Incredible changes are currently redefining the path of moving goods from one business to another. As we continue to move into the future of B2B third party logistics and order fulfilment, what signs should we be paying attention to?

The challenges of dealing with the pandemic both revealed and accelerated opportunities in the supply chain. Combined with technological advances enabling the ability to drill down on specific customer needs, B2B 3PL partnerships have in front of them new paths to success on all fronts.

Let’s have a closer look at the challenges facing B2B 3PL operations, and how emerging technologies are providing solutions.

B2B 3PL Defined

To be specific, B2B 3PL is the process by which businesses outsource their order fulfilment, warehousing, shipping, and other logistics needs to a third-party provider.

This allows businesses to focus on their core competencies while leaving the logistics to the experts. Thanks to the rise of e-commerce, B2B third party logistics is a booming industry, with many businesses outsourcing their logistics needs to third-party providers in order to save time and money.

Differences Between B2B and B2C

A quick look at the interior of a related 3PL warehouse will give you a very good idea of whether an operation is B2B or B2C.

For example, a B2B fulfilment warehouse will tend to handle large items or irregularly shaped products on their way downstream through the manufacturing chain. A B2C warehouse on the other hand will often store large quantities of the same item such as FMCG products bound for retail store shelves, or multiple types of items in smaller quantities being prepared for last mile delivery.

With the ongoing evolution of the supply chain, unified supply chains are streamlining processes even further to include more wholistic B2B2C operations within some market segments. This provides complete control over the entire logistics process from intake of raw materials and manufacturing to final delivery.

Challenges Facing B2B Shipping

The major challenges in fulfilment faced by both B2B, B2C and even B2B2C, lie in the immediacy of demand for timely delivery of goods and the ability of logistics partners to keep up with operational needs.

“Only when fulfillment demands are met can a manufacturer plan for exponential growth”

Source: John Hayes: Director of Sales for Balyo USA as quoted in Forbes

From a 3PL point of view, a growing B2B client will not only require more flexible warehouse space, but the means to handle orders quickly, efficiently and accurately.

In the best of times, some businesses must have the ability to adjust to the massive roller coaster swings of seasonal trends. There are also labour issues, both of which tend to be relatively constant compared to the need for staying on top of technologies designed to make orders and tracking more efficient.

Like it or not, the pandemic spurred a 77.6% increase in e-commerce due to the need for safety and fuelled by convenience. 3PL providers had no choice but to adapt by proving themselves to be agile and more flexible than ever before. As we’ve seen in the last couple of years, the pandemic also exposed liabilities in a fragile supply chain that manifested in a shortage of truckers and empty store shelves.

With B2B e-commerce taking up more and more market share, and ever-impatient customer demands, business leaders find themselves with their hands full trying to navigate developmental challenges.

In general, the rapid growth of e-commerce has significantly impacted B2B shipping expectations and the logistics industry as a whole. With the rise of online shopping, businesses feel more pressure to ensure that their products are delivered quickly and accurately. This has led to an increase in demand for 3PL providers who can offer fulfillment services such as warehousing, packaging services, inventory management, and last-mile delivery.

Opportunities and Solutions

Wherever there’s a bottleneck in the supply chain, whether it be in the physical transportation of goods or in data management, there’s an opportunity.

“Companies are facing unprecedented change due to innovation, technology disruptions, and evolving customer expectations. Supply chains are becoming unbundled and customized to reduce costs and meet evolving customer needs. Logistics structures will also shift to more specialized solutions tailored to different customer segments, modes of transportation, and distribution networks.”

Source: KPMG Advisory on the Future of Logistics

If you drill down into the specifics of oncoming capabilities, the opportunities are staggering – and fully capable of becoming new market segments all on their own. Take for example the drone technology and fully automated vehicles which, quite possibly, could become the mainstays of  intelligent logistics.

Nonetheless, here’s an overview of some of the more immediate solutions both currently in use and on the horizon:

Automation And Robotics

Automation and robotics are revolutionizing the logistics industry, and by extension providing serious benefits to B2B shipping. Robotic process automation (RPA) and artificial intelligence (AI) are being used to streamline processes, reduce costs, and improve efficiency. Automated guided vehicles (AGVs) are used in warehouses to transport goods, while drones are being tested for last-mile delivery.

Big Data Analytics

Data is the new oil in today’s digital age. Big data analytics is a game-changer for the logistics industry. Businesses can use data to optimize their supply chain, identify inefficiencies, and make informed decisions. Predictive analytics can help 3PL providers to forecast demand and optimize inventory levels.

Sustainability And Green Logistics

Sustainability and environmental concerns are increasingly becoming critical issues for businesses. Consumers are demanding eco-friendly products and environmentally responsible practices. Green logistics is an approach that focuses on reducing the environmental impact of logistics operations. It involves using renewable energy, reducing waste, and optimizing transportation routes.

Personalization And Customer Experience

Personalization and customer experience are crucial in today’s consumer-centric world. B2B businesses are also starting to recognize the importance of providing a personalized customer experience. 3PL providers can help businesses to achieve this by offering customized logistics solutions tailored to their specific needs.

In Closing

The future is coming, some would say the future is already here. Either way one thing is for certain, there will always be advancements and challenges in B2B logistics. Moving forward, the dependancy on technology to provide solutions may be the answer, but benefits do not always come without associated costs.

Does your 3PL provider live up to your expectations and deliver what your company needs? Are they paying attention to the trends and demands shaping the future of your business? As a growing family owned company with operations in Brantford and Etobicoke Ontario, Brimich Logistics and Packaging is willing and able to serve all your transportation and climate controlled warehouse needs. Contact us today!

What Does Packaging Optimization Mean?

In simple terms, “packaging optimization” is a process that utilizes smart packaging. This refined method of packaging is designed to safely contain, protect and communicate the specific contents of your packaging as your products travel through the various handling processes within the supply chain.

The product’s journey starts with the manufacturer, then may go on to a warehouse or in-store fulfillment centre, and ultimately wind up being delivered at its final destination. This  last mile of delivery could be a consumer’s home, an office building, retailer or other end point.

At each step along the way, there are factors which determine in what condition your products will ultimately arrive. Optimizing your packaging for the rigours of your product’s journey can make all the difference in the world.

Start by Choosing Optimal Packaging Materials

The first step in choosing optimized packaging for your product is in fully understanding its vulnerabilities .This involves going the testing stage (if applicable), then determining the best packaging materials.

Once your product has gone through testing using established protocols for its shipping class, the next task is developing the the proper packaging to help protect the product as it navigates through all supply chain environments.

This packaging system is broken down into three levels:

1. Primary Packaging – The packaging directly in contact with the product itself and is often designed with the “unboxing” experience in mind. Other considerations are product protection and perhaps store display.
2. Secondary Packaging – Packaging that’s just outside of the primary packaging and typically used to create a stock-keeping unit or SKU. Also part of the unboxing experience, this protective layer also helps guard against moisture and humidity.
3. Tertiary Packaging – Referred to as transit or bulk packaging which often forms a group quantity of SKUs. This level of packaging is the final layer used to protect the products in transport, safely and securely, from point A to point B. For example, this could be from a manufacturer’s loading dock to the final point of sale.

How Much Packaging is Just Enough for the Environment and Supply Chain?

In order to save on costs, many products wind up being under-packaged. This results in avoidable damage that sends the product into reverse logistics. This also produces product waste along with associated fees and other costs.

Conversely, there are some products which are over-packaged using far more material than is necessary. This excess is not only wasteful in its own right, but has an impact on our environment. Not just in terms of landfill or limited recycling, but in transportation costs due to size and weight issues. These overages in turn lead to excess fuel and energy consumption, along with higher transportation fees throughout the supply chain.

The sweet spot in optimal packaging should be designed to fit the requirements of your supply chain with these key points in mind:

• The right type and thickness of packaging films or rigid plastics
• Effective thickness and properties of foam or protective packaging
• An appropriate strength and flute of corrugated board used
• An efficient use and amount of winds of stretch wrap
• An efficient use of packaging tape or adhesive in the right location

Optimize Package Design

Whether you’re designing a package from the ground up or updating an existing design, there is value in following best practises within your industry, along with taking cues from consumer feedback.

Some considerations may include using fewer materials or lowering packaging weight. For example, modern packaging materials may include a dissolvable bag-in-container for non-solid or semi-solid products such as cereals. Or a bio-degradable rigid container might offer the right benefits for transport and storage space for other products.

Now with the right packaging and materials selected, it’s on to actually designing and engineering the packaging. Keep in mind this can impact different sections of not only the supply chan, but you own general packaging operations:

• Manufacturing & Operations – Your package design should ideally work within your current manufacturing processes and automation equipment. Additionally, these optimized packaging requirements should enable your systems to run at their optimal speeds.
• Material Vendors – Is your current material vendor able to produce the package to your specifications, and are they in line with your packaging objectives? Upgrading design factors can affect material vendor capabilities, as well as your own manufacturing systems. Therefor, make sure your provider’s equipment capabilities, material competencies and visions for the future are up to the task.
• Supply Chain Costs – Unique or non-standard shapes can impact your transportation expenses. Your packaging is truly optimized when all systems and touch points are maximized – or minimized as in the case of wasted air space. Shipping air, unless it’s absolutely necessary and relevant to the product, is wasteful.

Optimize Product Counts for Better Cost & Efficiency

End-users and customers often dictate the order quantities and case counts – that is, with the exception of the number of hot dogs in a package with respect to the number of hot dog buns  – a mysterious mismatch. Regardless, this demand is true for not only consumer packaged goods (CPG) manufacturers, but B2B manufacturers as well.

Fitting more product on a pallet without compromising product safety can improve your overall cube or product shipping density. This is an important part of transportation optimization especially when you use less-than-truckload (LTL) freight extensively. Similarly, fitting more product on a retail shelf or within storage can also help reduce inventory and storage requirements.

What is the Right Amount of Packaging Protection?

The right level of packaging protection will ultimately mitigate or at least minimize damage during transit or stacking. Effective packaging protection designed for specific products can have a wide array of requirements. For example:

• Protective barriers for pharmaceuticals and food products to help extend and maintain shelf life. This industry-specific packaging protects against environmental damages and penetration from oxygen, moisture or other contaminants.
• Fragile products require additional shock protection. This helps keep products from suffering damage due to mishandling and impacts.

Standardize Your Product Package Designs

Consider standardizing package sizes and dimensions across multiple products. This lets you increase efficiencies by streamlining manufacturing, reducing system changeover times, and improving line utilization. The added benefit is less risk of wastage as excess packaging can be redirected to other products with minimal loss in time, effort and materials.

Build Sustainability in Your Supply Chain

Baking in energy-efficient production will not only help reduce stress on the environment, it can also help your bottom line. Choosing to use energy-efficient machines and forward-thinking packaging materials with lower manufacturing temperature requirements, can produce very real and tangible savings.

Incorporating sustainable practices, recyclable materials and reusable packaging helps keep your packaging agile, adaptive. and generates goodwill towards the public’s growing awareness that environmental problems indeed need to be addressed now more than ever.

First Mile Delivery Optimization

Compared to last mile delivery, first mile delivery isn’t getting nearly as much attention or resource investment to improve efficiency and visibility. You would think the first step in the delivery of your products would carry weight, and it does.

Being the initial leg of the journey an item will make in an individual company’s supply chain process, optimizing first mile delivery helps ensure customers are not lost due to unmet expectations, low standards or inconsistencies.

Additionally, there are the obvious benefits that come with having a better understanding of your operations which through the process of analysis, uncover opportunities to improve.

What is first mile delivery?

As the official kick-off to the transportation of goods across the first leg of the supply chain, the first mile could also mean different things for different industries and supply chains.

For example, as a retailer this could be delivering items from a regional warehouse to local stores or a local distribution centre. For logistics services, this could be the picking up of goods, and either:

• bring them back to their own warehouses (i.e. next day/distribution model) before the next leg of shipping or
• provide a same day or on-demand service – where LSPs pick up the order from the shipper, which then go out for immediate delivery to the consignee

As another example, the first mile for a moving and storage company would involve the pickup from the customer’s home or store, then delivery of the inventory back to the warehouse or storage site.

Or it could be something as simple as an eCommerce merchant dropping off individually packaged and addressed products at the local post office for the next link in the delivery chain.

In both cases, it involves loading and unloading shipments. It can also involve different drivers managing the same items, and items with more than one order ID – such items are often resolved manually by many 3pls.

Optimizing First Mile Logistics

Automation is the key to optimizing first-mile logistics processes. By applying the right technology, excess expenses can be converted into funds that help propel growth.

By examining first-mile operations through the lens of lean performance, opportunities can be realized such as more efficient truck loading and more predictable delivery times at the last mile of the supply chain.

Smart manufacturers take advantage of any opportunity to assess logistics and find ways to improve the speed of getting products to consumers. A deeper understanding of inter-logistical operations can produce wins such as better price-points for their customers, and a more competitive edge in the market.

From a human input standpoint, auditing tasks of the company’s workforce can provide insight into how hands-on tasks may become automated ones. And instead of being interpreted as lost jobs, these operational savings can be used to boost employee satisfaction by being seen as promotions in assigning them new and more complex tasks.

First Mile Delivery Processes and Hurdles

From the time a product is packaged and ready to enter the supply chain process, it begins its journey through the first mile of delivery. Here are a few of the most important elements to consider:

Visibility

Once a service provider takes a truckload from its warehouse, there is zero visibility as to where the order is without some form of tracking technology. This is particularly problematic for shippers of big and bulky goods, fragile, or expensive items.

Today, it’s possible to update your first mile shipping and first mile delivery experience using many of the same techniques that are applied to last mile delivery.

Inexperience

In the larger sense, shippers are customers too, and expect a great experience from their service providers – so why not give them the same treatment when their business orders are shipped? 

With the boom in eCommerce, businesses have been paying close attention to the last mile in recent years. In order to stay competitive in the online landscape, businesses have rushed to overhaul and expand their last mile fulfillment services.

In comparison, nothing substantial has happened in the first mile world. From the perspective of the full delivery experience, the first mile has been largely ignored. This is more due to the fact that product origination could be thought of like the trunk of a tree; a singular point of origination, whereas the points of destination would be the branches or even individual leaves in the case of absolute end-users.

However, it’s important to realize every aspect of the delivery experience plays a part in creating customer stickiness.

Technology and Digitization

For many, first mile delivery processes such as coordinating pickup times and matching shipment size to truck availability can be improved by digitizing the first mile delivery flow.

Larger companies have technology for optimizing first mile logistics. Small companies on the other hand, may have to adopt transformational processes, moving their entire supply chain from manual to more efficient digital operations. Depending on a company’s size, this can take more time and resources than they have available.

Can You Outsource First-Mile Delivery?

The short answer is yes. Unless your company also has its own fleet of delivery vehicles, the first mile is typically handled by suppliers and facilities through external third party carriers.

How Long Does First-Mile Delivery Take?

The time it takes to accomplish the first mile delivery will depend on how far your supplier is to your warehouse or fulfillment centre. It will also depend on the shipping method used.

How Much Does First-Mile Delivery Cost?

First mile delivery costs will depend on the size and type of your inventory and the shipping method used to transport it. First mile delivery optimization involves using cost-effective methods of ordering only as much inventory as you need, or shipping in bulk based on forecasted demand. This reduces the amount of overall capital associated with moving the inventory.