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How retailers in the Philippines can leverage 3PLs to scale deliveries during the festive season

By Soham Chokshi

FOR the average consumer, the holiday season is a time to get together, celebrate, and, most of all, shop! Retailers in Southeast Asia should expect a more hectic holiday season this year, according to a survey from MiQ. With the e-commerce market geared to grow into a $12-billion industry by 2025, according to a report by Google and Temasek, 56% of Filipinos are increasing their spending versus last year, which has given rise to expectations for sales to remain high this festive season.

The apparent solution for retailers to tackle high order volumes would be to scale with third-party logistic (3PL) services. Outsourcing can be a great solution. However, managing high volumes across multiple vendors can be tedious and complex. Let’s look at how the right technology partner can help retailers turn this into a competitive advantage.

ENSURE DELIVERY RELIABILITYDelayed deliveries are a cause of concern for e-commerce players, especially during the peak season. Partnering with the right 3PLs can effectively address this challenge.

3PL providers have the distribution network and expertise to dramatically reduce the odds of late deliveries during busy periods by adhering to the service-level agreements (SLAs) specific to the delivery type. Logistics service companies leverage partner networks to reduce delivery-related risks in case one fails to deliver as expected. Working with multiple carriers can also help businesses gain various advantages by streamlining delivery operations according to different regions and delivery types. Such partnerships also enable greater flexibility, allowing businesses to gauge logistics providers based on first-attempt delivery rates, on-time deliveries, delivery accuracy, and even other business-specific metrics such as a white glove or temperature-controlled deliveries.

CHOOSE THE RIGHT LOGISTICS PARTNERChoosing the right delivery partner is the first and most critical step to success. Prioritizing data over manual biases serves as the right approach. Automation and AI-powered smart logistics management platforms automate 3PL selection after factoring in cost, serviceability, network, expertise, first-attempt success rate, customer SLAs and other metrics to execute same-day, next-day, or other fulfillment windows. Since such sophisticated tools automate decision-making and expedite allocation processes, they improve on-time deliveries by up to 24 percent.

OPTIMIZE UTILIZATION OF OWN FLEET AND 3PLAllocating tasks between your own fleet and a 3PL provider can be a time-intensive process. Under-utilization of the fleet can be costly, as there have been instances where deliveries have been outsourced while full-time riders stay idle.

Prioritizing between an in-house fleet and logistic partners can bring greater efficiency to the business. Smart auto allocation engines consider payment type, SKU type, invoice value, weight, order volume, vehicle type, and more. Such capacity-based allocation enables advanced trip planning for retailers. It offers greater visibility into the future capacity of the retailer’s own fleet based on customer SLAs, thereby improving logistical planning.

ENSURE GREATER OPERATIONAL CONTROLTraditionally, retail and eCommerce businesses find operational control challenging when outsourcing their logistics processes to a third party. This situation worsens when a 3PL collaborates with other logistics partners for deliveries. However, smart logistics management solutions enable businesses to manage, track and monitor multiple 3PL providers’ operations via a unified dashboard for complete visibility.

STANDARDIZE NDRS TO SIMPLIFY TRACKINGOutsourcing deliveries can help the business save time and money, but different vendors may have their own unique interfaces, making it harder to track and adapt to these solutions, for instance, having multiple terminologies against a non-delivery reason (NDR).

Logistics management tools consolidate diverse NDRs into a single subhead to simplify the problem statement for retailers. It also helps validate these NDRs from the end customer and plan accordingly.

MINIMIZE RETURN-TO-ORIGIN INSTANCESInaccurate addresses, delays, poor scheduling, and unavailability of customers during delivery amplify “return-to-origin” instances. It adds an extra cost burden to the business.

Real-time tracking can reduce instances of return-to-origin. The system triggers a message to the end customer once the consignment is out for delivery. The message contains a tracking link with a delivery estimated time of arrival that apprises customers of the upcoming delivery attempt and increases their chances of availability at that time, boosting the first-attempt delivery rate. Customers can also request to reschedule deliveries at their convenience. All these features improve customer experience by 64%, shrink return to origin instances by 18%, and lower logistics costs due to reattempts.

UNIFIED CUSTOMER COMMUNICATIONPartnering with multiple 3PLs may expose end customers to diverse messages from logistics partners across the parcel journey. These messages may not be positioned best to further the retailer’s interest and appear dissociated from the brand.

A smart logistics management platform offers unified and branded customer communication experiences irrespective of the 3PL. The retailer can also utilize the tracking page to market its products. Moreover, the system automatically notifies delivery stakeholders of various delivery milestones. It keeps the retailer, logistics partner, rider, and end customer on the same page throughout the delivery process.

ARRESTING FAKE DELIVERIESRiders using mock GPS locations to fake delivery attempts is a rising concern. It jeopardizes profitability and customer experience, which is critical to customer retention.

A smart courier aggregation platform displays and tracks predefined key performance indicators. The platform eliminates fake deliveries by helping retailers verify non-delivery reasons, especially when the system-suggested route and rider location do not match. It also checks the rider’s device for mock GPS apps and bars them from accepting any orders until they disable such conflicting features.

REDUCE LOAD ON IT TEAMSIntelligent logistics systems benefit from built-in application programming interfaces and reduce the engineering bandwidth load to integrate new carriers. It also integrates with multiple e-commerce portals, customer portals, and enterprise resource planning softwares, among others, to enable smoother business operations and faster partner on-boarding.

These features and capabilities put control back in the hands of retailers over their logistics operations so that they can reduce returns, enhance delivery profitability, and carve exceptional customer experiences for a profitable festive season.

Soham Chokshi is the CEO and Co-Founder of Shipsy.

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