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When it comes to logistics and warehousing, Third-Party Logistics plays a pivotal role in helping companies perform their supply chain operations efficiently and seamlessly and get the best returns on investment.
In this blog, you will unravel various insights into 3PL logistics automation and its several models for optimising your expenses and maximising value. Let’s get started!
What is 3PL logistics automation Pricing?
3PL pricing refers to the fees that 3PL logistics automation providers charge organisations for various services such as inventory management, transportation, shipping, and order fulfilment. These fees can be dependent on the number of products held, the distance traveled, the complexity of fulfilment operations, and supplementary services such as packaging or returns handling.
The price structure is frequently adjusted to the individual demands of the business, making it critical for enterprises to understand and negotiate these charges to maximise supply chain efficiency and control expenses.
It can depend on factors such as supply chain, region, and product volume.
Types of 3PL Services
Transportation Services
External logistics companies offer shipping and delivery services through different channels, such as trains, highways, and oceans. These services guarantee that products are moved smoothly from the storage facility to the customer. They utilise their extensive network and knowledge to improve travel paths, decrease travel durations, and cut costs, leading to a reliable and economical service.
Warehousing and Distribution
Third-party logistics companies offer a broad selection of storage solutions, ranging from simple storage spaces to advanced facilities equipped with climate control, security measures, and stock-tracking systems. These offerings assist companies in handling their stock more efficiently, guarantee quick and precise order delivery, and reduce the overhead expenses linked to the upkeep of their storage facilities.
Freight Forwarding
Logistics management for international shipping includes organising and managing shipping logistics across international borders. 3PL logistics automation providers manage the detailed paperwork, customs procedures, and legal requirements for shipping goods internationally.
Simply put, they act as middlemen between the people or companies shipping goods and different shipping services to guarantee the smooth flow of products through international borders.
Read more to know about enhancing efficiency: The role of automation in Third-Party Logistics
Understanding 3PL Pricing Models
Fixed Pricing: A fixed fee or price is set for a particular service period, depending on the predictability of costs.
All-in Rate Model: In the All-In Rate Model, the 3PL logistics automation charges a flat rate for all warehousing services. This charge normally covers storage, handling, labour, equipment, and any extra services needed.
Variable Pricing: In a variable price model, the prices charged might change according to seasonal fluctuations or other dynamic causes.
Cost-Plus Pricing: The Model compels businesses to pay the cost of warehousing services plus a predetermined markup or profit margin agreed upon with their 3PL logistics automation supplier. This paradigm provides a high level of transparency. Businesses can examine the direct costs and profit margins used by the 3PL logistics automation.
Activity-Based Pricing: This is a specific charge or fee based on certain tasks or activities performed. It can involve fees charged for labour, picking, packing, labelling, or special handling of services. It is beneficial for firms with diverse warehousing requirements, where different activities have varying degrees of complexity and cost.
How to Negotiate 3PL Fees
1. Understand your needs: It is essential to understand your requirements in terms of inventory management, shipping, or freight forwarding and benchmark them according to market rates. Be precise in describing your objectives, which will help you find a provider that offers cost-effective solutions.
2. Negotiate Smartly: Approach discussions with a precise grasp of your budget and each service’s value to your organisation. Discuss potential discounts for larger quantities or longer-term contracts.
3. Monitor performance: Track various key performance metrics or indicators, such as inventory turnover and order accuracy, which will help you narrow down the best third-party logistics provider that meets your standards and offers more value.
4. Leverage Technology: Use modern technology to streamline logistics processes. Set up systems for real-time tracking, inventory management, and data analytics. These technologies can help eliminate errors, increase productivity, and provide insight into cost-cutting opportunities.
5. Optimise inventory: Integrate your inventory with warehouse management systems, which ensures effective operations management and avoids overstocking or stockout issues. This helps reduce storage costs and enhance cash flow.
6. Review regularly: Regularly examine your 3PL logistics automation service agreements and prices. Regular reviews assist in discovering any needless expenditures or inefficiencies in the supply chain. Ensure that the services given align with your company’s needs and make adjustments.
Growth of 3PL in 2024
As per sources, the growth of 3PL logistics automation pricing in 2024 is expected to be large, driven by several causes, including the rapid expansion of e-commerce and advances in logistics technology. The global logistics automation market is predicted to reach USD 1.29 trillion in 2024 and USD 1.68 trillion by 2029, with a compound annual growth rate (CAGR) of 5.48%.​
Why Choose Addverb for 3PL?
At Addverb, we specialise in revolutionising third-party logistics with cutting-edge automation solutions.
- Dense storage solutions: Addverb’s Automated Storage and Retrieval Systems (ASRS) optimise storage by maximising vertical space usage, resulting in optimal space utilisation.
- Intelligent analytics: Our analytics provide valuable insights into inventory, slotting, orders, and performance, allowing for more excellent decision-making and operational efficiency.
- Cost-benefit: Addverb’s automation dramatically decreases operational expenses while successfully addressing labour shortages, increasing total productivity.
- Multi-client flexibility: Our blend of fixed and flexible automation solutions enables you to service various clients while increasing revenue and operational scalability.
Enhancing 3PL Operations with Addverb’s Advanced Robotics Solutions
Addverb’s Autonomous Mobile Robots (AMRs) aim to transform 3PL logistics automation by increasing productivity, minimising mistakes, and optimising space utilisation. These robots utilise powerful sensors and AI-powered technologies to autonomously navigate warehouses, speeding material movement and order fulfilment operations. Integrating AMRs into your logistics operations can drastically reduce costs and enhance operational efficiency, allowing you to better control and perhaps lower 3PL pricing.
Addverb’s Zippy robotic sorter provides high-speed, accurate sortation, which can dramatically cut operational expenses for 3PL logistics automation providers.
Zippy increases efficiency, lowers labour expenses, and reduces errors by doing up to 30,000 sorts per hour with 100% accuracy. This technology edge enables 3PL logistics automation suppliers to provide competitive pricing, hence boosting overall service quality and customer happiness.
Wrapping Up
Streamline your 3PL logistics automation operations with Addverb’s cutting-edge automation solutions. Our unique technology can help you increase efficiency, optimise space, and cut costs partner with us to transform your logistics and drive growth.
We also offer proactive decision-making and improved supply chain visibility by leveraging real-time data analytics and AI insights. Our skilled staff will ensure seamless integration with your existing systems and provide exceptional support.
Addverb can help you transform your warehouse operations and stay competitive.
Founded in 2016, Addverb offers complete robotics solutions for warehouse and industrial automation, with a strong global presence through its subsidiaries worldwide. The company provides a range of in-house automation products, including Autonomous Mobile Robots, ASRS, and sorting technologies. It serves over 350+ clients, including well-known companies such as Coca-Cola, Amazon, and DHL.
