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!