3PLs Need a Multi-level, Parcel TMS Architecture to Maximize Client Satisfaction

The rapid rise of eCommerce has pushed B2C businesses to put more focus on one-to-one marketing and product offerings, adapting content communications with individual customers to emphasize the things that matter most to them. Establishing these one-to-one relationships undoubtedly strengthens customer loyalty and helps boost sales.

Yet when it comes to logistics, B2C shippers often fail to personalize their customers’ shipping preferences and delivery experiences, even though the doorstep is the first real contact customers have with the brand. The problem is exponentially worse for 3PLs who manage final mile logistics for a wide range of B2C clients, each of whom wants to maximize their brand’s impact at the point of delivery.

This article will explore how new parcel TMS platforms built on multi-level architectures enable 3PLs to adapt and optimize the delivery experiences for every client and every end customer. If 3PLs want to differentiate themselves in a highly competitive market, a client-centric architecture is essential.

Legacy Shipping System Architectures Limit 3PL Agility

Older shipping systems were designed to support single-shipper deployment. One database, one set of user roles and permissions, one shipping workflow. The goal was simply to print labels for multiple carriers as quickly as possible. But, with the eCommerce boom and the evolution of B2C supply chain requirements, many 3PL clients recognized that their brand value was directly tied to their customers’ delivery experience. Unfortunately, changing legacy system workflows or adding business rules require costly customizations and long project timelines, limiting the ability to meet increasingly high delivery expectations.

Migrating legacy shipping systems to cloud environments didn’t help much. It basically amounted to “hosting” an older architecture in a new environment. While more modern shipping systems architectures have been designed to operate in shared multi-tenant cloud environments, each tenant had to share the same attributes as every other tenant. Customizations were even more limited and costly, further extending client times to benefit and 3PL revenue recognition.

These constraints have left 3PLs without the ability to easily adapt to client-specific needs and compete effectively in today’s demanding logistics market.

Multi-level Architectures Enable 3PL Community Management

Designed with 3PLs in mind, a new generation of parcel transportation management systems (TMS) enables 3PLs to create and manage a community of client tenants, each configured to meet unique fulfillment requirements. These multi-level, cloud-native platforms enable 3PLs to define roles and permissions for internal users or groups of users or grant administrative permissions for each client to manage their own users and sub-tenants.

“Multi-tenant” usually refers to a SaaS solution provider’s ability to stand up and configure more than one customer in their cloud environment. But multi-level architectures allow SaaS solution providers to grant 3PLs the control to configure user roles and permissions for sub-tenants. And for those sub-tenants to do the same for their users and sub-tenants, and so on.

The vertical scalability of multi-level architectures is especially beneficial to 3PLs as it allows them to offer an infinite variety of individualized solutions for clients and clients’ clients deployed on the same parcel TMS platform. Cloud-native, microservices-based, and modular parcel TMS platforms like Sendflex help 3PLs effectively preside over and control a community of client tenants in ways that were impossible to manage with older, legacy parcel platforms.

Community Management + No-code Configurability = 3PL Agility

In addition to providing 3PLs with community management capabilities, Sendflex eliminates customizations by offering a no-code approach to adapting solutions to individual client requirements. Having more granular control over system behavior at both the 3PL tenant and client levels (if permitted) translates into lower client attrition rates, faster time to benefits, and accelerated time to 3PL revenue.

Sendflex no-code business rules or “optimization instructions” span a wide variety of areas, including:

Collaborative Apps

There were 21,253 3Pls in the U.S. as of 2023. In a hyper-competitive industry known for high churn rates, it is imperative that 3PLs find ways to make their services more client-centric, transparent, and “sticky”. Providing critical data that is important to clients or to their customers is a challenge with closed legacy architectures.

A multi-level architecture segments and stores valuable data safely in client-specific tenant databases, enabling 3PLs to grant their clients permissions to access Sendflex rating, planning, simulation, shipping, and tracking apps. By sharing capabilities across a wide range of client roles, a 3PL can provide value-added services throughout an enterprise.

Buy/Sell Rates

Many 3PLs make money by marking up shipping rates provided by transportation carriers. Rules for determining markups should be flexible enough to consider many different factors, including customer status (revenue, support costs, volume, payment terms), locations, preferences, and carrier services.

Sendflex enables 3PLs to easily configure client-specific instructions for applying markups or discounts to base rates, plus accessorials during quotations, planning, fulfillment, simulations, and shipment processing.

Intelligent Carrier Service Selections

As businesses implement omni-channel fulfillment and carrier diversification strategies, deciding how, when, and where to use carrier services has become increasingly complex. 3PLs can only meet client service levels while protecting their buy/sell margins if they automate data-driven, cost-effective carrier service selection decisions.

With Sendflex, carrier optimization instructions qualify carrier services based on many complex factors, including delivery service area, shipment attributes (weight, dimensions, hazmat, etc.), customer preference, time in transit, and, of course, carrier costs. Instructions can also be configured to demote or promote carrier service rank based on performance metrics like on-time delivery, damage, or billing errors.

Primary Carrier Tiered Incentive Monitoring

A recent Pitney Bowes survey revealed that one of the top reasons shippers avoid carrier diversification is the fear of losing their primary carrier tiered incentive discount. 3PLs are especially sensitive to potential disruptions to their margin forecasts and service quality levels if these volume-based discounts are lost.

Sendflex monitors where 3PLs are in relationship to their primary carrier tiered incentive targets. Optimization instructions can be configured to disqualify alternative carrier services when volumes or spending are not tracking to meet incentive targets and automatically route to alternative carriers when those incentive targets are satisfied.

Compare Aggregate Parcel Rates vs. LTL Rates

LTL costs per pound are significantly lower than parcel services. Margin-conscious 3PLs often can’t take advantage of parcel-to-LTL mode shifting opportunities because legacy shipping systems don’t support parcel shipping and LTL rating very well, or if they do, they only look at one order at a time during shipment processes. By the time parcels roll down the conveyor to shipment processing, it is too late.

Using a powerful planning optimization module, Sendflex has the ability to look across orders for parcel-to-LTL mode shifting opportunities further upstream from the point of shipping. 3PLs can configure customized instructions that define when parcel consolidation decisions should be applied.

Personalized Labels, Forms, and Documents

The point of delivery is often a consumer’s first contact with a company’s brand. Printing customer-facing labels, forms, and documentation is an excellent opportunity to emphasize the brand and offer promotions that maximize loyalty. Unfortunately, legacy shipping systems don’t accommodate customizing brand-specific outputs; if they do, they can’t be easily changed or targeted to specific customers.

Sendflex provides a low-code solution. Using a Sendflex extension within Visual Studio, 3PLs can customize client-specific labels, forms, documents, and notifications. Any web developer familiar with HTML can modify templates and load them into Sendflex. Instructions can then be configured to determine how, when, and where outputs are printed. This allows 3PLs to utilize valuable label space to include client logos and promotional offers.

Sustainability

Everyone has had the experience of receiving a large package containing a very small product, surrounded by wasteful fill. Negative consumer sustainability experiences can tarnish the brand, especially if poorly packed cartons result in damage and product returns. Meanwhile, 3PL margins are crushed by unexpected dimensional weight adjustments on unnecessarily large packages. Waste is money.

Sendflex’s cartonization instructions provide 3PLs with a way to control more sustainable and transportation-cost-effective packing processes. 3PLs can easily configure percentage fill, fragility, don’t pack with, nesting, and other SKU-specific business rules that optimize sustainability by removing air from cartons. This effectively improves sustainability metrics, reduces packaging and shipping costs, and improves the customer delivery experience.

Supplier Portals

Many 3PLs, but especially 4PLs, manage inbound transportation or drop shipping from suppliers. While each supplier may have their own SKU-level attributes to deal with (hazmat, fragility, cold chain, etc.) 3PLs often have to apply a one-size fits all approach in terms of how business rules and branding policies are applied. Typically, one size fits none without heavy customizations. 3PLs will often struggle to enforce labeling and receiving processes.

Using Sendflex’s multi-level architecture, 3PLs can set up tenants for each supplier and enforce optimization instructions, including carrier service selections, billing accounts, shipping cost markups, packing, and labeling branding requirements. This helps streamline supplier efficiency while guaranteeing an optimized customer delivery experience.

ROI Simulations

Most 3PLs have to prove to current and potential clients that they can save them money and improve delivery performance. To do that, they often spend days developing simulations using tools like Excel, which is limited in scope and lacks the ability to apply client-specific business rules. This time-consuming process significantly lengthens the 3PL’s sale cycle or may fail to effectively demonstrate the 3PL’s actual value.

Sendflex features an in-platform, high-speed optimization engine that calculates 20,000 rates, times in transit, and instructions per second, without any reliance on carrier rating APIs. This opens the door to running unlimited “what if” simulations specific to each client’s circumstances. A non-technical 3PL employee can import shipping history data and quickly run simulations that compare a client’s actual cost and times in transit with 3PL proposed rates and instructions, thereby reducing the 3PL’s sale cycle and fostering a more collaborative sales approach. Say goodbye to Excel spreadsheets.

Sendflex’s Multi-level Community Management Architecture Sets the Stage to Maximize 3PL Client Loyalty

The complexity and costs of managing fulfillment and parcel shipping are massive, and since eCommerce still represents less than 16% of retail spending, it is likely to get worse in coming years. Sendflex parcel TMS is leading the way in providing 3PLs and their clients with the controls they need to compete in today’s marketplace.

To discover how Sendflex can help you leverage the valuable benefits offered by our multi-level, community management architecture, schedule a consultation with their experts today.

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