3PL: transportation of the future—a pooled resource
Published on 28 March 2019
The supply chain is undergoing profound transformations and the industry is confronted with a multitude of economic and environmental conundra. Currently, the central question is how to meet the increasingly specific needs of consumers while also reducing costs and following greenhouse gas emissions standards? One solution seems to stand out in the collective mentality: transportation pooling. What advantages and challenges does pooled conveyance imply for 3PL? We have the answers.
New challenges in transportation
A sector faced with multiple changes...
The system is competitive, the customers highly demanding. Today’s 3PL solutions must handle a myriad of deliveries with shared arrival and departure points and constantly increasing trip lengths and time on the road. To honor these commitments, delivery rounds are usually made even when trucks are not loaded to capacity. In fact, the occupancy rate for trucks traveling through France today is a mere 67%.
Adaptation necessary amidst economic and ecological constraints
The state of the world calls for a reorganization of territory and logistics flows to come up with cheaper, more environmentally friendly transportation solutions. It is also imperative to remain a step ahead of industrial and transporter confidentiality regulations to ensure dynamism and efficiency.
It is by increasing truck occupancy rate and limiting empty returns that supply chain professionals will be able to reduce transportation costs and indirectly combat roadway saturation in the future, not to mention limiting the cost of maintenance for public infrastructure.
From an environmental standpoint, eco-friendly drivers, multimodal transportation, and electric or natural gas vehicles are all ways transporters can reduce their carbon footprint. And with an ever-growing plethora of rules and regulations for city driving, logistics providers are beginning to store their merchandise in warehouses far from urban areas and switching to electric for their deliveries.
Further reading: 3PL, meeting the challenge of last-mile delivery
The solution: transportation pooling
Transportation pooling is an ideal way to reduce transportation costs and minimize the environmental impact of logistics chain players.
Transportation pooling characteristics
By managing the relation between suppliers and merchants and dialogue between manufacturers, transportation pooling enables the following:
- Accelerated delivery frequencies
- Increased availability for products in-store
- Reduced stock held at sales locations.
Advantages of pooling
Pooled supply management, or pooling for short, can be implemented at many levels:
- For transportation operations: this means loading the merchandise of several manufacturers into a single truck for shipment to one distributor.
- Upstream: pooling can be a great way to group together orders from different providers.
In addition to the logic of transportation pooling, the goal is to pool resources as far upstream as possible, right from when orders are placed.
Bringing brands together: a multi-facetted challenge
Transportation pooling is far from a be-all-end-all solution—it is actually often a source of worry for the supply chain. Despite being a great opportunity for 3PL solutions, it it riddled with hindrances that must be overcome.
Managing multiple players
Transportation pooling is a wonderful opportunity for 3PL publishers to develop a specific offer intended for mid-sized industrial companies without the individual resources to develop such projects on their own. The logistics provider plays an essential role in this process, one that greatly surpasses their position in a traditional organization.
Supply chain procedures involve a number of players and require that 3PL publishers adapt to various forms of client operation. As such, they may be required to move warehouses, update their information systems, or comply with new and imposing confidentiality regulation set forth by industrial companies.
Despite these difficulties, the transportation economy is predominate and professionals are increasingly inclined to move forward with new strategies. A pooled FM Logistics platform between clothing company Petit Navire and Europe Snacks is one such success story in this field.
Including product type constraints in procedures
Some products must be transported exclusively with other similar ones. For example, hair spray must be transported exclusively with other aerosol sprays. Such considerations must be taken into account when pooling transportation.
Challenging the cost paradigm
The model can be quite expensive. 3PL publishers that invest in pooling must already have established a solid client base if they want to get their money’s worth out of the procedure. Mass distribution will be among the first in the business to benefit from it.