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Are you looking for a way to simplify your eCommerce shipping and logistics? If so, consider using a Canadian third-party logistics (3PL) provider. This is a perfect option, whether expanding into the Canadian market or trying to find a better fulfillment solution. With all the benefits of working with a 3PL in Canada – from improved customer experience to reduced transit times – you’ll wonder why you didn’t jump on board sooner. Keep reading as we explore why you should use a Canadian 3PL!

What is a Canadian 3PL?

If you're an eCommerce seller, you know what it's like to be stuck with mountains of orders and need somewhere to put them before sending them. This is where a 3PL partner with prime warehouse space comes into play: allowing businesses to store their products in arrival-ready spots and quickly get them off to customers.

But what exactly is a 3PL? It stands for third-party logistics, companies specializing in taking care of the logistics needs of businesses related to freight shipping, distribution, and warehousing. On top of this, 3PLs should have integrations with top eCommerce platforms to collaborate on order fulfillment. Plus, they also need partnerships with mail carriers like Canada Post to ensure that products can be shipped safely from one destination to another -- something any successful business will want assurance on.

For more information about 3PLs, read our blog, The Ultimate Guide to Third-Party Logistics.

Why Would You Need a Canadian 3PL?

With Canadian eCommerce fulfillment, expanding your market share couldn't be easier. Canadian 3PLs specialize in handling eCommerce fulfillment projects - so why waste time trying to figure out Canadian customs when you have a Canadian 3PL expert ready to do it for you? They will not only make sure to guide you through all Canadian tax legalities, but they'll also ensure that your goods are shipped quickly, securely, and cost-effectively.

What Do They Do for eCommerce Businesses?

Canadian 3PLs have emerged as a critical partner for eCommerce businesses looking to expand their operations. Canadian-based logistics providers are taking the lead in getting goods shipped quickly and cost-effectively, regardless of where inventory is sourced. With Canadian 3PL services, businesses can feel confident that their products or services will move from supplier to consumer with speed and agility.

But Canadian 3PLs offer more than just fast delivery—they can also help companies find the right balance between location and labor. By choosing the right industrial real estate properties, Canadian 3PLs have access to quality employment opportunities and hyperlocal amenities that help create an efficient supply chain. It's all part of creating a winning strategy on the digital shelf!

Benefits of Using a Canadian 3PL For Your eCommerce Logistics Needs

Canadian 3PLs can offer your eCommerce business many logistics services you won't find with other companies. For instance, Canadian 3PLs bring the invaluable benefit of experience with Canadian regulations, so you won't have to worry about surprises. Plus, they can provide customs clearance and brokerage services; in other words, they take care of all the paperwork for you!

Canadian 3PLs also offer unbeatable convenience—they can pick up goods at induction points across Canada and provide an uninterrupted transition from start to finish. As a bonus, Canadian 3PLs let business owners get in on Section 321, which enables duty reimbursement or duty deferral for goods crossing the Canadian-American border. (Restrictions apply. Visit our Section 321 page for more information.)

Questions to Ask Potential Canadian 3PL Providers

1. Are the goods picked up in the U.S. by the third-party logistics provider and delivered to their Canadian warehouse/DC or to the customer in Canada?
2. Does the 3PL offer guaranteed direct service with a specific date?
3. Is there a way to track every order with the logistics provider?
4. Is the 3PL able to provide pick-and-pack services?
5. Is the 3PL well versed in sales taxes and duties?
6. Does the company offer last-mile delivery? White glove services?
7. Are there many warehouses across Canada owned and operated by the 3PL?
8. Do they have easy access to major population centers?
9. Can you access your inventory, orders, shipments, and operations via a web portal 24/7?
10. What kind of technology does the provider use? Integration-capable enterprise software is preferred.

Not All Canadian 3PLs Are Created Equal

Retailers have to navigate a constantly changing landscape, making it no surprise that 3PLs have become such a hot commodity. Most retailers understand the importance of finding the right Canadian 3PL provider that can help keep up with their eCommerce needs. But not all Canadian 3PLs are created equal: some offer comprehensive services like website hosting and mobile commerce enablement, while other Canadian 3PLs may provide basic warehousing and order fulfillment. To ensure you’re getting the perfect 3PL for the job, it’s important to take your time and do your homework. Analyze reviews, get reference reports, and be sure you’ve found a Canadian 3PL with all the bells and whistles you need for success.

Did You Know ShipHero is Also a Canadian 3PL?

Business owners around the nation can breathe a sigh of relief, ShipHero is one of the top Canadian 3PLs. Everybody has access to their fast and cost-saving Canadian warehouse locations thanks to their presence in Canadian cities such as Toronto and Vancouver, plus access to Calgary, Ottawa, Montreal, and Quebec City (to name a few). Canadian businesses can now receive up to a 20% reduction on all shipments annually - allowing them to save money and pass those savings along to their customers! So if you’re a Canadian business looking for top-notch shipping options – look no further than the Canadian experts at ShipHero.

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Click HERE to Schedule a Meeting Today

‍About the author: Maggie M. Barnett, Esq., is the COO of ShipHero. She is responsible for planning and executing the overall operational, legal, managerial and administrative procedures, reporting structures and operational controls of the organization. Barnett’s greatest strengths are leadership, risk mitigation, change management and a passion for business transformation. She is known for her expertise in delivering operational excellence and an ability to provide guidance and mitigating risk. Her leadership of ShipHero is grounded in a servant mentality, always doing the right thing for our stakeholders. Her passion for ShipHero comes from the ability to drive operational excellence throughout the organization impacting the lives of our employees, customers, and partners.

Follow Maggie on Twitter&LinkedIn.

If you're about to take your eCommerce business to the next level, selecting the right 3PL (Third-Party Logistics) partner is an essential success factor. Not only do they help manage your day-to-day operations and fulfillment but having a reliable 3PL can also streamline customer service, reduce costs, and drive growth. We'll outline key considerations so you can confidently choose a 3PL that meets all your unique needs!

3PL Partner Meaning

3PLs are the real MVPs of eCommerce. By leveraging 3PLs, merchants can offload a sizable portion of their supply chain management and never worry about fulfilling orders on time. With 3PLs handling everything from warehousing to order fulfillment and shipping coordination to retail distribution, exchanges, and returns, merchants can sit back and let their 3PL do all the heavy lifting. In the end, 3PL partners mean more time for merchants to focus on other areas of their business rather than managing their own warehouses or logistics.

How to Choose a 3PL Provider

3PL has revolutionized eCommerce, allowing businesses to choose the right 3PL partner and focus on maximizing sales rather than worrying about supply chain management. If you're considering a 3PL partner for your business, be sure to weigh these factors on how to choose a 3PL provider that's right for you!

Flexible and Feature-Rich Integrations

When you’re on the hunt for a 3PL, how do you decide which provider is the right fit? Capability is key: if your third-party provider doesn’t have the capacity and expertise to cover all your bases, from fulfillment services and reverse logistics to subscription box solutions, you may be in for a bumpy ride. Keep an eye peeled for providers offering flexibility and feature-rich integrations with your eCommerce platform – that way, as consumer demand continues to skyrocket, you can rest assured knowing you've picked a partner able to roll with the punches. With capability and scalability in spades, there won't be any supply chain kinks that they can't help you iron out!

Adapting to a Changing Market

When it comes to stability in the logistics industry, you deserve the best. That's why it pays to look for a 3PL with a track record of adapting to a changing market – ensuring your business that potential innovations won't rock their stability down the line. Plus, multiple locations allowing for shorter shipping times and increased national reach is a bonus – so you can have confidence that your supply chain needs are taken care of! An esteemed reputation for providing top-notch service is worth considering when it comes to peace of mind.

Communication and Trust

How do you ensure your 3PL has the best reputation around? Find a partner that knows the importance of making connections! It's not just about happy customers - it's about happy vendors, carriers, and employees. A great 3PL will take the time to understand your business needs, so communication is key here - make sure they take their engagement levels seriously and bring in their expertise. With a compatible culture and shared values, you can be sure they'll exceed expectations every step of the way.

Safety First

When it comes to safety, what you should look for in a 3PL is the same thing you’d do when checking the brakes on a cart: check twice and confirm. Spot-check that your 3PL has the most up-to-date PCI, FDA, and DEA certifications and a HAZMAT Shipping Certification. After all, safety first!

Top-Tier Customer Experiences

With a third-party logistics provider, customer service and attention to detail often make or break the relationship. The good news is that experienced 3PLs will rise to the occasion to provide business solutions that leave you nodding your head in approval, like how easy it is to calculate savings and track delivery times. Plus, with omnichannel retail taking over the market, you'll want to find a partner that knows how to navigate through these complexities and provide top-tier customer experiences. Look for someone with an impressive track record, a reusable approach, and expertise in handling similar operations.

Scale Without Breaking a Sweat

If you're feeling cramped and think it might be time to upgrade your operations, outsourcing is an ideal option. You only need the perfect third-party logistics provider who can make scaling up a breeze. Your provider can help you address peak demand without investing in physical infrastructure and personnel. Don't forget to ask them one crucial question: “What’s the maximum amount of scalability you offer?” That way, you'll know just how easily they can pick, pack, and ship your goods should demand suddenly skyrocket.

Customized Solutions

Third-party logistics can help your business stand out by providing customized solutions tailored to your unique needs. Each provider will offer a unique blend of software integrations, postponement strategies, and tailored production techniques - so make sure you work with an experienced 3PL who can leverage these things. Once you kick off the process, you'll be able to tap into cost savings while still providing excellent service.

Accuracy is Everything

When it comes to 3PL providers, there's no room for inaccuracy. If your 3PL can't keep its inventory and orders accurate, you're in for a world of customer disappointment and not-so-fun losses. Make sure the 3PL partner you pick employs a robust Warehouse Management System that keeps order and inventory accuracy levels high. It's worth all the effort to find the right provider because, in this business, accuracy is everything!

Respond Quickly and Effectively

Responding quickly and effectively when issues come up is a key factor of success for any company or individual. It can be the difference between a smooth-running operation and one that consistently trips up on large and small snags. Since no one can predict the future, understanding the importance of being responsive helps ensure that whatever comes your way is addressed in an efficient and timely fashion. Don't leave your customers hanging - make responsiveness a priority! After all, how would you feel if you were constantly waiting around for answers?

Enterprise-Level Technology

In this ever-changing technological era, how do you choose the right 3PL provider for your business? Well, it's simple: get yourself one that provides enterprise-level tech. Nothing says 'sophistication' quite like having a streamlined order-to-delivery process – and that's exactly what advanced technology solutions can give you. And while you might not require such complex systems now, who knows how future-proof you'll want your business to be in the near future? So don't take any risks - ensure your 3PL has robust technology from the get-go!

How Much is a 3PL?

You don’t have to worry about how much a 3PL costs; in fact - it could save you money! Bulk ordering from the same vendor can save your bottom line with discounted rates. And who knows, if you’re persuasive enough, you might even command better terms for yourself. You won’t need to invest in warehousing and haulage tech, labor costs, and the like - 3PLs can do everything for you. That means no more spending money on expensive mistakes and worrying about how to handle logistics without help.

Powering the Best 3PLs in the Business

Taking your eCommerce business to the next level is no small feat and choosing your 3PL partner can be a make-or-break factor. Your 3PL can help you manage operations, streamline customer service, reduce costs, and drive growth, but how do you know they're right for you? Well, that's where due diligence comes in. Weigh out all the options mentioned in this blog, and don't settle until you find one with enough experience and savvy to fuel your eCommerce rocket ship. When it comes to WMS, ShipHero has the goods.

So, if ShipHero WMS powers your 3PL, rest assured that your business will be on its way to success in no time!So, there you have it! If you want to learn more about all things 3PL, check out our guide here, which dives deeper into this fascinating world! These are just a few reasons why choosing the right 3PL is essential to your business success.

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‍About ShipHero: We make it simple for you to deliver your eCommerce. Our software helps you run your warehouse, and our outsourced shipping solutions eliminate the hassle of getting your products to your customers. With thousands of brands and 3PLs relying on us daily, we’re here to help with all your logistics needs.Stay informed about everything in third-party logistics by following ShipHero on LinkedIn and subscribing to our newest blogs and updates.

Click HERE to Schedule a Meeting.

Ready or not, the future of 3PLs is here! Companies are constantly seeking strategies to optimize workflow and ensure their goods get to customers quickly and efficiently. To stay competitive in this ever-evolving landscape and remain successful, 3PL providers must embrace new technologies, stay organized, and boost efficiency. In this blog post, we'll explore the future of 3PLs and discuss strategies for getting organized and becoming more efficient.

Why 3PL Efficiency and Organization is Important

3PL organization can be tricky, but it’s essential for operating at peak efficiency. Not only is there the challenge of keeping up with daily tasks and staying organized in the present, but 3PL centers must also look to the future and plan accordingly.

Establishing an efficient 3PL organization structure will enable your operation to remain competitive for years. Implementing organizational solutions like strategic product grouping, ergonomic layouts, and optimized replenishment cycles are all examples of what 3PL companies should use when creating a successful warehouse system now and in the future.

Creating a More Organized Warehouse

If 3PL organizations want to optimize their existing warehouse space, creating a more organized facility is the key. It starts with ensuring inventory is accurate for better visibility and then investing in 3PL warehouse management software for improved automation and 3PL billing software for efficient payments.

Then, you can reach new heights through vertical space utilization with stackable pallets that take up less space. Visual aids are like mini cheat sheets that make picking easier, so take advantage of that. Finally, don’t forget the power of cleanliness—keep your 3PL facility neat and tidy for a painless experience at every step.

Ways To Boost 3PL Efficiency

Maximizing warehouse efficiency is vital, but it requires the proper organization to make the necessary improvements within your warehouse management software and overall procedures. If done correctly, these steps could help your 3PL organization save time and money and allow a competitive edge in the market.

With so much opportunity in modernizing warehouses, 3PL organizations should carefully consider automation to improve efficiency and reduce worker efforts for maximum output success. Moreover, 3PL organizations should always consider the return on investment (ROI) when evaluating costs associated with investing in technology and integrating lean best practices into their operations.

In short, improving efficiency may seem expensive at first glance; however, by prioritizing significant investments over minor ones, 3PLs can genuinely reap the benefits of their improved warehouse productivity.

Benefits of Warehouse Efficiency

Warehouse efficiency can be the key to success for 3PLs, leading to the following:

• Increased customer retention
• Improved operations
• Reduced staffing needs
• Better flexibility
• Greater resiliency

A 3PL organization's success may be rooted in the soil of warehouse efficiency. With a well-oiled operation, they can provide remarkable logistical services while enjoying all of the abovementioned benefits.

How a WMS Can Help Make 3PLs More Efficient

3PLs have enough going on without constantly worrying over disorganized 3PL services - that's where warehouse management software (WMS) comes in. Put your 3PL organization to the test with a seamless, integrated platform that clients can customize to each customer's needs; no getting lost in the sauce trying to make sense of chaotic processes when you implement WMS.

Cross-docking and advanced tracking capabilities mean 3PLs don't have to worry about time-consuming, tedious tasks. They can keep all their 3PL services running smoothly, saving them from missteps or costly delays.

Increase Efficiency in Your Warehouse Today

3PLs must be ready - because technology isn't standing still. In an increasingly fast-paced and competitive world, 3PL providers must stay ahead by embracing new technologies and getting organized with efficiency-boosting strategies.

Luckily, there are several ways to boost efficiency in your warehouse. You can increase organization and efficiency with a warehouse management system and proper use of warehouse space. After all, since 3PL operations are responsible for such an essential role in many businesses' success, you must keep up with the times and stay ready for whatever comes next.

If you're looking for ways to make your operation run smoother, try ShipHero's Warehouse Management Software today! And remember - an efficient 3PL is a happy 3PL.

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‍About ShipHero: We make it simple for you to deliver your eCommerce. Our software helps you run your warehouse, and our outsourced shipping solutions eliminate the hassle of getting your products to your customers. With thousands of brands and 3PLs relying on us daily, we’re here to help with all your logistics needs.

Stay informed about everything in third-party logistics by following ShipHero on LinkedIn and subscribing to our newest blogs and updates.

Are you feeling overwhelmed as your eCommerce business grows? Can't quite keep up with the demand but don't have the capital to invest in a massive supply chain infrastructure of your own? You don't need to. With a 3PL (third party logistics), you can access sophisticated systems, warehouses, and transportation networks that provide unmatched customer service and cost savings. In this blog post, we'll explore how tapping into 3PL infrastructure may be just what's needed for growing eCommerce businesses to weather even the stormiest market.

When Do Businesses Need a 3PL provider?

If you’ve never seen the impact of third-party logistics providers, you may be under the impression that it’s an expense you can do without. But trust us when we say that it pays off a lot more than doing all your fulfillment in-house! 3PL companies can help merchants – from small businesses to eCommerce empires – with their scalability needs. When faced with unforeseen order growth or a spike in customer demand, working with a third party warehouse and its services can save you time and money in the long run. After all, nothing’s worse for your brand than breaking promises to customers, especially in an era when 60% of global consumers expect same-day or two-day delivery.

How 3PLs Bring Technology to Infrastructure

3PLs have come a long way since the days of organizing physical products in dusty warehouses - they've brought technology to infrastructure! Online merchants are all too aware that keeping up with the big retailers means implementing advanced 3PL tech, such as their warehouse management system (WMS). A WMS allows 3PLs to connect data from various sources, enabling end-to-end visibility into every single order. Wherever you send it, you can track it! So what exactly does this mean? In short, online merchants can more easily compete with larger retailers by turning to technology-enabled 3PLs for services.

1. Automating the 3PL Automating the 3PL process isn't just for robots, it's for people too! By automating processes, businesses can save precious time and effort. Ordering and tracking become an effortless breeze. With real-time updates in your online store, warehouse staff is updated on orders as soon as they're placed. Furthermore, various parameters allow you to quickly search and find exactly what you need. And that's not all – fulfillment software also ensures optimal inventory management, so reordering is quick and efficient. Automation leads to reduced delivery times so customers can receive their packages faster.
2. Data Moves Freight Whether it's to shave off delivery time or reduce inventory costs, data can help get freight moving in the right direction. Fulfillment software can use past data to ensure you're sending your products to the best possible locations. No more guesswork! With built-in metrics focusing on peak times, revenue, by channel, and quantity orders by USPS zone, you'll have unbeatable insight to optimize your supply chain. Plus, data logs only get more accurate as time goes on and you gather increasing amounts of order history - it's a win-win!
3. Reduce Errors 3PL technology is here to make our lives easier, especially when reducing errors in order fulfillment. By automating the shipping process with connected technologies, 3PL infrastructures eliminate duplicated work and human error that can cost customers time, money, and an overall bad experience. What’s more, 3PL technology offers insight into the 3PLs performance with complex data like accuracy levels and delivery timelines that demonstrate how orders are being handled every step of the way.
4. Meet Customer Expectations Customers today expect lightning-fast delivery within the same day or two days, which can only be achieved if the right technology is in place. That's where a tech-enabled 3PL comes in; they can help you optimize your storage and shipping to meet customer expectations. With their system, your inventory will be distributed to warehouses closest to your customers. Each time an order is placed, algorithms select the courier providing an efficient, cost-effective solution.

How to Tap into 3PL Infrastructure

Partnering with 3PL services can help give you a leg-up in today’s competitive world, but it’s essential to be sure the 3PL infrastructure can keep up with your business growth. Before signing on, evaluate the 3PL's existing logistics operations—are they set up to store, pack, and efficiently pick orders while accommodating a rise in inventory? Additionally, ask about the cost and if any steep start-up fees come into play. While upfront costs may seem high, future savings may be unlocked when you consider what is included in the quote - from less overhead to lower labor costs down the line. Ask your 3PL vendor what reporting capabilities they offer; this allows you to track areas such as order accuracy and timeliness of deliveries, along with any potential risks or liabilities associated with broken or lost items. You'll also want to confirm that 3PL integrates well with your existing inventory, order management, and warehouse management software for a smooth transition into 3PL services.  Are you looking for warehouse software that works for 3PLs? ShipHero's warehouse management system comes with integrations plus real-time reporting, the perfect combo for staying ahead of the future of your business!

Third Party Logistics Advantages and Disadvantages

The 3PL infrastructure, which is tailor-made for the e-commerce industry, makes it easy for small to medium-sized businesses to launch their products worldwide and scale up their operations on demand. However, 3PL isn’t entirely sunshine and rainbows - there can be hiccups ranging from extra fees to lags in shipping standards. As always, it’s important to weigh the advantages and disadvantages of 3PL in your decision-making process before investing time and energy into outsourcing logistics.

Advantages

1. Better Shipping Rates

When many brands join forces and leverage the volume of their orders, they can negotiate better rates from carriers. That's why 3PL providers are so great: You may be small in number alone, but together you’ll get heard loud and clear for discounted prices that lead to greater profits per order.

2. Decreased Shipping Time

So how do you compete with Amazon Prime to get packages to customers? Building tons of warehouses across the country might be expensive, but you can hit that two-day mark without breaking the bank by using a 3PL.

3. Real-time Transparency

Real-time transparency gives brands the advantage of being in direct control: accurately stocked shelves and order status updates that come lightning fast. With paperless warehouse operations and Tier 1 WMS data at your fingertips, you can keep a refreshed eye on every detail - from macro to micro!

4. Strategic Partnership Networks

Instead of relying on a go-it-alone approach, tap into 3PLs strategic partnership networks to get your hands on solutions specifically made for you. From integrated tools and offers to highly customized experiences—you can make it happen with these trusted partners!

Disadvantages

1. Upfront Investment

It's clear that when it comes to 3PL providers, there's no free ride - you'll have to pay the piper for setup costs such as software integration, SKU uploads, and account access.

2. Hours or Workflow

Instead of packing your orders, wouldn't it be nice to have a third party do the job for you? But beware - working with 3PLs means relying on their hours and workflow. It's best to plan ahead when engaging such services, as any disruption could lead to hiccups in delivering your goods.

3. Finding a 3PL You Can Trust

Choosing the right 3PL partner isn't just about getting a good deal – although that doesn’t hurt. You'll have to put in some homework and carefully vet reviews, size, reach, and service offerings before you can confidently shake hands with your ideal 3PL provider!

ShipHero is a Shopify Third Party Logistics Partner!

ShipHero, with 3PL infrastructure and software that seamlessly integrate with Shopify and Returnly (to name a few), is undoubtedly a 3PL partner you’ll want to know about. With ShipHero’s one-stop shop for 3PL services, you can rest easy knowing that your inventory will always be on track. And saving money? That’s a no-brainer! Thanks to real-time ship rate shopping and built-in reporting features that cover COGS, picker/packer efficiency, replenishment, and more… we might be the best 3PL for Shopify you have ever tried!

3PLs: The Backbone of Supply Chain Management

3PLs are often the unsung heroes of a shipper's operations, providing an invaluable infrastructure to help them track inventory, orders, and logistics with greater precision and certainty. Their solutions offer robust analytics, machine learning capabilities, and automated toolings for pricing, booking, and documentation, allowing shippers to make better decisions backed by fact-based data quickly. Despite the apparent advantages 3PLs present to businesses of all sizes, many fail to take advantage of 3PL tech solutions. As 3PLs have become essential in managing supply chains, it is time for shippers to reevaluate 3PL advantages and disadvantages and prioritize using their 3PL business relationships more effectively to stay one step ahead of their competition. 3PLs are the future of eCommerce. By tapping into their infrastructure, you can level up your customer service while saving money on warehousing and transportation.

Advanced Warehouse Automation Technologies You Should Know About

Following the rise of the Industry 4.0 technology boom during the COVID-19 crisis, the logistics and shipping industry continues to depend on warehouse automation. Novel solutions like warehouse management software make modern processes more efficient than ever, leaving the days of human error and slow delivery behind.

If you haven’t incorporated warehouse automation solutions into your operations, this introduction to new technologies will highlight why you need them.

What Is Warehouse Automation?

Warehouse automation is the process of computerizing inventory management and increasing efficiency for repetitive tasks, such as physical work or data entry. This software eliminates the need for human intervention through artificial intelligence.

What Is Digital Automation?

Digital automation uses software to process real-time data and manage inventory tracking. Some of these processes might include:

• Radiofrequency identification (RFID)
• Mobile barcode scanning
• Live supply chain updates
• Resource planning

These digital processes provide multiple benefits, such as:

• Increased inventory accuracy
• Faster shipping times
• Reduced operational costs
• Enhanced security
• Improved customer service

With that in mind, digital automation technology is costly. Upfront costs include the software, necessary hardware, employee training programs and maintenance costs.

In addition, going digital can potentially increase cybersecurity risks. However, data encryption can typically mitigate these dangers.

What Is Physical Automation in the Warehouse?

Physical automation in the warehouse involves using robots and machines to increase workflow efficiency and perform manual tasks. These responsibilities might include robotic picking, automatic sorting and advanced retrieval systems.

Using mobile robots can provide many benefits, such as:

• Enhanced reliability
• Scalable systems
• Improved and more accurate performance

However, like digital automation, physical automation is expensive, given that few people have experience handling robots. In addition, robotic solutions demand intense planning that most low-volume warehouses cannot afford.

How Does Warehouse Automation Work?

Warehouse automation works by using software and autonomous robots to automate repetitive or administrative tasks. Basic automation can be achieved through warehouse management systems (WMS) that streamline daily warehouse operations such as:

• Inventory tracking
• Order shipment and fulfillment
• Coordination with shipping partners
• Data analysis

Depending on inventory volume, some warehouses may use robotic retrieval systems to move cargo from point A to point B. However, most warehouse automation systems for smaller businesses simplify repetitive tasks by automating them.

There are four primary types of warehouse automation, including the following:

• Basic warehouse automation: Simple technology that automates repetitive tasks (e.g., a conveyor belt that moves inventory from one point to another)
• Warehouse system automation: Machine-learning-based technology that automates specific tasks (e.g., a system that picks the appropriate inventory items to fulfill upcoming orders)
• Mechanized warehouse automation: Robotic automation that assists in specific procedures (e.g., autonomous robots that deliver items to human pickers)
• Advanced warehouse automation: Mechanized warehouse robotics that replaces labor-intensive tasks (e.g., robotic forklift systems)

Why Should You Automate Your Warehouse?

You should automate your warehouse to reduce human error in manual processes, prevent inventory loss, meet customer expectations and many other reasons. Below are the benefits of warehouse automation:

• Increased task speed: Software solutions with inventory control can tell you where each item is located and what you need to fulfill a particular order. Employees receive notifications and updates on their mobile devices, increasing productivity and efficiency.
• Improved safety: Advanced automation moves products around on its own, so it limits the need for manual equipment across the facility and reduces the chances of an accident.
• Maximized space: Automated storage and retrieval systems with material-carrying vehicles decrease required warehouse space, enabling warehouses to stock more inventory.
• Reduced errors: Modern warehouses with inventory control can notify warehouse owners of low stock with incredible accuracy, limiting shipping errors and keeping fulfillment on track.
• Reduced labor costs: Because automated warehouses demand less manual labor, warehouse owners can spend less on recruitment, training, and full-time employment.

Types of Advanced Warehouse Automation Technology

Different systems could benefit you depending on your specific warehouse processes. Consider the following product solutions.

Goods-to-Person (GTP)

GTP systems utilize vertical lift systems, conveyor belts and carousels to increase warehouse picking speed and overall efficiency.

Automatic Guided Vehicles (AGV)

This mechanized automation system uses magnetic strips and sensors to navigate throughout your warehouse and facilitate item picking. They are ideal for smaller warehouses with minimal human traffic.

Autonomous Mobile Robots (AMR)

AMRs are similar to AGVs with the addition of a GPS. Users can create AMR routes using laser guidance systems to avoid blockages and obstacles. Compared to AGVs, AMRs can navigate more complex layouts.

Automated Storage And Retrieval Systems (AS/RS)

This fulfillment technology employs material-carrying vehicles, loaders and shuttles that store and retrieve orders. AS/RS systems are best for high-volume storage locations with limited space.

Voice Picking and Tasking

Pick-by-voice systems enable users to curate optimized pick paths for picking or putting away an item. With this system, workers don’t need scanners to find inventory.

How to Automate Your Warehouse

Automating your warehouse processes requires ample planning with stakeholders and managers. You can quickly get started with these simple steps:

1. Develop a support committee: Appoint automation experts who can audit your existing warehouse operations and determine where implementing WMS can be most useful. Consider tapping third-party experts and software engineers with experience in supply chain automation.
2. Collect the appropriate data: Evaluate your current data collection processes. Ask questions like: how quickly can you retrieve information regarding your inventory? Is this information accurate? The answers to these questions will determine how best to implement new strategies.
3. Review your inventory control systems: Consider your standard operating procedures (SOP) for managing inventory. Define each process, including shipping, fulfillment and customer satisfaction. Do these existing processes satisfy your key performance indicators? If necessary, consider what changes you need to make to improve these SOPs.
4. Choose the appropriate WMS: What WMS you choose ultimately depends on your overarching business goals. Do you want to reduce human error? Is your fulfillment process slow? Where you need the most improvement will tell you what automation system will work best.
5. Implement your new system: Most WMS platforms are intuitive, but others require intensive work and training. You’ll need to learn how to use the new equipment, especially if your new system requires physical machines.

Benefits of Advanced Warehouse Automation

A robust warehouse management system can help modern warehouses by offering the following benefits:

• Streamlined resource distribution and utilization
• Reduced storage and operational costs
• Increased productivity and overall efficiency
• Improved employee and customer satisfaction
• Fewer workplace accidents
• Optimized warehouse space
• Limited manual labor
• Few to no shipping errors

Latest Trends in Warehouse Automation Technologies

Warehousing industry trends change over time, and it’s important to keep up to stay competitive. Below are a few popular warehousing trends to keep an eye on:

Big Data and Predictive Analytics

AI-powered and machine-learning tools are an excellent way to improve forecast accuracy. Through predictive analysis, managers can upgrade warehouse equipment on time, identify performance issues and prevent delays. Advanced systems with these capabilities can also shut equipment down before it fails, saving thousands in repair costs.

IoT Data Collection

You can liken IoT data collection to optimizing a smart home in warehouse settings, where sensors collect data to improve warehouse environments.

For instance, smart lighting systems can turn warehouse lights on and off depending on the time of day and who is present on site. Alternatively, smart HVAC systems can adjust warehouse temperatures according to new inventory or present employees.

Autonomous Warehouse Robotics

Autonomous warehouse robotics provide impressive cost savings because they require minimal human interaction. Warehouse robots can pick orders, conduct inventory checks and move items depending on your needs – all on their own.

Blockchain for Warehouse Automation and Traceability

Blockchains act like digital ledgers in warehouse settings, making real-time updates accessible and shareable amongst managers and stakeholders. They can notify order recipients when to expect deliveries and managers when to refresh stocks.

The blockchain’s traceability is especially advantageous to food and beverage businesses with time-sensitive stocks.

Remote Warehouse Management

Work-from-home positions became increasingly popular following the pandemic, so it’s no surprise that remote warehouse management within distribution centers is now more common than ever. Remote management simplifies diagnostics – owners can identify functionality problems off-site and plan repairs the following morning.

Key Takeaways

As technology advances, the opportunities warehouse automation presents are virtually endless. Consider these takeaways if you want to strengthen your supply chain through warehouse automation.

• Warehouse automation can be digital or physical. Digital automation involves anything from data collection to real-time inventory updates, while physical automation dispatches robots and machines that can move items.
• There are many reasons to use automation tools. They can increase efficiency and productivity, guarantee safety in the workplace, lower warehouse costs, reduce human error and maximize space.
• Creating an automation strategy involves developing an implementation team, reviewing your existing processes and choosing the appropriate solution.
• Keeping up with warehouse automation trends can keep operations efficient and competitive. Consider trends like the blockchain, predictive analysis, remote management, IoT data collection and other cutting-edge technologies.

If you’re looking for logistic partners you can depend on, your search ends with ShipHero. Our eCommerce shipping services save you time and money while ensuring your customers get the best experience possible.

Advanced Warehouse Automation Technology FAQs

What are the latest technologies used in warehouses?

The latest technologies used in warehouses include AI-powered predictive analysis, warehouse robotics, smart setups, improved traceability through the blockchain and remote management.

What technology is used in the WMS?

WMS typically employs technology like data collection software or autonomous robots. What technology you should use depends on your warehouse’s specific requirements.

What are the types of automation technology?

The current technologies warehouse owners use for automation include:

• Automatic guided vehicles and robots for navigating warehouse aisles
• Voice picking for hands-off inventory tracking
• AS/RS systems to transport goods within the warehouse

What is 3PL Warehouse Automation?

Warehouse automation refers to the use of technology and automation to improve the efficiency and productivity of warehouse operations. This can include the use of mobile robots and other automated equipment and softwares to handle tasks such as picking, packing, moving and tracking inventory, and shipment tracking. Warehouse automation can help reduce the need for manual labor and improve accuracy and speed in the fulfillment of orders. While automation in warehouses is still a fairly new concept, there are already a wide range of solutions available and several warehouses have begun adopting as much automation as possible. Especially within the recent COVID years where supply chain and logistics companies were expected to double (and sometimes more) their workloads.

What are 3PL Warehouse Automation Solutions?

Warehouse automation solutions are technologies and systems that are used to automate various tasks and processes in a warehouse. These solutions can include things like automated storage and retrieval systems, robotic pickers and packers, and advanced warehouse management software. The goal of these solutions is to increase efficiency, reduce errors, and improve the overall operation of a warehouse. Some common benefits of warehouse automation solutions include reduced labor costs, faster fulfillment times, and improved accuracy and tracking of inventory.

Warehouse Management Systems

Warehouse management systems are a type of software used to manage and optimize the operations of a warehouse. This can include tasks such as tracking inventory levels, managing orders and shipments, and coordinating the movement of goods within the warehouse. Warehouse management systems often include features such as real-time inventory tracking, order management, and data analysis tools which can help businesses improve their warehouse operations. Some warehouse management systems also include integration with other business systems, such as accounting, inventory management, and CFM software, to provide a comprehensive view of a company's operations.

How Does it Work?

The specific functionality of a warehouse automation software system can vary depending on the specific needs of the warehouse and the type of software being used. However, most systems will use a combination of sensors, barcode scanners, and other technologies to track the movement of goods within the warehouse. This data is then used by the software to generate reports and provide real-time updates on inventory levels, order status, and other important information.

Advantages of Warehouse Automation

Several advantages are available when it comes to warehouse automation. However the two that stand out above the rest are the ability to complete more on-time delivered with better data, and improved order processing speeds. Let’s take a closer look at each.

Better Data Equals More On-Time Deliveries

Better warehouse data can lead to more on-time deliveries because it allows warehouses to more accurately track and manage their operations. For example, if a warehouse has accurate data on its inventory levels, it can quickly identify when it needs to restock and avoid running out of popular items. This can help warehouses fulfill orders more quickly and prevent delays in the delivery process. Additionally, accurate data can help warehouses track the status of orders and shipments, allowing them to identify potential bottlenecks and take steps to resolve them. This can help warehouses improve their planning and coordination, leading to more on-time deliveries.

3PL Speed Improves with Automation

Third-party logistics (3PL) providers often use automation to improve the speed of their operations. This is because automation can help warehouses operate more efficiently by reducing the need for manual labor and increasing the speed at which tasks are completed. For example, automated storage and retrieval systems can quickly and accurately retrieve items from a warehouse, and robotic pickers and packers can quickly and accurately pick and pack items for shipment. This can help 3PL providers fulfill orders more quickly and improve overall productivity, leading to faster delivery times for their clients. Additionally, automation can help third-party logistics providers reduce labor costs, which can also help improve their bottom line and make their services more competitive.

How Warehouse Automation Saves Space and Improves Your Supply Chain

Automated warehouses store more goods in less space by using technologies such as automated storage and retrieval systems. These systems use advanced algorithms and robotics to efficiently store and retrieve items, allowing warehouses to use their space more efficiently.

Automation also helps reduce the need for manual labor and increases the speed at which tasks are completed which can lead to faster delivery times for clients and build client loyalty. Because manual labor is reduced, accuracy improves because of a reduction for the potential in human error. This can be especially important for businesses that operate in industries with strict quality and safety requirements, such as the pharmaceutical or food and beverage industries.

What Automation Solutions Should You Consider for Your 3PL?

If you are a third-party logistics provider looking to improve your operations through automation, there are several solutions you should consider. These solutions can include:

Automated Storage and Retrieval Systems

These systems use advanced algorithms and robotics to efficiently store and retrieve items in a warehouse, allowing you to use your space more efficiently and improve the speed and accuracy of your operations.

Robotic Pickers and Packers

These systems use robotics to quickly and accurately pick and pack items for shipment, reducing the need for manual labor and improving the speed of your operations. They are often utilized with a human at a picking station, and a robot moves to them, telling them the items needed for an order, the human then puts the items in the robots basket and scans the items in to confirm so workers no longer need to walk to different pick stations to build an order.

Warehouse Management Software

Also known as a WMS, this type of software can help you track and manage your inventory, orders, and shipments, by providing real-time updates on the status of your operations and helping you make more informed decisions.

Integration With Other Business Systems

Consider integrating your warehouse automation solutions with other business systems, such as accounting and inventory management software, to provide a comprehensive view of your operations and improve overall efficiency. If you don’t know how to do this yourself, there are partners like ShipHero who can help you get started.

The right automation for your logistics will depend on your specific needs and goals. It may be helpful to consult with an expert to determine the best solutions for your business.

Finding the Right Solution

To find the right warehouse automation solution for your business, there are a few steps you should take:

#1 Identify Your Specific Needs And Goals

Before you start looking for a warehouse automation solution, it is important to have a clear understanding of what you want to achieve and what specific challenges you are looking to solve. For example, are you looking to improve the speed and accuracy of your operations, reduce labor costs, or better manage your inventory? Identifying your needs and goals will help you narrow down your options and find a solution that is right for you.

#2 Research Available Solutions

Once you have a clear understanding of your needs and goals, you can start researching the different warehouse automation solutions that are available. This may include reading reviews, attending industry events, and consulting with experts in warehouse automation. It is also a good idea to visit other warehouses that are using automation to see how the solutions are working in practice.

#3 Evaluate Potential Solutions

Once you have identified a few potential solutions, it is important to carefully evaluate each one to determine which is the best fit for your business. This may include conducting pilot tests or demonstrations, comparing the features and capabilities of different solutions, and considering the potential cost and benefits of each solution.

#4 Choose the Right Solution For You and Implement

After evaluating your options, it is time to choose a warehouse automation solution and implement it in your warehouse. This may involve training your staff, integrating the solution with other business systems, and making any necessary changes to your warehouse operations. It is important to carefully plan and manage the implementation process to ensure a smooth transition and maximize the benefits of the solution. The provider you choose for your solution should have processes to help you implement the new warehouse automation software.

By carefully considering your needs and goals, researching your options, and implementing the right solution, you can improve the efficiency and effectiveness of your warehouse operations.

Key Takeaways

Warehouse automation can help you reach new speeds and accuracies within your warehouse operations. Whether you are looking for a warehouse provider to handle the entire order process for you, or have a warehouse which you need automation solutions for, Shiphero can help.

ShipHero offers both fully outsourced warehousing and a warehouse automation platform which helps businesses automate and optimize their warehouse. The platform includes a range of tools and features including tools for tracking, managing inventory levels in real-time, customizing order processing rules, shipment tracking, and integrating with other business systems and e-commerce platforms (such as Shopify, Amazon, and Magento). Which means by using ShipHero, you can save time, reduce labor costs, and better manage your inventory to improve your bottom line.

3PL Warehouse Automation FAQs

What Does 3PL Mean in Warehousing?

3PL stands for third-party logistics. In the context of warehousing, 3PL refers to a company that provides outsourced logistics services, such as warehousing and fulfillment, to other businesses. Generally, they offer a range of services, including storage, order fulfillment, and transportation, to help businesses manage and optimize their supply chain operations and often use automation to provide value to their clients.

What Are the Four Types of 3PL?

The four types of 3PL providers include a standard 3PL provider, a 3PL service provider, a 3PL customer adapter, and a 3PL customer developer. Below is a definition of each:

• Standard 3PL Provider: A standard 3PL provider is a company that offers a range of logistics services, including warehousing, transportation, and distribution solutions. These services are typically provided on a contract basis, with the 3PL provider managing the logistics operations for the business.
• 3PL Service Developer: This is a 3PL provider who offers IT infrastructure. In addition to other 3PL related services they can help you get shipment tracking and verify compliance management.
• 3PL Customer Adapter: Meaning your logistic provider handles all activities for their client, this includes everything through the shipping process and includes negotiated rates with carriers. And clients get visibility by using the 3PL’s software.
• 3PL Customer Developer: This provider usually only has a few clients, but they are very large companies. They completely manage the company logistics and are considered the clients very own logistics department as if they were a part of the company themselves. This type of provider often comes at a higher cost than other 3PL providers.

What Automation is Used in Warehouses?

Automation is widely used in warehouses to improve efficiency and productivity. Some examples of automation in warehouses include the use of automated guided vehicles (AGVs) to move goods around the warehouse, automated sorting systems to sort packages and items, and automated storage and retrieval systems (ASRS) to store and retrieve items from their designated locations. Automation can also be used in other aspects of warehouse operations, such as inventory management and order fulfillment.

What is IoT?

The Internet of Things (IoT) refers to the interconnectedness of everyday objects, such as appliances, vehicles, and other items, that are equipped with internet connectivity and sensors. This allows them to collect and exchange data, enabling them to be controlled and monitored remotely. The goal of the IoT is to make our lives easier and more efficient by allowing us to access information and control a wide range of devices from anywhere, at any time.

The Role of IoT in Warehouse Management

IoT technology can be used in warehouse management to improve efficiency and productivity. For example, IoT sensors can be used to track the location and condition of inventory in real time, allowing warehouse managers to quickly and accurately assess the availability of items. This can help to reduce the time and labor required for inventory management tasks, such as stock-taking and reordering. Additionally, IoT sensors can be used to monitor the condition of the warehouse environment, including temperature and humidity levels, to ensure that inventory is stored in optimal conditions. This can help to prevent damage and spoilage of goods, improving overall warehouse efficiency.

How Does IoT Warehousing Work?

In the context of warehousing, IoT technology can be used to improve various aspects of the operation, such as inventory management, asset tracking, and temperature control.

For example, sensors can be placed on warehouse shelves to track the inventory levels of individual items. This information can then be sent to a central system, allowing managers to have real-time visibility into the status of their inventory. Additionally, RFID tags can be attached to assets, such as pallets or containers, to automatically track their location within the warehouse. This can help improve the efficiency of operations, as workers can quickly and easily locate the items they need.

Components of IoT Warehouse Automation

IoT Devices

These types of devices usually utilize smart sensors and gather data so it can be processed by any IoT-based systems. These devices can help monitor the warehouse and can track placement of assets and items left in a warehouse.

Gateway

This connects the IoT devices to your warehouse management system. These connections can happen through the WiFi network, a bluetooth connection, an ethernet connection, or even a cellular network.

Server

The server should be a dedicated computer which receives the raw IoT data. This data will be processed into insights or saved for future use. And it largely helps in automation of warehouse processes because a server sends commands to smart devices with developed algorithms. You can use two types of servers for your IoT warehouse automation, the first is a cloud-based server which means the shared server is maintained by a third-party company. And the second is an on-premises server which is a server physically installed in your warehouse that creates a local IoT device network.

Application

This is what is installed on your desktop so the user can interact with the data collected from IoT devices and also allows the user to send commands to IoT devices from their computer to help and maintain the warehouse management inventory tracking system.

Edge Computing

If you are a larger warehouse with a high amount of IoT systems, you are likely to use edge computing. This layer sits between the gateway and data storage and allows extra edge nodes to review data from the smart IoT devices and send direct commands without the information needing to be reviewed by the central server or an application user.

Benefits of IoT Warehouse Automation

The use of IoT (Internet of Things) technology in warehouse automation can bring numerous benefits to businesses. Some of these benefits include the following:

Real-Time Tracking

One of the main advantages of using IoT in warehouse automation is the ability to track and monitor inventory in real-time. This can help businesses reduce the amount of time and effort spent on manual inventory checks and improve the accuracy of their inventory records. In addition, IoT technology can be used to automate many warehouse tasks, such as picking and sorting items, which can help increase productivity and reduce the need for manual labor.

Reduced Operating Costs

When using an automated warehouse you often require less space and staff. Plus because of the IoT programing you will likely experience a reduction of costs because these processes prioritize and reduce congestion, improve sustainability efforts, and optimize processes.

Increased Performance

Because IoT optimizes your warehouse, you’ll find your ability to pick and pack orders as well as onload and sort inventory has increased both in speed and efficiency. The IoT sensors offer data on how to optimize working areas and allow you to reduce the use of manual labor and occurring errors.

Improved Inventory Management

With IoT devices you’ll have continual visibility into your inventory because the RFID tags within these devices will provide the information needed. You can track the status of materials (raw, work-in-progress, finished goods) as well as the type of materials. Plus you’ll always have an accurate inventory count.

Automated Maintenance

IoT devices use predictive maintenance which means you can schedule maintenance and inspection routines systematically so your business and your clients can avoid experiencing the frustrations of unplanned downtime.

Enhanced Forecasts Accuracy

Because of the consistency in understanding inventory counts and order volumes, with IoT devices your forecast accuracy will skyrocket. Which means you will have a stronger understanding of what to purchase more of and what is just sitting on your shelf.

Reduced Risks

IoT technology can help improve the safety of warehouse workers by enabling the use of automated equipment and robotics. This can help reduce the risk of accidents and injuries on the job, improving overall workplace safety.

Detailed Analytics

Another benefit of IoT-powered warehouse automation is the ability to collect and analyze data on warehouse operations. This data can be used to identify areas for improvement and optimize warehouse processes, leading to increased efficiency and cost savings. For example, data analysis can help businesses determine the most efficient routes for picking and packing orders, reducing the amount of time and effort spent on these tasks.

Devices for IoT Warehouse Management

RFID Tags

RFID stands for radio-frequency identification. An RFID tag is a small device which uses radio waves to transmit information wirelessly. It typically consists of a small chip and an antenna, and are commonly used in a variety of applications, including inventory tracking, access control, and contactless payments. In the context of warehousing, RFID tags can be attached to pallets, containers, and other assets to automatically track their location within the warehouse. This can help improve the efficiency of operations, as workers can quickly and easily locate the items they need.

Smart Sensors

Warehouse smart sensors are sensors used to monitor and track various aspects of a warehouse, such as inventory levels, temperature and humidity, and the movement of goods. These sensors are typically connected to the internet, allowing them to transmit data to a central system where it can be accessed and analyzed. They can also be used to track the inventory levels of individual items, providing real-time visibility into the status of the warehouse's inventory. This can help managers ensure they have the right products on hand to meet client demand, and can help prevent stock-outs and overstocking.

Beacons

An IoT beacon is a device which uses Bluetooth technology to transmit a signal to nearby devices, such as smartphones or other sensors. Beacons are often used in location-based applications, such as retail stores or museums, to provide information or services to nearby clients or visitors. In warehousing, IoT beacons can be used to track the location of assets and inventory within the warehouse. A beacon attached to a pallet of goods can transmit its location to a central system, allowing managers to track the movement of goods within the warehouse in real-time.

AI Cameras

AI cameras are cameras which are equipped with artificial intelligence (AI) technology, allowing them to analyze and interpret the visual data they capture. This can enable them to perform tasks such as object recognition, facial recognition, and motion detection. Using AI cameras in a warehouse allows employees to track the movement of goods within the warehouse, providing real-time visibility into the location of inventory and assets. AI cameras can also be used for security purposes, such as monitoring access points and identifying unauthorized individuals.

GPS Trackers

Warehouse GPS trackers are devices that use the Global Positioning System (GPS) to track the location of assets and inventory within a warehouse. These devices typically consist of a GPS receiver and a transmitter, which are attached to the assets being tracked. Warehouse GPS trackers can help workers quickly and easily locate the items they need, reducing the time and effort required to find and retrieve items. Additionally, GPS tracking can help prevent loss or theft of assets, as managers can monitor the movement of goods within the warehouse and identify any unauthorized activities.

Smart HVAC Systems

Smart HVAC systems, or smart heating, ventilation, and air conditioning systems, are HVAC systems equipped with sensors and connected to the internet, allowing them to be controlled and monitored remotely. The use of smart technology in HVAC systems allows for greater control and efficiency. For example, sensors can be used to monitor the temperature and humidity of a space, and the system can be automatically adjusted to maintain optimal conditions.

Latest IoT Warehousing Trends

Automated Guided Vehicles

Warehouse automated guided vehicles (AGVs) are robotic vehicles used in warehouses to move goods and materials from one location to another. These vehicles are equipped with sensors and other technology that allows them to navigate autonomously within the warehouse, following predetermined paths or instructions. AGVs can be used for a variety of tasks in a warehouse, such as moving goods from one location to another, loading and unloading trucks, or transporting materials to and from production areas. They can operate 24 hours a day, seven days a week, providing a reliable and efficient means of handling goods within the warehouse.

Blockchain Item Tracking

Blockchain item tracking refers to the use of blockchain technology to track and manage the movement of goods and assets within a supply chain. Blockchain is a distributed database technology that allows multiple parties to securely record and verify transactions without the need for a central authority. While item tracking a blockchain can be used to create a shared and immutable record of the movement of goods and assets within a supply chain. Each transaction, such as the transfer of ownership or the movement of goods from one location to another, can be recorded on the blockchain, providing a transparent and verifiable record of the item's history.

AR Glasses

AR glasses, or augmented reality glasses, are wearable devices which can superimpose digital information onto the real world. In a warehouse setting, AR glasses can be used to provide workers with real-time information and guidance, helping them to perform their tasks more efficiently. By simply looking at a particular shelf or location, workers can see the items stored there, along with any relevant information, such as quantity or expiration date. This can help workers quickly and easily locate the items they need, reducing the time and effort required to find and retrieve items.

Drones

Drones, or unmanned aerial vehicles (UAVs), can be used in warehousing for a variety of tasks, such as inventory management, asset tracking, and security. For example, drones equipped with sensors and cameras can be used to scan warehouse shelves and automatically count and track the inventory levels of individual items. This can provide real-time visibility into the status of the warehouse's inventory, allowing managers to quickly and easily identify any shortages or overstocks.

Key Takeaways

Overall, using IoT to automate your warehouse is a good way to boost your efficiency and bring your warehousing operations into the future. If you’d like to talk to an expert on how to automate your warehouse, check out ShipHero!

IoT in Warehouse Automation FAQs

What is Warehousing Automation?

Warehouse automation encompasses anything which automates and improves the efficiency of warehouse tasks. This can include software, hardware, people, and robotics which can be integrated in every part of warehouse operations including unloading and sorting inventory, picking and packing items, capturing warehouse data, automated retrieval of items, and automated shipping processes.

What is IoT Automation?

IoT automation refers to the use of IoT (Internet of Things) technology to automate various processes and tasks. IoT automation involves the connection of physical devices, such as sensors and actuators, to the internet, allowing them to send and receive data. In a warehouse setting, IoT automation can be used to improve various aspects of operations, such as inventory management, asset tracking, and temperature control.

How IoT Improves Warehouse Operations?

While IoT is a new trend in the logistics industry, it is one way in which many warehouses have found the answer to every warehouse’s question: How do I ship faster and more accurately? With IoT, many warehouse processes can be automated in order to reduce operation costs, boost performance, reduce human error, and lower risks.

From conveyor belts to aerial drones, warehouse automation has been around for decades. But as the COVID-19 pandemic triggered a massive eCommerce boom and reshaped supply chains, warehouse robotics is proving to be not only beneficial to logistics and supply chain management but also essential for any business that wants to thrive in the years to come.

Whether you're a business owner or third-party logistics provider, familiarizing yourself with warehouse robotics technology can help you gain a competitive edge and future-proof your business.

What is Warehouse Robotics?

Warehouse robotics is the use of automated systems and machines (or robots) to assist in essential warehouse tasks. That said, it refers not only to the machines but also to the software used to control each one.

Warehouse robotics is part of a larger system called warehouse automation.

A Brief History of Robots in the Warehouse

Warehouse robotics has evolved over the years from simple AGVs that carry heavy materials across warehouse floors to collaborative bots or "cobots", mobile robots that can be programmed to follow workers around and perform a range of tasks.

The origin of automation technology in the warehouse can be traced back to 1913 when Henry Ford first implemented the moving assembly line, a system of conveyor belts that allowed Ford to produce automobiles at record speed. This revolutionized the manufacturing industry and ushered in a new era of utilizing technology to produce and deliver goods more efficiently. In the following years, warehouses would adopt the use of forklifts and hand trucks to shuttle large quantities around.

By the 1950s, the first AGVs were introduced. These driverless vehicles could move heavy loads along a predetermined route guided by magnetic sensors.

American inventor George Charles Devol, also known as the father of robotics, invented the first robotic arm, Unimate in 1954. Its use became popular in industrial applications by the 1960s, when other innovations such as the first automated storage and retrieval system (AS/RS) took off as well. Today's AS/RSs store and retrieve items for workers, allowing humans to remain at their stations and out of danger.

The ‘80s and ‘90s saw the rise of integrating hardware and software to create a unified system. By the 2000s, warehouse automation involved the Internet of Things (IoT), interconnected "smart" devices that could interact over a wireless network.

Artificial intelligence-powered robots, aerial drones and computer vision systems are among the latest technologies that are changing our approach to automation in the warehouse.

Use Cases: What Kinds of Tasks Can Warehouse Robots Help With?

Warehouse robots can aid in a myriad of warehouse tasks, including:

Picking

Picking refers to the process of locating and retrieving products to fulfill an order. Industrial robots can be used to either pick out products themselves and transport them to the next location or assist workers with things like identification and verification.

Sorting

Sorting is a complex task that is often prone to error. Using cameras, sensors and conveyor systems, robots can speed the sorting process up and reduce errors at the same time.

Transportation

Moving massive amounts of inventory across large areas is labor-intensive, time-consuming and even potentially dangerous. Things like automated guided vehicles (AGVs), which can transport goods along set routes without any human guidance, take away the stress of mobilizing products from one part of the warehouse to another – giving workers more time to perform other tasks.

Replenishment

Warehouse automation systems can keep track of inventory levels and notify workers when stocks are low. Advanced robots like aerial drones can also scan inventory and count items, then update the warehouse management system.

Packaging

Pick-and-place robots can quickly pick products up and place them into boxes or bags along conveyor belts. Using computer vision systems, some robots can also calculate the ideal box size for different types of products.

Benefits of Warehouse Robotics

Here are some of the benefits of implementing robotic technology in warehouses and fulfillment centers:

Automate Tedious, Repetitive Tasks

By automating routine and menial tasks around the warehouse, robots can free human employees up to tackle more complex challenges that require careful judgment and higher levels of skill.

One major fear that people tend to have around robots is whether they will replace human workers. Experts say that this isn't likely to happen soon. Instead, humans will be "crew chiefs" and have more managerial roles over their robot teams. The aim is to improve the quality of experience for warehouse workers, who face burnout from doing repetitive tasks day in and day out.

Reduce Physical Strain on Warehouse Workers

They don't call manual labor back-breaking work for no reason. Repetitive warehouse work can lead to overexertion and overuse injuries like nerve injuries, muscle strain, rotator cuff injuries, neck and spine injuries, tendonitis and carpal tunnel syndrome. The work's repetitive and monotonous nature can also lead to increased stress, low morale and burnout.

With the help of robots, which can perform a bulk of the strenuous and repetitive tasks involved in running a warehouse, businesses can keep their employees healthier and happier for longer.

Strengthen Warehouse Safety

Aside from being physically and mentally taxing, warehouse work can be dangerous as well. A survey by the US Bureau of Labor Statistics ranked transportation and warehousing among the private sectors with the highest rates of nonfatal occupational illnesses and injuries.

Some of the top causes of warehouse accidents include slips, falls and trips, manual handling injuries, forklift injuries and injuries caused by falling objects. But all these can be avoided with the help of warehouse robotics. Built-in sensors and LiDAR scanners can keep AMRs from bumping into people and objects in their way, mobile robots and AS/RS can replace manual forklifts and aerial drones can keep workers from manually counting tall stacks of inventory – reducing their risk of falling from dangerous heights.

Lower the Likelihood of Errors

Human error can compromise the workplace in a variety of ways, including damaging expensive machinery, affecting the quality of products, causing accidents and injuries and impacting a business' overall profitability.

Warehouse automation and robotics can reduce the incidences of errors caused by human workers by improving accuracy and efficiency in warehouse operations. Complicated processes are relegated to robots that can multitask far better than any human worker, and physically demanding tasks are performed by machines that can handle much larger loads.

Make More Accurate Predictions

Given that robots can perform warehouse tasks day in and day out without tiring, needing breaks or getting distracted by other tasks, it's easier for warehouses to predict how much time it takes to process orders and get them to customers.

With artificial intelligence, warehouses can also make more accurate predictions when it comes to demand surges, inventory stockouts, machine maintenance, etc.

Create a More Adaptable Workforce

Aside from predicting demand surges, warehouse robotics can also help your warehouse adapt to busy seasons. Instead of hiring and training new employees, which can take several weeks and cost your business money, you can rely on your robotics to shoulder the load.

Boost Customer Satisfaction

With a faster, more efficient and less error-laden fulfillment process, it's easier to keep customers happy with your service. And with more helping hands (albeit non-human ones) on the warehouse floor and a centralized hub for all customer, order and supplier information via your warehouse management system, you can provide more seamless and accurate customer service.

Bolster Your Brand Image

When customers notice the consistency of your service, you create a brand image that is synonymous with quality, efficiency and innovation. Soon enough, you'll establish yourself as a brand that can keep up with (and potentially even outpace) the leaders in your industry.

Types of Warehouse Robotics

There are many different kinds of warehouse robots. These are some of the most popular ones in use today:

Automated Storage and Retrieval Systems (AS/RS)

AS/RS are software-controlled systems that can place and retrieve goods automatically. These systems comprise several components that work together to speed up order fulfillment.

These are just a few examples of components that fall under AS/RS:

• Unit loads or machines store large loads of over 1000 pounds. These handle goods that are stored vertically on stacked pallets reaching heights of up to 100 feet.
• Vertical lift modules use an automatic inserter/extractor that stores and retrieves items that are stacked vertically on a column of trays.
• Horizontal carousels are made up of a series of rotating bins and are used to store small parts and pieces.

Automated Guided Vehicles (AGVs)

AGVs are independently operated, self-propelled vehicles guided along defined pathways. These robots can navigate warehouse floors. Instead, they use magnetic strips, floor sensors or wire-guided navigation to get around.

Modern AGVs utilize cameras and/or laser-guided systems to move around, eliminating the need for external tracks or tapes on the floor.

Autonomous Mobile Robots (AMRs)

An autonomous mobile robot or AMR is like an AGV in the sense that it can move around a warehouse without human guidance or assistance. However, unlike AGVs, AMRs don't need tracks or routes.

Using sensors and GPS systems, autonomous robots can move independently, create their own routes, reroute when faced with obstacles and perform a variety of tasks such as:

• Transporting goods from station to station
• Accompanying workers through various stages of fulfillment
• Processing information on packages

“Cobots” or Collaborative Robots

Cobots are robots that work hand-in-hand with human workers. Cobots can be programmed to perform a variety of tasks across different workstations, typically repetitive activities like picking, placing and packing goods.

Unlike traditional robots, which are typically isolated for safety reasons, cobots can work side-by-side with human staff. They're equipped with sensors and other safety technologies that pause their movements when they run into people.

Aerial Drones

In the warehousing industry, aerial drones are mainly used for inventory management. Using cameras and sensors, drones can take on the task of inventory scanning from several feet in the air, eliminating the need for workers and pickers for manual inventory counting.

Should You Bring Robots Into Your Warehouses?

Robotics brings all kinds of benefits to a warehouse, including improved efficiency, lower error rates and a happier workforce.

And although there are sizable upfront costs to warehouse automation, they pay off eventually. Studies show that increased use of robotics can lead to a 25 to 30% reduction in average labor and manufacturing costs.

Key Takeaways

As eCommerce grows, so does the demand for faster and more accurate fulfillment. And with the way warehouse automation and robotics have advanced in the past decade, it's become clear that robots are becoming more of a necessity in the warehouse.

If you want to stay ahead of the game and keep your employees happy, then perhaps it's time to look into robotics for your warehouse.

Warehouse Robotics Technology FAQs

What types of robots are used in the Amazon warehouse?

Amazon uses a combination of different kinds of robots in their warehouses, including automated guided vehicles by Kiva Systems, a fully autonomous mobile robot called Proteus and a robotic work cell that picks, segregates and places packages into a GoCart called Cardinal.

What company makes warehouse robots?

Some of the top robotics companies that make warehouse robots include ABB, Kuka, Yaskawa, Fetch Robotics, Locus Robotics, 6 River Systems, Omron and Daifuku.

How are robotics used in warehouses?

Robotics are used in warehouses to automate tedious and repetitive tasks, improve worker safety and efficiency and boost overall productivity and profitability.

What is Warehouse Automation?

Warehouse automation solutions can help reduce the need for manual labor and improve accuracy and speed in the fulfillment of orders. While automation in warehouses is still a fairly new concept, there are already a wide range of solutions available and several warehouses have begun adopting as much automation as possible. Especially within the recent COVID years where supply chain and logistics companies were expected to double (and sometimes triple) their workloads. Warehouse automation refers to the use of technology and automation to improve the efficiency and productivity of warehouse operations. This can include the use of mobile robots and other automated equipment and softwares to handle tasks such as picking, packing, moving and tracking inventory, and shipment tracking.

How Does Warehouse Automation Work?

Most warehouse automation systems will use a combination of software, sensors, barcode scanners, robotics, and other technologies to track the movement of goods within the warehouse. This data is then used by the software to generate reports and provide real-time updates on inventory levels, order status, and other important information. The specific functionality of a warehouse automation solution can vary depending on the specific needs of the warehouse and the type of software being used.

Why Small and Mid-Size Warehouses Can and Should Automate

While automation may seem like something only large-scale warehouses can afford, automation truly is for all warehouse facility sizes. Advantages such as automated storage and retrieval (AS/RS) systems are becoming wildly popular in any sized warehouse. Plus automation protects your warehouse as well. It both reduces human error and risk, while speeding up your operations and offering a higher rate of efficiency. We have all seen within logistics a technology upheaval is taking place, and warehouse automation is only going to improve. That’s why it’s key to get in on the ground floor and begin automating as many processes as you can so your warehouse can stay ahead of the competition no matter its size.

Benefits of Small-Scale Warehouse Automation

The client experience is everything. And the more automated your warehouse is the more you can handle increased client demand. Warehouses who implement automation can do more with less and minimize human error. They get benefits like:

• Enhanced data
• Low stockout events
• Highly optimized warehouse space
• Improved inventory control
• A high level of workplace safety and employee satisfaction
• Reduced operational costs
• Higher operating speeds and accuracy rates

With all of these benefits warehouse automation simply can’t be ignored and it’s quickly becoming a solution your warehouse needs or you may fall behind.

When to Automate Your Warehouse

But how do I know when is the right time to automate my warehouse? Between peak season and trying to keep things up and running, making such a switch in your technology may seem daunting. We recommend reviewing several factors when considering automation. If you see a rise in client order delays, inaccurate inventory counts, using spreadsheets to manage your warehouse, or if you have a limited workforce yet your procedures are labor-intensive, it is time to automate. To do so, you’ll want to examine your supply chain from head to toe, identify gaps in your physical and technological processes, and recruit an expert to help you make the switch.

Types of Warehouse Automation Technology

There are several types of warehouse automation solutions which can help you become automated. We’ve listed a few below:

• • Inventory Management Software: These types of software allow you to track inventory using processes of automation such as barcode scanning, inventory optimization, stock notifications, and report generation.
  • Automated Storage and Retrieval Systems (AS/RS): This can include tote shuttles and product carrying vehicles to retrieve products.
  • Autonomous Mobile Robots (AMRs): These robots use GPS to develop routes through your warehouse at max efficiency and are safe to operate with humans around them.
  • Automatic Guided Vehicles (AGVs): These vehicles follow a fixed path within your warehouse using magnetic strips or sensors and cannot be used with spaces that have a high volume of human traffic.
  • Automated Sortation Systems: This conveyor system will both identify an item and move it to the required warehouse location using barcodes, scanners, and RFID tags.

• Goods-to-Person (GTP): Inclusive of carousels, conveyors, and lift systems, to help improve the speed of warehouse picking.

Challenges of Warehouse Automation

While warehouse automation is highly needed in any warehouse size, you should first understand significant capital is usually required to get started. Not only in purchasing the equipment but in order to get the help needed for your business to set it up correctly and get it running smoothly. And with any equipment there is always the chance of failure within these processes. And if your equipment goes down, you can get unscheduled down time which can hurt your businesses delivery and efficiency rates. The best way you can avoid these downtimes is to schedule regular maintenance on your automated systems. There are third-party companies you can contract to do this service for you. If you keep your equipment regularly maintained it is highly unlikely to break down.

Ways to Automate Small and Growing Warehouse Operations

If you take a highly strategic approach to your application of automation you can benefit from these processes quickly. In many ways these solutions pay for themselves once they are up and running. Here are four steps to help you in your automation journey:

#1 Assess the Efficiency of Existing Operations

You must understand where you are at today in order to prioritize the automation you purchase first. This means you need to review your operational goals and understand where these goals succeed and where they fall short. If your workers struggle to do their work quickly, or you have continually been surprised by empty product stock, this can give you some idea of what automation will help your warehouse the most.

#2 Search Out Solutions That Increase Worker Efficiency

Your workers need technology which is simple to use. Technology which requires a high rate of training to understand will slow down your processes not only when you implement, but when you get new workers as well. So make sure the technology you choose is easy to use and to implement with a highly user-friendly interface.

#3 Find Ways to Improve Overall Workflow

Once you have provided your employees with technology that enhances their productivity, you need to evaluate your workflows. Review what labor-intensive and tedious tasks could be handled by AMRs (or other automation) instead of your employees. Reviewing the workflows in your warehouse allows you to process what is outdated and what works so you can implement automation accordingly.

#4 Select Technology That Can Grow With Your Business

As you automate, you will grow. It is often a result of the efficiency which comes with automation. Knowing this it is a good idea to start with software automation first which will grow and expand as you do, then begin adding robot technology into your warehouse as your business grows. Finding a partner who can work as a strategic advisor to you in this warehouse automation will be key in successfully implementing these practices.

Warehouse Automation Best Practices

As you look to automate your warehouse, we have identified a few best practices to help you along the way.

Invest in Scalable Solutions

Whether it be a warehouse automation technology, or robotics these solutions need to have the capability of scaling with you. Meaning you should have no problem integrating these technologies into future warehouse locations, teaching new employees, or evolving with supply chain partnerships.

Integrate with a WMS

Any automation software you utilize should integrate directly into your WMS platform. These solutions specifically should help you manage and track inventory as well as offer dashboards and reports with key inventory insights.

Perform Continuous Cycle Counts

Once you implement automated data collection systems you can use barcode scanning and RFID tags to help you automate your continuous cycle counts. With this technology you can validate the inventory levels in your WMS and check for any discrepancies using reporting dashboards.

Automate Data Collection

This is a great place to start when it comes to automating your warehouse. Cloud-based solutions which use barcode scanners are one of the simplest, low-cost paths to automation. Starting here allows you to eliminate human error and use the barcode scanners to capture highly needed performance and inventory data which can be used for further analysis.

Optimize Receiving

When you optimize receiving you gain the ability to identify incoming product information such as dimensions, classifications, and packaging. Using this data, your warehouse automation triggers specific rules to determine where to store and how to handle these products. Automating as much as you can from the moment a product enters your warehouse makes your workflows highly streamlined down the road.

Evaluate Warehouse Design

Some don’t realize to be successful many physical automation solutions like AS/AR systems do need space to be as successful as possible. Which means you may need to rework your warehouse with the help of a solution vendor so you are optimized for automation.

Selecting the Right Automation Solutions

We already know automating your warehouse is a quick way to improve efficiency and speed, but automation has many different solutions in the mix that may be right for some warehouses and not for others. When you invest in warehouse automation you should first decide the process in which you want to automate and what solutions to add first which can help build up to other solutions.

There are several levels of automation solutions to pick from including basic automation which includes scanning systems and basic conveyor systems. System automation which involves a software based system often to automate inventory, order picking, and performance reports. Mechanized automation which includes physical robotics. And advanced automation which means you use automation solutions from all of the previous three types. With how many automation solutions are out there, and the fact that these solutions are expected to grow tenfold in the coming years, you need to find an automation expert to help you along the way so you can pick the right automation solution in the right order. Especially because “right” will look different for every warehouse.

Key Takeaways

With automation technology, warehouses are no longer considered slow growing and highly manual work. Innovative automation will continue to propel the logistics industry as demand grows higher and worker availability plummets. Now, whether your warehouse is large or small, you have the benefit of using automation to get more tasks done with less. In fact, warehouse automation stats show automating your logistical systems makes a huge difference when it comes to warehouse efficiency. Deloitte did an analysis of supply chains and found, “79% of companies with high-performing supply chains achieve revenue growth superior to the average within their industries.” Which means if you don’t have automation up and running yet, it’s definitely something you should get started right away!

Small-Scale Warehouse Automation FAQs

How Much Does It Cost to Automate a Warehouse?

Warehouse automation costs depend on the needs and size of your warehouse. You will need to first understand your own processes, and the software or robotics you’ll need to improve them, before you’ll get a scope of cost.

What Are the Types of Warehouse Automation?

When it comes to warehouse automation most different solutions can fall within two types: process automation and physical automation. While physical automation is specific to the process of moving products and often uses robots, process automation is about gathering and utilizing data so daily tasks can be automated and reporting presented with key insights.

Are There Any Fully Automated Warehouses?

Yes. Some warehouses are known as dark warehouses. The name comes from the fact that these warehouses don’t need lighting because they have no operators working inside of them. These dark warehouses are common in the automotive, food, and eCommerce industries.

Debating whether to use 3PL or 4PL can be challenging because only a few business owners know the difference. While both services may appear interchangeable, there are key differences in technologies, capabilities and typical applications.

If you want to introduce 3PL or 4PL into your supply chain management strategy, this guide will outline the major differences and how to choose the appropriate solution.

Logistics Terminology Explained

Whenever a customer purchases a product online, logistics providers become responsible for shipping them. Below are the different logistics services and what they offer.

First-Party Logistics (1PL)

First-party logistics (1PL) companies employ in-house freight carriers that transport goods and products from point A to point B. A 1PL transaction involves two parties: a manufacturer and a buyer.

For instance, a local farm (point A) might transport ingredients directly to a grocery store (point B).

Second-Party Logistics (2PL)

Second-party logistics (2PL) transport goods using owned assets, such as planes, boats or other vehicles. 2PLs are typically used in international shipping and wholesale goods.

For instance, a local farm might use an outsourced delivery service to ship ingredients to direct buyers.

Third-Party Logistics (3PL)

Third-party logistics (3PL) outsources delivery and additional services, including picking, packing and shipping. Some 3PL fulfillment services also offer warehouse management capabilities, such as real-time tracking, through connected software.

For instance, a local farm might use a 3PL solution to pack and ship goods, then deliver them to grocery stores more quickly.

Fourth-Party Logistics (4PL)

Fourth-party logistics (4PL) covers all supply chain management, including execution. 4PL providers, also known as lead logistics providers, act as consultants, giving the company feedback to improve operations.

For instance, a 4PL company might inform a local farm of changes in supply and demand, allowing them to make the necessary adjustments.

Fifth-Party Logistics (5PL)

Fifth-party logistics (5PL) or logistic aggregators employ highly advanced solutions – such as robots, automation, blockchain and Radio Frequency Identification (RFID) devices – to improve efficiencies within a company’s entire operation.For instance, the same local farm might outsource all its logistics operations, focusing solely on production.

What Is a 3PL?

A 3PL, or third-party logistics company, ships products on behalf of a client. 3PLs act as an intermediary but do not take ownership of the imported products. A company might hire a 3PL provider if its supply chain becomes too complex to manage natively.

The types of logistics services a 3PL provides can range from warehousing to packaging and freight forwarding. Asset-based 3PL services directly manage a company’s resources to perform its services.

What Is a 4PL?

A 4PL, or fourth-party logistics company, controls a business’s entire supply chain strategy and has comprehensive oversight of warehouses, freight forwarders and shipping companies. A fourth-party logistics provider can make recommendations regarding changes to production and shipping strategies.

Hiring a 4PL company might make sense if you need more resources and staff to oversee transportation and other supply chain operations.

Differences Between 3PL and 4PL

While businesses have more hands-on involvement with a 3PL provider, there is an extra degree of separation with a 4PL provider. In addition, the relationship between companies and 3PLs might be more transactional than with 4PLs.

Below are other key differences between 3PLs and 4PLs.

Order Fulfillment

While 3PLs oversee fulfillment operations like warehousing, packing and shipping, 4PLs take it further by managing all supply chain activities. This includes transportation services, supply chain software and potential stopgaps in your process.

Supply Chain Optimization

Working with a 3PL can give your business the upper hand in supply chain optimization. 3PLs demand more client involvement, so you can still make the decisions you feel is best for your business. For example, you can optimize fulfillment by picking strategically located fulfillment centers close to your customers.

In addition, 3PLs provide clients with access to shipping data, increasing demand forecasting accuracy and enabling better-informed decision-making.

Storage Capacity & Delivery Footprint

Compared to 3PLs, 4PLs have a more extensive warehouse network, better storage capacity, and broader geographical coverage. In addition, 4PLs can store heavier items and provide more accurate lot tracking.

Financial & Operational Scalability

3PLs typically run more expensive than 4PLs because they demand longer-term contracts to cover daily order volumes. Not only do 4PLs run cheaper, but they also offer more flexible and scalable contracts – 4PLs are on-demand, charging clients only for the resources they use.

Customer Communications

Because 4PLs act as a business’s intermediary, all customer queries run through them before reaching you. This can cause significant delays.

Conversely, 3PLs work directly with merchants, allowing them to resolve issues quickly. Plus, 3PLs deploy the same customer service teams for businesses and merchants, which helps everyone stay on the same page and on top of customer demands.

Integrated Technology

While 3PLs can provide comprehensive warehouse management, they rarely offer the kind of advanced technology that a 4PL can. While both 3PLs and 4PLs use integrated warehouse management software (WMS), 4PLs often take their technological capabilities further with autonomous vehicles and robotics.

How the 3PL Process Works

While no two 3PLs are identical, these logistics service providers typically offer the following services:

• Transportation: 3PLs transport goods from warehouses to buyers. Occasionally, they might tap shippers like UPS, USPS and FedEx.
• Fulfillment and distribution: If necessary, a 3PL provider will manage warehouse operations, including storage, inventory tracking, rates and shipping strategies.
• Finances: 3PLs that provide cost control can lower freight forwarding rates. Financial 3PLs are more common with larger enterprises.

Advantages of 3PL

A third-party logistics service provider can make your supply chain more cost-effective and efficient. Below are a few other benefits you can reap from hiring a 3PL:

• Reduced operational costs: Outsourcing your logistics operations to an outside party is significantly cheaper than hiring an in-house team. You can pay for work as it is completed and invest more in core business processes like marketing and sales.
• Optimized space: If your warehouse is too small to stock all your inventory, hiring a 3PL eliminates the need to pay for a larger space. Instead, you can finance the space you need and scale as necessary, improving your business’s cash flow.
• Minimized inefficiencies: With the appropriate technology, 3PLs can increase speed and efficiency while reducing errors. By automating information transfer, your logistical operations become more accurate.
• Industry expertise: A reliable fulfillment provider has ample knowledge of the logistics industry and how best to reduce costs, increase savings and give your business a competitive edge.

Disadvantages of 3PL

3PLs may not be suitable for all businesses, as they can pose the following considerations:

• Forfeited control: Trusting a third-party fulfillment provider could be difficult, as you have to give up full control of the delivery process. In addition, guaranteeing a positive customer experience is challenging because you lack direct oversight.
• High upfront costs: Because most 3PLs adhere to a long-term strategy, investing in their services can be incredibly costly upfront.

How the 4PL Process Works

The goal of a fourth-party logistics service provider is to oversee your entire supply chain. To do so, it typically provides the following services:

• Transportation: A 4PL service will move your finished goods to one or more 3PL warehouses for distribution.
• Inventory management: 4PLs employ technology for real-time inventory tracking and provide better data visibility for merchants.
• Shipping: Most 4PLs provide last-mile shipping, which involves transporting packages from fulfillment centers to their final destination.

Advantages of 4PL

There are many reasons you might choose a 4PL company instead of a 3PL. Below are a few advantages that might convince you to hire these transportation providers:

• Comprehensive supply chain solution: With a 4PL, you’ll get a single point of contact for all your transportation and operational needs. Your business can eliminate inefficiencies and avoid wasteful logistical practices.
• Improved customer connectivity: While giving up control of your consumer management process can be daunting, hiring a 4PL provider can drastically improve customer satisfaction. 4PLs can increase engagement and answer queries from your target audience.
• Advanced technology: In contrast to 3PLs, 4PLs employ more advanced automation technology like robotics and integrated software.

Disadvantages of 4PL

Despite its bells and whistles, 4PL fulfillment isn’t always the solution. Here are a few cons to look out for:

• High dependency: Because 4PLs play a critical role in your daily operations, transitioning out of one can be extremely difficult. Think about a 4PL as your strategic partner before entering a long-term contract.
• Expensive: Compared to 3PLs, 4PLs may not be appropriate for small business budgets.

3PL vs 4PL: What’s Best for Your Company?

Whether a 3PL or 4PL is best for your company will depend on your business goals and current capacity. While 3PLs are eCommerce companies' most common logistics model, there are also many reasons to choose a 4PL.

For instance, 4PLs can provide excellent logistical solutions for your supply chain if your business is on an enterprise level. On the other hand, newly expanding businesses can benefit from delegating their fulfillment responsibilities to 3PLs with logistical experience.

Key Takeaways

Both 3PLs and 4PLs provide significant advantages that can increase sales, improve your ROI and encourage business growth. However, your choice will depend on your business’s unique requirements. Before you make a decision, remember these key takeaways:

• There are five types of logistics services: 1PL, 2PL, 3PL, 4PL and 5PL. Each model introduces new intermediaries.
• 3PLs follow one of the most common logistics models, providing transportation services and some warehouse management. They are ideal for growing businesses that need to focus on other operational aspects, such as marketing and sales.
• 4PLs provide a more comprehensive solution for enterprise-level businesses that want to delegate fulfillment tasks. They are most appropriate for established companies that are ready to develop a franchise.
• The core difference between 3PLs and 4PLs is the level of logistic services they provide. While 3PL allows for direct communication between merchants and buyers, 4PL creates a second degree of separation that tends to make businesses more dependent on its services.

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3PL vs 4PL FAQs

Is 4PL better than 3PL?

Whether 4PL is better than 3PL depends on your business needs. For enterprise-level businesses with more complex logistics processes, 4PL may be more appropriate.

What is an example of 4PL?

An example of 4PL is a logistics company that manages a merchant’s entire supply chain, from logistics to order fulfillment. While a 3PL will only be in charge of fulfillment and delivery, a 4PL will also handle communications between merchants and buyers. For instance, if a buyer is running out of a particular product, a 4PL will inform the merchant that they need to start producing a new batch.

What services does a 4PL offer?

While they differ from provider to provider, some services that a 4PL could offer include:

• Transportation
• Warehousing and storage
• Picking and packing
• Distribution and order fulfillment
• Last-mile and same-day delivery
• Optimized inventory placement