Supply Chain Woes Force 3PL Providers to get Creative

Closer collaboration and a willingness to find different ways to move freight are among the ways that third-party logistics providers have been navigating the supply chain disruptions, delays and scarce capacity that have characterized the past two years.

The coronavirus pandemic, inflation and now the war in Ukraine and surging oil prices have created “an enormously volatile environment” for 3PLs to manage for their customers, said Jim Damman, chairman at MODE Global Transportation.

“I’ve been in this business over 40 years, and I’ve never seen anything like it,” Damman said during a panel discussion at the Transportation Intermediaries Association’s 2022 Capital Ideas Conference & Exhibition. And I agree with him! To help meet the needs of its customers, 3PLs have increased the level of collaboration between its truckload, less-than-truckload and intermodal divisions.

In many cases, that has meant moving away from familiar processes to find better ways to move freight.

Mark Christos, vice president of transportation at Matson Logistics, also emphasized the rising importance of supply chain collaboration.

In intermodal operations, he cited closer coordination among all partners, from dray carriers and railroads to shippers and receivers.

Improving utilization of intermodal container chassis at the ports, for example, can enhance efficiency for everyone, Christos said.

Randy Tutor, vice president of sales at Approved Freight Forwarders, said 3PLs’ relationships with their carriers have become even more important during the disruptions of the past couple of years.

“The relationships that we had pre-COVID allowed us to have success, but during COVID … it’s been critical,” he said. “The way you get capacity in a lot of cases is based on your relationship with your carriers.”

Approved Freight Forwarders also has heightened its focus on margins and cost control.

When capacity was readily available prior to the pandemic, “it was easy to take on business that’s not necessarily making any money for you,” Tutor said.

What adjustments has your company made over the past two years? Post a comment in the comment section. And more importantly, how have your customers responded. Most industry leaders agree, businesses have been flexible and understanding if they can get their orders on schedule.?