For many industry thought leaders, analysts and educators, the impact made by the COVID-19 pandemic has yet to realign the current third-party logistics (3PL) marketplace. But when it does, shippers may expect far greater reliance on innovative technologies requiring substantial capital investment.
“Given the massive coronavirus windfall to omnichannel and e-commerce companies, some might think that 3PL’s have a tremendous opportunity,” says Michael Gravier, Associate Professor of Marketing and Supply Chain Management at Bryant University, “Even before this disruption, the world was a volatile place with tariffs and raw material costs fluctuating as quickly in response to Twitter blasts. And it was pushing companies to focus more on innovation based on core competences and allowing 3PL’s to take more charge of supply chains.”
These trends before the virus struck indicated that 3PL’s were increasing their strategic importance greatly, adds Gravier, with the focus on the “Fourth Industrial Revolution” providing a tantalizing opportunity for them if only they could capitalize on their roles as integrators and supply chain matchmakers.
“But the virus has also polarized the 3PL world,” he observes. “At one end of the spectrum, the ‘Great Wall of Doubt’ must be overcome: there is a long-standing mistrust between 3PL’s and shippers. This is a fundamental disconnect common to any outsourced relationship because the shippers don’t understand the 3PL’s world, yet they must rely on them.”
For Gravier, 3PL’s that find the successful combination of warehouse robotics, internet of things, artificial intelligence, blockchain, and organizational culture are going to see exponential growth…but the time to invest in these technologies is now.
“Those 3PL that adopt the right digital technologies to facilitate strategic competitiveness of their shippers will be among the first to succeed in this new environment,” he adds.
Gravier was intrigued by a recent paper written by Andy Johnston, director of innovation at GEODIS – a major 3PL embracing digitization.
“The Rise of Robotics in the 3PL Industry,” examines how using robotics in the warehouse enhances – not replaces – the workforce.
“Working with robotics can make employees more efficient, and not just by reducing the physical needs on the job,” says Johnson. “Robots with an intuitive user interface that ‘speak’ multiple languages can reduce training times up to 50 percent. When many operations offer a pay-for-performance incentive, any saved training time can help both the brand and the employee.”
Furthermore, the use of robotics can also help to keep workers remain safe and healthy in the wake of COVID-19.
“As many states begin to reopen, social distancing guidelines are still in place for many logistics, manufacturing, and transportation operations,” says Johnson. “Most employees will have to wear masks, gloves and remain six feet apart, which thanks to robots, is possible.”