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Year 2025 - The Future of the 3PL Industry with Andrew Kelley
Year 2025 - The Future of the 3PL Industry with Andrew Kelley
ratings:
Length:
53 minutes
Released:
May 27, 2019
Format:
Podcast episode
Description
[00:21] Opening / Introduction [00:57] Tell us a little bit about what you’re up to. I spend all of my time in supply chain and logistics software, focusing on the lower-middle market. [01:54] What will the 3PL industry look like in 2025? There is a slow, creeping evolution of technology as CRM systems get better and better. These will make brokers more efficient and help them focus more on customer service, specialization, etc. This is largely a relationship business, and not all of it can be automated. In 2025, there will be more consolidation and technology will play a larger role. [04:43] What types of companies do you think will be at the top? Domestically, I think CH Robinson, JB Hunt, UPS, and FedEx are doing a decent job. A non-traditional 3PL is Amazon, who is both a customer and a competitor to some of the other domestic 3PLs. Internationally, DHL and some others are good partners with people that I talk to domestically. Hustling is mandatory for everyone in this space, but the twist is working smart versus working hard. [07:48] Do you see any of those tech names like Uber and Convoy being at the top of the heap in 2025? It’s never been easier to develop software and technology than it is right now because there are so many tools and platforms. The new entrants understand technology far better than the incumbents do. They have the potential to create a call option on success, but that doesn’t mean they’re all going to be successful. More domain expertise needs to be inside of these start-ups to completely understand the dynamics. The best founders that I’ve seen in the space humbly embrace what they don’t know and have good partners come in to strengthen their greatest weakness. [12:30] Tell us about some of the trends you think are going to impact the industry over the next five years. Historically, a lot of the industry hasn’t embraced technology. There is a fair amount of inefficiency. It’s hard to predict the evolution of technologies that will be impactful on the space. There’s a lot of discussion around blockchain. I’m not sold that there’s a use case for it. Automation is being tested in the US. Consolidation will be one of the ways the upper half of the 3PL industry will better compete. Of course, there is the migration from retail to ecommerce. [17:29] Ordering from sites like Amazon makes people think “why am I not getting this level of service from my 3PL?” The interface is much nicer, too. I’ve seen the best user interface people focusing on mobile. The mobile interfaces will get increasingly better. Web interfaces are getting better too. The tools used to find out where people are clicking on a website or on an app have gotten a lot better. [19:57] One trend I’ve seen over the past ten years is that the shippers didn’t necessarily have to pick a 3PL based on technology and investment. Now, they don’t want to buy their own TMS and integrate it into their ERP. They want to find a 3PL because they will know how to manage all of this already. It was a lot harder to integrate five or ten years ago. Still, the ability for a 3PL to provide a fuller solution is a benefit to them in servicing their customers. [21:41] What drives consolidation? Why should it happen? Global customers are looking for more visibility and more coverage. They’re looking for trailers to be dropped at warehouses at pre-determined times. The concept of providing a more wholesome overall service is at the heart of what’s driving consolidation and what I expect to continue. [23:12] You mentioned the global economy we live in. People are looking for global solutions. There’s the supply chain and the demand chain. On the demand chain, the market is heading towards anticipating where the demand is going to be. The concept of massive warehouses is breaking down. Smaller warehouses with micro inventory are getting more popular. [25:18] What emerging technologies will shape the future of supply chain and logistics? Machine lear
Released:
May 27, 2019
Format:
Podcast episode
Titles in the series (100)
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