Plan, procure, execute, & track transportation for every shipment across your supply chain & logistics operations
A SaaS solution to help grow your business by achieving 100% perfect order execution at high volumes
Increase vehicle capacity utilization and customer promise adherence
Grow your business with omnichannel presence and automated pickups
Consolidate shipments for hub to hub movement across land and air
Real-time customer communications and collect accurate PODs
Orchestrate logistics operations with multiple 3rd party carriers
Achieve cost effective, scalable, sustainable, and customer centric deliveries
Orchestrate all your cross-border logistics operations with ease
Improve address accuracy, ensure first-attempt delivery success, reduce costs and boost customer experience
Gain end-to-end shipment visibility, get proactive alerts, and send customers live tracking links
Grow business in a dynamic world and manage operations across First, Middle & Last mile
Delight customers by seamlessly managing store and online orders across own fleet and 3rd party
Reduce freight costs & get end to end visibility across shipments
Directly Jump To
The role of 3PL in last mile delivery has become increasingly important in the last few years, enabling businesses to carry out scalable, cost-efficient, and faster delivery fulfillment. In fact, the global 3PL market is expected to grow at a staggering CAGR of 8% from 2021-26 and is forecasted to reach USD 1.75 trillion by 2026. In the North American region alone, 3PL service providers account for more than 12.4% of the total logistical activities.
With consumers demanding hassle-free deliveries at their doorsteps within minutes, e-commerce retailers face the challenges of increased competition and rising operational costs. Moreover, the additional complexities of handling necessary documentation, maintaining an optimized inventory, and smooth returns order management tend to take a heavy toll on operational costs as well.
The role of 3PL in last-mile delivery operations is to detangle the supply chain complexities for frictionless delivery of items and keep the rising last-mile costs under check.
But what activities does this actually involve, what benefits can right 3PL offer in last mile delivery orchestration, and how can businesses leverage multiple 3PLs for amplified results – we discuss the answers to these and many other questions in the next sections.
Last-mile delivery is the final and the most critical step in the delivery process, which involves the movement of goods from the warehouse or retail store to the customer’s doorstep. Also referred to as Final mile delivery, this is the last step in the logistics process following the first mile (transportation of goods from seller to hub) and middle mile (hub to hub) delivery.
Businesses are continuously investing in smart automation to scale their last-mile delivery operations and stay ahead of customer expectations. Partnering with 3PL service providers for last-mile processes enables business users to ensure shorter delivery times and maintain a cost-effective funnel. This becomes extremely critical since last-mile operations constitute up to 53% of the total shipping costs.
Businesses either manage the last-mile delivery operations in-house or outsource them to a 3PL service provider. Self-owned resources, such as vehicles, riders, warehouses, etc., come as an additional financial burden and might fail to deliver optimal results as the businesses scale or expand their horizons.
This is why the role of 3PL in last mile delivery is of extreme importance. 3PL service providers help diversify business horizons by helping businesses to reach out to newer markets. They help cater to different types of deliveries and upscale or downscale the operations as and when required.
Enterprises are seeking newer alternatives to deliver faster and keep the customer satisfied in a cost-friendly manner. Ensuring a robust, hassle-free delivery experience for consumers is critical in a hyper-competitive business world, as shown by the following stats:
Next, we discuss the major challenges in traditional or manual management of last mile deliveries that help understand the nature of the role of 3pl in last mile delivery.
As mentioned above, last-mile delivery operations constitute more than half of the total logistics budget. Moreover, many customers are not willing to pay for extra costs even when expecting same-day deliveries.
Add to that the extra cost of managing the return orders, order delays, or order cancellations. With growing trends among customers demanding free shipping, retailers and e-commerce players are investing in smart automation to accelerate the process at lower rates.
Delivering a frictionless customer experience is one of the most critical aspects of last-mile delivery success. Businesses must develop efficient frameworks to maintain and manage orders, seamlessly execute return order management and ensure uninterrupted supply chain flow when faced with delivery roadblocks.
During rush hours, retailers often face the tedious task of managing bulk orders, and if not executed properly, it results in customer disappointment. Without technology or a 3PL provider, enterprises find it tough to ensure the successful completion of multiple deliveries due to long routes and even longer delays.
Robust route planning is the very foundation of a seamless last-mile delivery experience. However, manual route planning is time-intensive and can take a few hours to a few days. Moreover, inaccurate mapping due to manual planning remains a critical challenge.
Over 95% of riders involved in last-mile delivery have had trouble with inaccurate mapping in some manner. Another obstacle for delivery executives is that it becomes impossible for enterprises to combat a sudden surge in traffic or bad weather conditions and provide alternate routes in real time.
Lack of transparency in last-mile operations is a common woe among enterprises. Without smart automation or robust 3PL networks, enabling real-time visibility into business operations becomes tricky and may result in potential delays. Establishing a real-time communication channel with your riders and providing them instant updates regarding the order list increases first-delivery attempt delivery success rates. Hence, the role of 3PL in last mile delivery is multi-faceted and goes beyond the meager transportation of goods.
Delay in deliveries not only adds up to piling costs but also significantly derails the customer experience. Let us take a look at a couple of numbers:
Late deliveries result in inconvenience for consumers, affecting the brand image and customer loyalty. Without result-oriented frameworks and a dedicated workforce to carry out timely deliveries, enterprises will struggle to meet the rising demands and increase business growth.
Without 3PL partners or smart solutions, tracking consignments in real-time is a near-impossible task. While managing multiple deliveries on the go at the same time, business users need to know about the whereabouts of the driver and order status at all times.
Smart logistics solutions like Shipsy’s Courier Aggregator platform provide live status updates across carriers in a standardized format via a centralized dashboard. Moreover, customers also demand to be provided with instant updates and notifications at every delivery touchpoint. The inability to do so may also result in failed deliveries as the customer might not be available during the exact time of delivery.
A lack of planning and robust frameworks increases the total ownership cost and hamper productivity, affecting the customer experience. Although not an easy task, streamlining the operations and delivering a positive CX enables brands to increase revenue by 4-8% above their market.
In the absence of intelligent solutions or streamlined capabilities, it becomes challenging to share instant updates with customers and keep them in the loop. Therefore, brands also need to develop communication platforms across channels (WhatsApp, Email, Social Media, and Website) to allow quick redressal of customer grievances.
The modern customer has a wide array of demands, and keeping them satisfied is imperative to drive conversions and maintain loyalty. The role of 3PL in last-mile delivery becomes critical for enterprises wanting to realize their critical business objectives and deliver positive outcomes. 3PL service providers, with their dynamic network and technical acumen, ensure complete transparency into the business processes for the stakeholders involved and orchestrate enterprise growth.
The modern-day consumer not only pays significant importance to product quality and pricing while ordering a product but also to the delivery experience. With the rapid digitization of products and services, consumers have come to expect more for less when they tap the ”order” button on an app or a website.
The role of 3PL in last mile delivery includes streamlining the delivery fulfillment process at various touchpoints and attaining positive outcomes- reducing cost, saving time, and making business processes transparent to concerned stakeholders.
A robust 3PL partner leverages state-of-the-art technological capabilities and platforms to automate tedious tasks, presents a unified interface for customers and employees, and enables buyers to raise alerts hassle-free in case of any discrepancy.
In short, with smart automation for managing 3PLs, businesses can attain a 360-degree view of the last mile processes, notify riders instantly on the go and pave the way for superior CX via enhanced communication.
Future-ready enterprises realize the critical role of 3PL in last-mile delivery operations. Last mile delivery consists of various touch points- warehouse picking, packaging, delivery, and a robust 3PL service provider takes care of the entire order fulfillment complexities.
In this section, we explore the various benefits of choosing a 3PL partner for last-mile delivery management:
Many enterprises are turning to 3PL providers because they allow them to save a significant amount of money. Since 3PL partners work with multiple companies, they can offer tailored pricing at cheaper rates to each prospect. Hence, bridging the gaps related to the goods movements, logistical transportation, and communication around that is one massive role of 3PL in last mile delivery.
In-house last-mile delivery management requires businesses to maintain and manage their fleet. In that aspect, courier aggregators provide enterprises with services from numerous 3PL providers, and they can select partners based on pricing and preference.
Some customers may want products delivered to their doorsteps faster than others. Often, customers also demand same-day delivery features while purchasing online. It was a luxury when Amazon started the same-day delivery trend a few years back. Fast forward to 2022, it has become the new normal. Consumers demand quicker, faster, hassle-free delivery of products, with complete visibility into the delivery process.
By partnering with a 3PL provider, enterprises can provide same-day, next-day, or even 2-hour and hyperlocal delivery services to their customers.
3PL service providers specialize in shipping services, operating with multiple fleets at one time to carry out deliveries on time. Various 3PL companies leverage the best in AI, ML, IoT, and operational analytics to predict and prevent any anomalies and ensure the uninterrupted flow of the supply chain.
Another interesting role of 3PL in last mile delivery is that they make customs navigation easier, more streamlined, and hassle-free by leveraging digital documentation. Coupling their 3PL service providers with smart logistics automation with digitized documentation capabilities, the retailers can now say goodbye to the long documentation and procedures and deliver products on the shortest notice.
Robust 3PL logistics solutions enable enterprises to attain real-time visibility into the order status and movement of goods along the supply chain. Apart from business users, even retailers and customers can track every step of operations in the last mile.
Stakeholders also get access to status updates across carriers in a standardized format via interactive and dynamic dashboards. In case of potential delays, the solutions send automated updates to the customer, informing them about the same.
One of the advantages of investing in smart automation is enhanced transparency and seamless communication between e-commerce retailers and consumers. Both business users and customers can easily access a centralized dashboard tracking the status of each order.
Moreover, intuitive apps and intuitive 3PL management platforms also provide regular updates to buyers at every interval in the delivery process. As a result, brands not only ensure the successful completion of the assigned orders but also significantly improve CX to gain trust and increase loyalty.
Last-mile delivery is the costliest juncture in the logistics supply chain. Leveraging 3PL services and automation is crucial for businesses that want to scale and grow. As order volume increases due to increasing demand, so do the operational costs. Partnering with a 3PL service provider enables businesses to cater to multiple delivery types – next day, same day, hyperlocal, etc. In addition, since a 3PL has a wider network spread throughout, retailers can complete deliveries across a wider geographical area.
Intelligent 3PL solutions streamline milestone-specific alerts for all the stakeholders involved. With ETAs sent out to consumers before the start of delivery fulfillment runs, customers can be available at the time of delivery or reschedule as per preference. Customers are also sent instant alerts via email/SMS/WhatsApp, notifying them during important delivery milestones.
As communication channels become transparent, buyers can also raise tickets regarding any issues for instant grievance redressal. Additionally, retailers can seamlessly verify instances of failed deliveries, delivery reattempts, and even frauds due to the dynamic nature of the alerts.
As businesses continue to scale and grow, seamless order management to manage the incoming flow of orders becomes necessary. Additionally, e-commerce providers or retailers have to deal with a huge stock of returned items, with over 20% of online orders being returned.
A reliable 3PL service provider helps businesses efficiently manage the delivery fulfillment process and build a positive brand reputation. However, a single 3PL partner might not match up to every delivery requirement due to the restricted area of operations or not dealing with certain types of orders.
Therefore, it becomes critical for future-ready organizations to collaborate and manage multiple 3PL providers via a courier aggregator.
Intelligent courier aggregator platforms enable retailers to track, allot and optimize multi-dropout routes hassle-free, choose a suitable 3PL service as per requirements and get access to the following benefits:
With multiple 3PL providers under their wing, businesses can select from multiple carriers based on their pin-code serviceability. Retailers are able to expand their geographical coverage and deliver products within or across countries. Being limited to specific pin codes is not an acceptable business proposition, especially for aspiring businesses looking to grow and scale operations.
The modern-day consumer simply has too many options to choose from when placing an order. From 24-48 hour delivery, same day delivery, hyperlocal delivery, etc., retailers must ensure they deliver products to customers within the desired timeframe. Having multiple 3PL partners at their disposal enables enterprises to tap into the varied customer demands and carry out desired deliveries in a cost-effective manner.
A well-laid network of multiple 3PL providers allows retailers to cover wider pin code areas and get access to the delivery fleet in the quickest manner. In addition, smart courier aggregator platforms enable businesses to assign shipments to the best available carrier based on location, cost, performance, order value, COD, etc.
Intelligent AI-enabled algorithms provide riders with live updates regarding the best route via dynamic routing. Enterprises can select 3PL services based on the customer’s preferred mode of payment for faster delivery fulfillment.
Every courier aggregator has their own monetary relationship with each 3PL service provider. Therefore, retailers and businesses can select a 3PL partner of choice offering the best services at the cheapest rates.
Businesses can now select the best courier service based on their requirements and other critical factors such as location, cost, returns management, etc.
Shipsy’s smart courier aggregator platform is a solution of choice for businesses to manage multiple 3PL services hassle-free, from anywhere, at any time. E-commerce players and online retailers can now select the most suitable 3PL partner and manage multiple 3PLs via a unified dashboard.
Our smart solution enables business users to track and share live updates across carriers in a standardized format and seamlessly connects all vendors on a single platform. Moreover, enterprises can detect fake delivery attempts and reduce RTOs with proactive customer communication.
Shipsy’s intelligent courier aggregator platform unlocks a frictionless supply chain framework in the last mile operations with a host of benefits:
To get started with Shipsy’s smart 3PL management platform or to get a better understanding of how we help retailers and businesses manage their end-to-end logistics operations, please get in touch with our experts for a customized free demo.
The global eCommerce is booming and 3PL Logistics is experiencing the ripples of its growth. Explore various challenges related to 3PL logistics in modern retail & how smart 3PL management rids them.
Looking for ways to scale your delivery operations across diverse delivery SLAs? Here is how having multiple 3PL partners can help you scale deliveries, widen your reach, and amplify your audiences.
