrier satisfaction.
For shippers, it means expanded capacity choices at competitive rates, officials said.
“This engagement fully aligns with our strategy of engaging innovative, forward-thinking technology partners that can further enhance our service offerings,” Dave Belter, vice president and general manager of global transportation management solutions for Ryder, said in a statement.
“Trucker Tools delivers improved freight transparency and visibility for our shippers and carrier partners, as well as drives efficiencies and reduces costs, all while enhancing service levels through automation,” Belter added.
Ryder’s brokerage operation gives customers access to free, express quotes with competitive pricing and reliable services from thousands of qualified LTL, truckload and expedited for-hire carriers, as well as a nationwide network of quality Ryder fleets. Trucker Tools will enable Ryder’s brokerage operating platform with four primary functional applications – predictive freight matching, automated load matching, automated shipment tracking and digital document scanning and sending.
In another logistics development, SOUNDBOKS tapped RK Logistics for a larger role providing value-added product testing and configuration, quality assurance control, repairs and returns management. Program design, staffing and training has been completed and the additional services are now in operation, officials from both companies said.
“We wanted a high-quality logistics provider that understood our product and its unique needs, could be flexible and responsive, and adapt quickly as we grew,” Christoffer Nyvold, SOUNDBOKS chief operating officer (COO), said in a statement. “RK has delivered on all those commitments.”
Nyvold said RK also stepped up to invest and help us address growing needs for product configuration, customization and warranty support. “So, it was an easy decision to go with RK for these new services, all of which help our customers have a great product experience,” Nyvold added.
Calling SOUNDBOKS “one of the most innovative and fastest-growing companies in the high-fi, portable speaker market,” RK Logistics Group President Rock Magnan said he was excited to be supporting that growth and customer success strategies with more services and responsibilities.
“All our customers are smaller guys so we have to be creative and innovative to find solutions.” Magnan told LM. “In the Bay Area, we get a lot of startups in the retail sector. People come up with ideas, sourcing them locally and figuring out how to get product to consumers as they outgrow their garage, so to speak.”
SOUNDBOKS penetrated the European market and wanted to enter the U.S. market. “They had a fairly good product and knew how to sell it in Europe,” Magnan said. “We took them to a 49ers game and they saw tailgating for the first time. They don’t park and barbeque for three hours in Denmark. This gave them a whole new concept how to market because of that visit.”
“People are looking for how to get their product to a sales base,” Magnan explained. “Internet sales is one thing but internet delivery is a whole new concept.”
The easy answer is getting on Amazon but the margin erosion is pretty severe, officials said.
“If you sell through Amazon but deliver it yourself without going through their warehouse, there are opportunities,” Magnan explained. “We’re able to do it faster, cheaper and with a more user friendly solution. We make integration a lot simpler and less expensive.”
Asked what is the most important aspect of 3PL expansion like this, Magnan said there were a few things. Have we done it before? Can we take a solution and repurpose it for a new customer? Is it scaleable?
“Shippers continue to want proactive ideas from 3PLs on how to improve service performance and decrease costs,” Armstrong said. “The 3PLs have responded by improving customer experiences and interactions with 3PLs, leveraging continuous improvement initiatives, and proactively identifying cost-saving solutions.”
SOUNDBOKS COO Nyvold noted that in its due diligence process, it found many 3PLs who were good at basic warehousing and distribution but struggled with e-commerce. “RK was rare in that it was good in both areas, had relevant experience, was nimble and had a working e-commerce technology solution,” he said. “Logistics was something we did not want to do on our own.”
Instead, RK serves as SOUNDBOKS turnkey supply chain management and eCommerce fulfillment provider in the U.S. As customers place orders on the Soundboks website or through Amazon, those flow into RK’s integrated, eCommerce order management system.
From there, RK teams pick, pack and fulfill the orders from RK’s secure facility, and then arrange shipping for next- or second-day delivery. Customers have full online tracking capability for their orders. SOUNDBOKS managers also receive real-time inventory reporting and timely visibility into orders fulfilled and product on hand.
SOUNDBOKS also appears to be breaking down barriers in the 3PL relationship arena. RK Logistics also operates the South Bay’s only certified, general purpose Foreign Trade Zone, which allows Silicon Valley manufacturing and importing companies to benefit from various trade policies and practices that can reduce administrative regulatory costs and associated tariffs.
August 18, 2020
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