To succeed in our digital age, today's third party logistics companies (3PLs) must be attuned to the power of the internet. The 3PLs that will survive and prosper will be those that access the technology to automate their business processes, to connect with more purchasers and providers of transportation services, to expand value added services.

The good news is that with the emergence of outsourcing and strategic partnering, small and mid-sized 3PLs now have access to hosted applications on the internet. The promise of such technology is to automate all essential back office tasks, improve business communications, and enable 3PLs to differentiate themselves competitively by providing better information and enhanced value-added services to their customers.

Intermediaries More

Important Than Ever

A look back at the role of 3PLs tells us that their relationships with shippers once focused on transaction processing with telephones and fax machines. Today, the internet has changed everything and 3PLs are embracing an entirely new role in the transportation industry. Nevertheless, in the complex business supply chain, in which each movement of freight can involve up to 50 discrete transactions, intermediaries remain a critical factor. Human intervention and the expertise of seasoned professionals cannot be replaced by technology, but it can be significantly enhanced.

Industry analysts and transportation experts agree that 3PLs will be strong competitors in the new marketplace, providing increased levels of customer satisfaction and delivering such value-added services as supply chain consulting and warehouse management. Successful 3PLs in the new economy are likely to be the ones who make a strong investment in emerging technologies.

Cut Cost: Let Others Foot the IT Bill

The emergence of the Application Service Provider (ASP) model is responsible for a dramatic rise in the number of companies committed to offering services that create and maintain enhanced customer relations. An ASP aggregates, facilitates, and brokers IT services to deliver business services across a network.

Transportation ASPs combine the efficiency of the internet with logistics capabilities. Effective outsourcing of application hosting saves the cost of managing and updating applications. Software support costs are enormous, so paying a trusted third party to manage technology is an attractive proposition for customers. ASPs can host a complete e-commerce or e-business application or service, enabling the client company to focus on its core competencies.

Through the services of a qualified ASP, 3PLs gain access to the IT solutions needed to grow their businesses rapidly. Such solutions may offer 3PLs the opportunity to better manage their relationships, automate the labor-intensive manual processes related to load matching and management, supply chain management, and back office procedures.

This broader marketplace allows 3PLs to match loads faster with their established, reliable carriers. Identifying dependable carriers gives shippers the quality assurance needed to ensure the timely delivery of goods while maintaining customer retention. It has been estimated that the 3PLs embracing the opportunities afforded by the digital age will experience double-digit growth in revenue and profitability.

ASPs enable the 3PLs and carriers to better compete by improving manual and EDI processes through web-based technology. ASPs are best prepared to offer low-cost access to blue-chip technology, significant productivity savings, and new and improved opportunities to increase revenue. With the ability to analyze performance data and pinpoint areas for improvement, 3PLs using ASPs just may leave their competitors in the dust.