A recent article from the Journal of Commerce addresses the growing technology gap among 3PLs and highlights HubTran as one of the “tech pioneers” who’ve created effective ways to help 3PLs leverage technology and gain competitive advantage. Excerpts from the article, titled, “Technology Gap Emerging Among 3PLs” are below.
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Not since the dawn of the dot-com era has the business-to-business sector been flooded with so many technology models that promise to be transformative for transportation and logistics providers.
Evan Armstrong, President of Armstrong & Associates, the Milwaukee-based research firm, said that over the last three years, a great deal of technology has been deployed effectively within 3PL operations, especially on the domestic transportation management side with freight brokerage operations.
Some of the most notable pioneers include:
- Werner and C.H. Robinson, which offer algorithms that allow freight brokers to quickly and efficiently isolate trucks that are going to have capacity within certain lanes, and will have favorable pricing.
- HubTran, which makes it easy to retrieve bill of lading information from carrier sites into the transportation management system and improve data integrity.
- Start-ups such as Uber Freight Convoy, and LoadExpress, which are “definitely going to automate technologies, make them more efficient, and lower costs.”
Armstrong said that when people talk about margin compression in domestic US transportation costs, the real margin compression is not going to come from disrupters such as Uber Freight — which is primarily just a small brokerage — but from automation that dramatically reduces the costs of 3PLs, and allows some of those savings to be passed onto their customers.
Which kinds of 3PLs have the best chance of surviving in this kind of environment? Matt Yearling, CEO of PINC Solutions, said that, unfortunately, “there are not many 3PLs that are thinking strategically about what is important for their customers.” He distinguished the commonplace “tactical 3PL”, which views its customers as interchangeable commodities who can be replaced when things go wrong, with the “strategic 3PL,” which is willing to forgo short-term profits in order to build longer-term relationships with its customers.
Strategic 3PLs are looking to add more value for their customer, including by bringing in new technology that may not pay off as quickly. The most progressive 3PLs are positioning themselves to add new kinds of value to their customers, Yearling said… “Technology is a major enabler of where this is all going,” he stressed.