How to Choose a 3PL/4PL during Supply Chain Disruptions

Supply chain disruptions were plentiful in 2022, and they’re projected to continue into 2023 and beyond.

Disruptions forecasted to continue or increase include operational and technological risks, strategic risks, legal, regulatory, and compliance risks, and financial risks. 

The main issues affecting global logistics and supply chains stem from politics, economics, and ecology.

Given today's turbulence, the typical logistics and supply chain dynamics are more adverse than normal. Hence, we have the New Normal.

Because of the game-changing supply chain disruptions, operating solo as a shipper has become untenable. In fact, it’s become precarious.

That calls into question whether you have the right 3PL/4PL for the New Normal. Specifically, is it equipped to manage the disruptions of this new operating environment?

The dynamics have changed (we covered those in our last post). So, it makes sense that different criteria should apply in choosing a 3PL/4PL.

This post will look at the capabilities required to manage these enormous challenges. And that will inform the selection criteria you should focus on.

The majordisruptors pressuring supply chains listed above present shippers with enormous challenges. Conducting business as usual won’t work anymore. That means you must pivot in a major way—now.

An article in Forbes cites four ways to address these disruptors: “…through technology, partnerships, new customer strategies, or a focus on new markets.”

Looking at the major risks you face in 2023 helps to make clear the criteria you should apply in choosing a 3PL/4PL.

Leveraging Technology

Technology is at the forefront of resolving today’s logistics and supply chain challenges. The advancement of technology has made this a leading solution given today’s confusion and volatility.

A 3PL/4L with robust capabilities will allow you to:

These capabilities are must-haves. Organizations that have these capabilities will enhance your business’s agility and resilience. They can take your business to the next level in an orderly manner if properly applied.

So, one vital criterion in choosing a 3PL/4PL today requires technology and expertise.

Partnerships During Supply Chain Disruptions

It’s a given that there’s strength in numbers. This axiom is true more than ever.

Partnering with a 3PL/4PL is not just expedient, it’s essential to success.

Globalization, specialization, and an increasingly competitive landscape challenge even the most adept shippers. This increases complexity. You’ll have more success in tackling these challenges with a partner.

But just any partner won’t do. You need a 3PL/4PL that is reliable, efficient, and affordable. You need a 3PL/4PL with a proven track record. It must deliver reliable, consistent, effective, and efficient services.

More important than that, you should look for a 3PL/4PL that is focused on your business. Customer-centricity is a strategic attribute of the New Normal. It’s changed business in a way that can make a difference between success and failure.

But there’s another often-overlooked criterion: “employee-friendliness”. That’s right, employee-friendliness, like customer service, has become a strategic differentiator.

New work consisting of remote work, work in the office, or hybrid work has changed the workplace. The best and the brightest will gravitate towards organizations that embrace new ways of working. Employees have choices, and they will vote with their feet.

As you consider outsourcing your logistics operations, you shouldn’t overlook employee-friendliness.

New Customer Strategies

As the New Normal takes hold, if you haven’t already done so, you should evaluate new customer strategies. This takes on many forms.

First, in taking a strategic view, you’ll want to look at your customer strategy. You should compare it to today versus what you think it needs to be tomorrow. There are no set number or types of strategies. Here are some possibilities to consider.

These are broad goals that you should deconstruct. Again, many possibilities exist for each goal. What you come up with should be tailored to your needs.

Next, you will want to identify what you can do in-house and what you can outsource. To improve customer service, you might consider improving your product returns process.

Then, you’ll determine whether to do that in-house. With the increasing complexity of logistics and supply chains, you would likely want to outsource this function.

That brings us to which organization you should outsource to.

To find partners, go back to your criteria. Specifically, assuming you agree, you would seek a 3PL/4PL that delivers reliable, consistent, effective, and efficient services.

Further, they should have a track record of performance. Examining a track record will give you insight into their ability to deliver what you need. At the strategic level, you’ll want a 3PL/4PL that is agile, resilient, and affordable. And it should also be customer- and employee-friendly.

That’s your starting point. Now we’ll look at choosing a 3PL/4PL that can assist you in focusing on new markets.

Focus on New Markets

Your business is operating in a different world. It’s more competitive. It’s riskier. And it has changed the old ways of doing business forever.

To remain competitive, you will likely want to diversify and expand your business. Exploring new markets is one way to grow your business. Demographics are changing, and so are buying patterns. So you’ll need to consider those impacts on your business.

Seeking new markets in which to do business is an excellent way to do that.

Going at it alone will make your job tougher. The obverse of that is, you guessed it, to partner with a 3PL/4PL. Doing that would simplify the accomplishment of your goals to enter new markets amid supply chain disruptions. After all, entering a market entails levels of complexity you may not be equipped to manage.

If you’re considering entering new markets, you must address logistics support.

First, you’ll want to use the general criteria set out above. Then you‘ll need to drill down to determine whether a prospective partner has the scope and scale to support your entry into new markets.

This is not an all-inclusive list. It’s not intended to be. Rather, it highlights the levels of complexity involved that you should consider.

You must do your homework in choosing the right 3PL/4PL. That starts with your strategic view of what you want to accomplish, aided by the criteria listed above.

You would then further refine those criteria into relevant support criteria.

Rising Above Supply Chain Disruptions

Seeking a qualified 3PL/4PL that can operate seamlessly in the New Normal is critical to your mission accomplishment. Therefore, you should invest the time upfront to identify your specific strategic goals and objectives and then match them to the capabilities required to support those goals and objectives.

Taking a systematic approach helps to simplify choosing a suitable partner. It also makes this undertaking less stressful and less time-consuming.

At American Global Logistics, we’re positioned to support our clients to survive and thrive in today’s turbulent times. The transition is underway whether you’re ready or not.

We’re ready because we’ve prepared ourselves. We adapted when we saw that a new era was coming. More importantly, we’ve applied our own experience in transitioning to the New Normal to support our clients successfully.

That’s what separates American Global Logistics from the rest of the pack.

We want to do the same for you.

Contact us today to find out how we can help you thrive in today’s turbulent times.

14 Logistics Trends for 2023: A Brave New World – Part II

The rapid adoption of technology is imperative in transitioning to a New Normal. That’s not the only guiding principle for transitioning to a new era in logistics trends.

Non-technology factors are the flip side of technology in building adaptive, agile, and resilient supply chains. Like technology, geo-politics, economics, globalization, and new business processes can affect customer service, operational efficiency, and revenues.

Let’s get right into the first of the seven new trends and processes you will want to adapt to and/or leverage in 2023.

#7 Logistics Trend: Economics & Global Trade: The rising significance of external factors

Last year, strategic geo-political and economic issues weighed heavily on supply chains. The Russo-Ukrainian war, China’s saber-rattling regarding Hong Kong and Taiwan negatively affected global trade. (McKinsey) And of course, the lingering effects of Covid-19, predominantly in China, affected trade as well. Likewise, inflation, rising interest rates, and continuing employment also disrupted supply chains. Uncertainty and volatility are here to stay.

Why Trending: 

The trend of geo-political and economic issues not only continued but grew in its impact. The size, scope, and extent of this trend matured, making a return to normal business operations more difficult than expected.

Some changes wrought by this trend are structural changes, such as dividing east and west. Trade between western bloc countries intensified. One example is Europe’s increased reliance on the U.S. for natural gas.

Similarly, trade between eastern bloc nations also intensified, especially between Russia and China. Notably, Russia now sells Russian oil to China and other nations in rubles instead of dollars. This decoupling of the dollar is important and represents a structural change that will affect trade for years to come.

Impact if the trend is not adopted:

In this case, your business should pivot and adapt to these strategic challenges.  Failure to do so will leave your business flat-footed compared to its competitors.

You must create new networks, including trade partners and sources of supply. You must make new relationships. And your operations and training must reflect these new realities.  

That’s a lot for any business to digest in a short amount of time. Not taking these strategic issues into account can disrupt your supply chain drastically. At best, failure to adapt will result in hampered operations. At worst, your business may not survive.

#8 Logistics Trend: Integrated Supply Chain Management: Employing multi-channel logistics to achieve next-level performance

Integrated supply chain management can mean many things. Here, we’re referring to integrating different modes of transportation or multi-channel logistics. Flexibility has become mission-critical. So employing multi-channel logistics has become imperative.

Flexibility as a competitive capability arose from the logjams at the nation’s ports. Bottlenecks not seen in decades clogged up supply chains preventing the formerly smooth flow of goods before the pandemic. That includes changing suppliers, providers, and modes of delivery.

Why Trending:

As one of the top logistics trends, this is unfolding because it squarely addresses the need for agile and resilient operations. With the customer as the focus, timely delivery is now paramount. Meeting customer expectations has become a mandatory core capability. So mixing and matching containers/goods to different modes and networks of transportation will only grow in the long term.

Impact if the trend is not adopted: 

If businesses do not adopt the trend of integrated supply chain management, they won’t remain competitive for long. Employing legacy business practices, processes, and workflows won’t work in the new environment. Simply put, legacy operations can’t solve new problems. The new operational environment calls for new ways of doing business.

#9 eCommerce: A game changer shaping the future of logistics and supply chains

As the pandemic imposed restrictions on public gatherings, trade, work in the office, etc., eCommerce helped to overcome Covid’s oppressive restrictions Now, eCommerce is still popular but seems to be leveling off as a logistics trend with the reopening of physical stores. Nonetheless, it appears e-commerce is here to stay and will continue to grow, albeit not at the pace seen in the pandemic.

Why Trending:  

eCommerce will continue to trend because it’s fast, flexible, and customer friendly. eCommerce engages the customer from the moment a customer places an order to the time of delivery. It offers end-to-end engagement that customers have been craving and now have.

Impact if the trend is not adopted: 

eCommerce is a game changer. It changes relationships, processes, and technologies. Drop shipping from the supplier directly to the customer saves time and money. It eliminates intermediate distribution and inventory points with direct shipments to customers. That reduces the associated logistics and financial processes of those distribution and inventory points.

If you don't embrace this trend, it’s like fighting an uphill battle. You will struggle to meet customer expectations.  As customers become disaffected, their loyalty will wane, affecting the company’s brand.

Over time, competing against businesses that integrate eCommerce into their supply chains will become a losing proposition.

#10 Logistics Trend: Supply Chain Risk Management (SCRM): Confronting supply chain disruptions

Risks to supply chains have always been lurking about. Now, risks are more persistent and pervasive than ever. And looking at the food and retail industries alone shows this trend will likely only grow in the future. Therefore, SCRM becomes a clear and overriding trend in today’s operating environment.

Why Trending:

SCRM represents a must-have capability. It reflects the need to ramp up risk management from a passive to an active capability. Cybersecurity alone highlights this need to address risks immediately and proactively.

Impact if the trend is not adopted:

It should be clear that SCRM is indispensable, not optional and not a new concept in 2023 logistics trends. Any business’s existence depends on a robust SCRM capability. Lacking a potent SCRM capability is like fighting with no defense capabilities.

#11 Logistics Trend: Sustainability: Ensuring long-term operational viability

Similar to SCRM, sustainability is becoming a must-have capability. Governments want it. Consumers want it. And now, many of your competitors want it. Your competitors may want to appease governments and consumers. That’s one aspect. Another aspect, however, is that sustainability can give you a competitive advantage.

Why Trending:

Sustainability is trending along with the worldwide movement towards ESG or Environment,

sustainability, and Governance. Briefly, ESG aims to make trade cleaner, renewable/maintainable, and fairer. Hence, sustainability promises to continue to trend in the long term.

Impact if the trend is not adopted:

The impacts of this trend are clear-cut. Not only can businesses lose their competitive edge, but they risk running afoul of laws and regulations. And that can be a showstopper for any business. In short, non-compliance is not an option. Failure to adopt and comply with sustainability laws and regulations can put a company out of business.

#12 Logistics Trend: New Work: Changing how work gets done

Like sustainability, the New Work is not going away. New Work is a loaded term, so let’s define it. Essentially, New Work includes work from home (WFM), working in teams rather than individually, and working remotely full-time or part-time. It’s a new way of working made possible by technology and globalization.

Why Trending:

As mentioned above, New Work fits with other trends, such as new technologies and globalization. It results in work being accomplished across cities, states, and even nations.

Specifically, 24x7 operations were already in existence. But now they are expanding across industries and businesses. Depending on how it is implemented, it can be more productive and cost-effective.

Another reason this trend will endure is that workers embrace the flexibility that remote work/WFM affords. From single parents to those providing elder care, WFM is a necessity. With those potential benefits, New Work will take shape and become an industry standard.

Impact if the trend is not adopted:

Given today’s unemployment situation where many jobs remain unfilled, flexible work arrangements can make a difference. Employers that include various forms of remote work will be more attractive to job seekers.

Although some employers seem to take a harder line on WFH, most competitive businesses have some form of WFH and in-office work that might satisfy employees’ needs for flexibility.

Businesses that don’t offer their employees sufficient flexibility will also race to achieve the productivity and efficiency of companies that have adopted this logistics trend.

#13 Logistics Trend: Customer service: From platitudes to strategic imperative

In the post-Covid world, logistics is all about the customer. It bears repeating: logistics is all about the customer- your customer. Meeting the customer’s needs is paramount over all other considerations.

That’s come about because of technology, which has increased speed and transparency and, therefore, engagement. As technology matures, the customer will gain greater access and a stronger voice in how businesses provide goods and services.

Why Trending:

Spurred by technology, this logistics trend has already been growing. The pandemic sped up that trend. Now, the rise of eCommerce is further reinforcing this trend. With the ability to engage for the moment a customer purchases a good or service to the point of delivery, the customer’s participation will be prominent.

Impact if the trend is not adopted:

This is an indisputable, must-have, next-generation capability. Customer service is not only necessary, but it is also critical to survival. If your business does not adopt this trend in all respects, your company’s survival is at great risk.

The impact could be devastating, destructive, and, at worst, terminal.

#14 Logistics Trend: Strategic Partnerships offer synergies that drive success

Partnerships are an emerging logistics trends. They may not be in vogue yet, but they are growing out of necessity. The complexity of logistics and supply chain operations, the uncertain market environment, and extreme volatility are compelling business, industry, and government to work in partnership.

Why Trending:

Addressed briefly above, today’s operating environment is too complex, too uncertain, and too volatile to navigate without a partner. Taking on the many risks, challenges, and disruptions facing supply chains in 2023 independently is not an option. This is why facing the New Normal falls into the top logistics trends of 2023.

Partnerships between suppliers, shippers, and 3PL/4PLs are more important than ever. When you add governments and customers to this mix, only then can you appreciate the full complexity of supply chain management.

Impact if the trend is not adopted:

As with customer support, partnerships are mission-critical for success. Supply chains have always run on relationships. Now, more than ever, they are more reliant on relationships. The failure to make enduring relationships across your supply chain can render your business ineffective. At best, you will put yourself at a marked disadvantage.

You won’t be able to meet your customer’s basic needs compared to your competitors. Your business will fall short quickly of its goals and objectives if you try to go it alone. Working in partnership represents the New Normal.

Welcome to the Arrival of the New Normal

The new year will not only introduce a plethora of new technologies. It can also streamline business processes that can boost your business' efficiency.

Coupled with new technologies, innovative business processes can reduce complexity and uncertainty. And that will drive change ̶ structurally and strategically.

This coupling of capabilities can foster agility and resilience focused on customer support.

That completes this overview of logistics trends shaping the new reality called the New Normal. The bottom line is that changes will lead to more changes. And they will come at you faster and more frequently.

Transitioning to this New Normal can be daunting. But businesses that embrace the transition to the New Normal will thrive.

At American Global Logistics (AGL), we constantly track trends. We look for their impact on your business, including your bottom line. In doing that, as a customer-focused 3PL, we assess the impact on your customer.

There are two ways to manage this game-changing era. You can transition to the new operating environment on your own. Or you can collaborate with a seasoned partner in embracing the New Normal of logistics trends.

Contact us before you make a final decision. Get the facts about how partnering with us can benefit you.

14 Logistics Trends for 2023: A Brave New World Has Arrived – Part I

In today’s post-Covid world, only the fittest supply chains survive. And technology may be the answer to survival. As it happens, logistics and supply chains lend themselves to new and emerging technologies and logistics trends. Many supply chain functions promises to improve operations through rapid technology adoption. They include data storage and sharing, communications, end-to-end (E2E) visibility, and cost reduction.

That makes the adoption of technology not only desirable but also imperative. Of course, technology is only one aspect of the transformation that is underway. However, it is important because it is foundational to redesigning smart supply chains.

What are smart supply chains?

They are responsive meaning they are adaptive, agile, and resilient. These three capabilities can help to improve customer service and support, operational efficiency, and revenues.

This post will focus on seven technology trends, either existing or emerging. Next week we will cover seven business-related trends shaping supply chains in 2023.

Let’s get right into the first of the seven technologies you will want to leverage in 2023.

#1 Trend: Adoption of Cloud Technology

One of the more popular choices among businesses

In fact, the benefits are substantial offering enhanced cost savings, security, sustainability and more.

Why Trending:

Impact if the trend is not adopted:

#2 Trend: Big Data and Analytics

Why Trending:

Impact if the trend is not adopted:

Now is the time to adopt big data and analytics to reap these benefits as supply chain disruptions have leveled off. Disruptions will likely continue and may increase, making this lull an ideal time to embrace big data and analytics.

#3 Real-Time Supply Chain Visibility (SCV)

Supply chain visibility promotes quick responses to disruptions thanks to the use of real-time data. Data informing E2E visibility include traffic patterns, weather, and road and port conditions. These data points across the supply chain give visibility formerly not available. Add to that the employment of real-time data, which facilitates agility and resilience.

Why Trending:

In a word: efficiency. Real-time visibility enhances responsiveness to customers’ needs and changing conditions. It also promotes supply chain integration and synchronization that enhances operations.
Also, as with robotics (discussed below), the technology is available now. Real-time data allows companies to keep their finger on the pulse. Supply chains are all about flows. And being able to track flows and unexpected disruptive events is mission critical.

Impact if the trend is not adopted:

Failure to adopt this trend will disadvantage any company compared to early adopters. Today’s world depends on rapid adaptability, which supports both agility and resilience.
It represents a foundation for the transformation of logistics and supply chain management. Omitting this building block will hamper modernizing businesses, risking their survival.

#4 Trend: Blockchain

This is a breakthrough technology that has great utility for logistics. It is an untapped resource that can revolutionize logistics.

Why Trending:

Benefits to logistics and supply chain management are plentiful. They include:

Blockchain is an emerging technology that can promote agility and resilience and facilitate data-based decision-making.

Impact if the trend is not adopted:

As an emerging trend, the potential of blockchain technology is not fully realized. Yet early adopters stand to make significant gains. And laggards will fall behind eroding their competitiveness over time.

#5 Trend: Artificial Intelligence (AI)

Automation/digitization is the wave of the future. Covid-19 accelerated this nascent trend. Now this logistics trend is taking off because it addresses key supply chain weaknesses.

By 2026, Gartner estimates more than 75% of IT supply chain management companies will deliver advanced analytics (AA), artificial intelligence (AI), and data science solutions.

Why Trending:

AI will help improve, streamline, and optimize supply chain operations buttressing this trend.

Impact if the trend is not adopted:

#6 Trend: Robotics 

Robotics is no longer a future capability. It exists now and is becoming more easily adoptable.

According to “Gartner by 2026, about 75% of major enterprises will have introduced and implemented some kind of robotic solution in their daily warehouse activities.

As warehousing becomes more sophisticated, efficiency and agility will drive results-oriented operations. Investing in robotic process automation (RPA) reflects a major shift that can give you a competitive edge.

Moreover, the use of RPA helps to optimize business processes and reduce costs. Additionally, robots are not constrained in how many hours they can work. That means competitiveness will intensify with 24x7 operations. 

Other benefits RPA offers include improved safety and fewer errors. That alone results in more efficient and effective operations. Listed below are several functions robotics offers businesses today. 

Why Trending:

Robotics is trending now because the underlying technology is at a tipping point as a logistics trend. It is ready for implementation in various forms now. Also, you can implement RPA in intermediate packages, taking a building block approach. That reduces the complexity of implementation and training, while also reducing costs.

Impact if the trend is not adopted:

Failure to adopt any available technology will put any business at a disadvantage. That is especially true for RPA technology because of its immediate utility. Late adopters will also endure stiffening competition as they cling to legacy operations. 

#7 Trend: Automated Vehicles and Electric Vehicles (AVs and EVs) 

AVs and EVs are part of a larger megatrend: The growth and dominance of technology in business. That is because it addresses both performance and cost issues. For example, AVs and EVs address the persistent driver shortage and economic issues like recession and inflation. Automation makes these immaterial. At present big retailers like Walmart have adopted AVs. 

Electric vehicles will also offer a more eco-friendly and economical solution to transportation. This trend is growing because of its benefits, which are especially attractive in today’s market environment.

Why Trending:

Electric and autonomous vehicles have other compelling benefits such as:

Also, environmental benefits such as reduced carbon footprint will boost AV/EV adoption.

Impact if the trend is not adopted:

Failure to get on board this megatrend is nothing more than a missed opportunity. Companies that adopt AV and EVs now will enjoy the performance, financial, and environmental benefits. 

Companies that are slow to adopt AVs and/or EVs or do not embrace this trend will struggle. 

They will gradually fall behind the competition. Performance will lag compared to competitors. As that happens customer service will likely decline and with that customer loyalty. That will show up in reduced sales, revenues, and market share.

Welcome to a Brave New World 

The new year will introduce a plethora of technologies you can leverage.

Technology will help deliver new capabilities rapidly taking business performance to the next level. 

Introduced and implemented properly, these technologies can reduce complexity and uncertainty. Depending on how and when you implement them, they can be game changers.

These technologies will deliver capabilities that enable improved agility and resilience focused on customer support. 

That is the overview of technology trends shaping the new reality in today’s marketplace. From E2E visibility to improved performance, risk awareness, and cost reduction, a new supply chain is emerging.

It will give meaning the yesterday’s platitudes of faster and leaner supply chain. In short, companies can compete more successfully with the adoption of these technologies.

Remember, next week we’ll cover seven business-related trends shaping supply chains in 2023.

At American Global Logistics (AGL), we track trends to assess their impact. We look for ways you can leverage these technologies to improve your business processes with a focus on customer service.

You can navigate today’s ongoing transformation to a digitized supply chain on your own. Or you can collaborate with an experienced partner in embracing the trends shaping the New Normal.

Why don’t you contact us, before you decide? We would be happy to talk to you about how you can position your company for long-term growth in an uncertain environment.