AI in 3PL: what your customers mean when they ask for it | Socius24

There’s a rather unnerving statistic doing the rounds in the third-party logistics world at the moment. According to the Annual Third-Party Logistics Study from NTT DATA and Penske Logistics, 74% of shippers say they’d be at least somewhat likely to switch 3PL providers based on their AI capabilities.

So, naturally, the response from a lot of providers has been to start saying “AI” as often and as loudly as possible. Which is understandable. But it skips straight over a rather important question that not as many people are asking: when a shipper says they want AI in 3PL operations, what do they actually mean?

Because the answer, when you sit down and ask them in more detail, turns out to be a lot less exotic than the word implies. And, helpfully, it’s a lot more achievable.

What “we want AI” usually means

When you get past that whole AI buzzword thing, and instead, ask your customers what they actually want, the same handful of things come up over and over again.

They want to know exactly what stock you’re holding for them, and where it is, right now, rather than how things stood at close of business yesterday.

They want to understand what they’re being charged and why.

And they want the picking, packing and moving of their goods to be quick and accurate, especially when their volumes spike.

Now, notice what’s not on this list.

There’s no mention of a robot army. Nobody’s asking for a self-driving forklift. What they’re describing is, for the most part, good information delivered in real time, and an operation that’s efficient enough to act on it. Some of that will benefit from clever software. Quite a lot of it is really just a question of whether your underlying data is any good.

The understanding understatement

Which is, ironically, the catch.

Every single one of those customer demands is relying on the same thing: accurate, real-time inventory data. If your warehouse management system doesn’t actually know what’s on your shelves, right now, at this exact moment, then any visibility you’re offering is, well, fictional. Your billing is effectively guesswork, and any optimisation you might try to bolt on top of that house of cards will get busy optimising the wrong numbers.

We’ve banged this drum before, but it bears repeating, because it’s the least exciting and most important part of any warehouse optimisation conversation. The fancy stuff only works if the boring stuff underneath it is right. If you get the WMS foundation solid, with inventory accuracy you can actually trust, then suddenly all of those shipper demands become things you can deliver rather than things you have to talk your way around. 

Real-time visibility: show, don’t tell

Let’s take the above one at a time, because this is where things can get tangible.

The first requirement, real-time visibility, is the new baseline. It used to be a nice-to-have. Now it’s just expected, and any shipper who can’t see their own stock is a shipper who’s already halfway out of your dock door.

Fortunately, this is exactly what our User Services Portal (USP) is built to do. 

It sits on top of Blue Yonder Dispatcher WMS and gives your clients a live (safe, secure, role appropriate) window into their own inventory and activity. And the data that they see is drawn straight from the real-time data in Dispatcher itself. So, when a customer asks, “where’s my stock?”, the answer doesn’t have to be emailed to them after a four-hour trek around the warehouse while you hunt and gather the info. Instead, they can just log in to their account and have a look.

And the information they can see is the same information that you’re working from, which is rather the point.

Billing they can understand

The second request, knowing what they’re being charged and why, is one that people can often tend to underestimate. But think about how much of the friction in a 3PL relationship comes down to a confusing invoice at the end of the month, while your client squints at it, trying to work out what half the line items mean.

Our eBilling product sits inside of USP and turns that same real-time Dispatcher activity data into clear, accurate billing. Every charge can be traced back to something that actually happened in the warehouse, and your client can see that. 

This matters, because shipper trust has been slipping. That same Annual 3PL Study found that the share of shippers rating their provider relationships as successful dropped from 95% to 89% in a single year. And very little erodes trust faster than a bill that nobody can explain. Sending your customers invoices that they can follow, line by line, is an incredibly underrated way to keep them. 

Where Pulse comes in

The third customer demand, that picking and moving needs to be quick and accurate, is where AI optimisation can step in. Because once your inventory data is solid, this is the bit where well-aimed software can genuinely pay for itself.

We use Pulse for this, offered through our technical partnership with Optioryx. 

To be absolutely transparent about what it is and what it isn’t: it’s not a megalith that runs your whole warehouse. It does one job, which is making picking more efficient, and it does that job very, very well. It works out smarter pick sequences and shorter routes based on what’s actually happening on your floor right now, today, so your picker can cover less ground and get more orders out than they would otherwise be able to do. 

So, what do you tell a 3PL customer who wants AI?

Job one, you don’t need to panic, and you definitely don’t need to start sprinkling the word “AI” over everything you say. What you could do is far less dramatic and far more durable. Get the foundation right, so your inventory data is accurate and live. Give your clients real visibility of that data through a portal like USP. Make your billing transparent and traceable through something like eBilling. And aim focused optimisation, like Pulse, at the specific jobs where it can push your KPIs in the right direction. 

If you can do those things then it’ll stop good clients from wandering off to one of your competitors, who might be able to talk a better game but won’t be able to tell them where their pallets are.

If you’re a 3PL working out which of these capabilities you can actually deliver, this is the sort of thing that we help our customers (and their customers) with all the time.  Book an obligation-free discovery call now.