So you’re a shipper intrigued by “Big Data” tools and technology to improve transportation management initiatives. Should you implement a 3PL technology solution, or is it more effective to select a pure-play TMS provider to leverage your data? Your current 3PL has a technology they’ve been offering and that seems like a neatly bundled offering. But, before you agree to use their tool though, consider the following strategy which delivers the best of both worlds.
The 18th Annual CapGemini Third Party Logistics Study revealed some interesting data regarding shippers’ usage of technologies, systems and tools to leverage Big Data in their supply chain initiatives. To dispense with the question of whether or not shippers are interested in Big Data, the chart below reveals that a majority of those polled reported using Big Data technologies for transportation management (TMS), supply chain network planning and optimization, while a plurality tapped tech tools for things like order management, shipment tendering and communications. So it is clear that shippers realize the potential, and those that are not currently leveraging IT for logistics are interested in doing so in increasing numbers as well.
So back to the question of whether it makes more sense to source best-in-class Big Data technologies from vendor-agnostic, third party providers (like UltraShipTMS) or from 3PLs offering technologies as part of a bundled offering. Many shippers gravitate toward the 3PL supplied technology model for a number of reasons; one throat to choke, one less relationship to manage, etc.
You don’t get anywhere near the depth and breadth of visibility with 3PL tools as you would if you engaged a standalone TMS solution from any of the leading providers. This is particularly true with respect to rate data, carrier acceptance data and overall visibility into underlying carriers.
However, there is a pronounced advantage to engaging a vendor-agnostic, third-party technology tool like a TMS or optimizer which is summed up in one very important word: visibility. We’re not suggesting that the tools offered by 3PLs don’t offer improved control and a degree of visibility to improve a shipper’s transportation management. What we are saying is that you most definitely don’t get anywhere near the depth and breadth of visibility with their tools as you would if you engaged a standalone TMS solution from any of the leading providers. This is particularly true with respect to rate data, carrier acceptance data and overall visibility into underlying carriers. Again, not to suggest that 3PLs willfully manipulate the tools they provide to their advantage. But they certainly don’t have a strong incentive to help you drill into the data to learn what is driving rates and preventing you from finding a lower rate elsewhere. After all, they are moving your loads as your broker of record.
It is also important to realize that using a third-party tool doesn’t preclude a shipper from having a strong relationship with their favored 3PL. But it does ensure that the shipper has full visibility into all the data the tool collects enabling much more robust and actionable Big Data analytics. This means the shipper secures greater accountability from their 3PL. It also means the shipper can effectively source capacity through both a trusted 3PL and through direct arrangements with carriers to provide even more flexibility.