Outsourcing logistics processes to a 3PL is a relatively simple yet effective way to minimise supply chain expenses. However, it’s easy to oversimplify this strategy and miss money-saving opportunities. More in-depth 3PL management is necessary to become as cost-effective as possible.

Businesses must partner with the right provider or mix of providers to get all the savings they can. Beyond that, tech-centric optimisation steps can further lower 3PL fulfilment pricing. Here’s a look at some of the most significant of these strategies.

1. Demand Forecasting
Optimised 3PL management starts before logistics is even part of the picture. Stockouts, surpluses and delays are common obstacles that can lead to higher 3PL costs, and all begin with poor inventory management. Demand forecasting is the solution.

Machine learning models can analyse past demand trends to learn indicators of incoming disruptions. They can then predict demand shifts, informing more effective ordering and inventory processes. Businesses that adjust their inventory availability according to these insights prevent delays or shortages that may disrupt 3PL operations.

AI-driven demand forecasting is particularly valuable for the 63.5% of shippers who outsource their warehousing to 3PLs. Preventing stockouts and surpluses avoids dead inventory or wasted space, reducing third-party storage costs.

2. Supply Chain Modeling
Businesses can apply machine learning analytics to their larger supply chains. Digital twins offer a virtual representation of the entire supply network, making it easier to spot inefficiencies or risky dependencies. Addressing these areas can minimise 3PL fulfilment pricing.

The vast majority of supply chain executives today hope to restructure these networks to make them more agile or resilient. These changes can include near-shoring to minimise transportation distances and costs or utilising distributed sourcing to prevent stockouts. Whatever the specifics, it’s virtually impossible to understand where to implement these changes without supply chain transparency, which virtual models provide.

Analysing supply chain digital twins with AI furthers these benefits. AI can identify inefficiencies or other issues human analysts may miss. Businesses can then make more informed decisions about their 3PL processes in less time.

3. Digital Warehouse Management
Organisations managing their own storage facilities should implement digital warehouse technologies. Warehouses are notoriously inefficient, but any process delays can raise 3PL costs as carriers wait to load their vehicles. These detention fees can cost thousands an hour in some cases, so a more efficient operation can create significant savings.

Faster loading and unloading starts with inventory visibility. Cloud-based warehouse management systems (WMS) can consolidate real-time data on storage levels and locations to provide this transparency. Pairing these platforms with automated retrieval or pick-to-light systems helps move products through the facility far more efficiently.

Digital twins can help in this area, too. Virtual models of warehouse workflows can reveal bottlenecks to address to streamline operations, preventing lengthy detentions that may raise 3PL costs.

4. Automated Invoice Management
Businesses can also target 3PL fulfilment pricing more directly. While paying invoices may seem relatively straightforward, it’s often time-consuming and error-ridden when handled manually. Automating these processes can minimise unnecessary costs and boost overall efficiency.

Automatic payments are the simplest form of this technology. Despite that simplicity, this automation can yield savings, as it eliminates the risk of late payments that may incur fees. More advanced invoice automation tools can also negotiate contracts and assign different 3PLs for different jobs to get the lowest rate in each instance.

Across all use cases, automated invoice and contract management reduces human error so businesses no longer have to pay for avoidable mistakes. It’s also faster than manual alternatives, letting organisations accomplish more at once for higher overall cost efficiency.

5. Interoperability
Optimal 3PL management must also consider partner organisations’ technology. As more 3PLs embrace digital tools, businesses must ensure their solutions are interoperable with their partners’ to enable greater transparency and operational efficiency.

For example, 58% of logistics providers have adopted real-time tracking technologies. That can significantly improve supply chain transparency to prevent delays and other unnecessary costs, but only if businesses can easily access the data. They may need additional software or processes to convert data between platforms if one party’s system is incompatible with the other’s, leading to unnecessarily high IT costs and transmission delays.

By contrast, businesses don’t need to spend as much on digital tools if they partner with 3PLs using compatible systems. Higher interoperability means fewer steps and programs between data generation and analysis, enabling faster, more cost-effective responses.

Use These Strategies to Optimise 3PL Fulfilment Pricing
These five approaches are not the only ways businesses can improve their 3PL management but are among the most effective. Capitalising on these innovative strategies can help organisations improve transparency, boost efficiency and prevent disruptions to lower their 3PL fulfilment costs.

Cost efficiency in logistics becomes all the more important as supply chains grow increasingly complex. Using digital tools to drive down expenses and maintain better relationships with 3PLs is a crucial step in that journey.