SPS recently surveyed nearly 200 3PLs about how data accuracy, speed and automation impact their business. The responses were consistent across all sizes of 3PLs and all industries they serve.

Lead Times Matter

Data automation is about timing. 3PLs need the details about when orders are coming in and need to be shipped. But also important is the timing of this communication. Warehouses are busy places. Their schedules are tight and their staff hustle to keep orders on track. Advance notice from customers allows 3PLs to schedule resources more efficiently, allocate warehouse space and maintain high safety standards. By automating the flow of data, customers can ensure that their details reach and are put in motion by the 3PL quickly, and not sitting in someone’s email.

As consumers expectations for rapid fulfillment increase, 3PL speed must also increase. Advance notice may be measured in minutes or hours, not days. Any extra time is useful to a 3PL and provides the services they are equipped to deliver.

Better Data Equals More On-Time Deliveries

Retailers often measure suppliers on two key factors: on-time shipments and complete orders. One way to boost on-time deliveries is to provide 3PLs with accurate order information as early as possible, with as few changes as possible. Using EDI or another form of automation to send this data reaps benefits for all involved: the supplier, the 3PL and the retailer or consumer.

In the study, 3PLs ranked improving on-time deliveries as the top customer benefit of timely data. In their survey responses, many noted the delays that occur when data is incomplete or inaccurate. This requires their team to correct it and this takes valuable time. With today’s quick order cycles, any delays can risk shipment deadlines or mean shipping using a more expensive means to still arrive on-time.

3PL Speed Improves with Automation

Nothing makes 3PL staff smile like seeing orders ship out from the dock and waving to the driver. We all love it when our to-do list shrinks. Today’s 3PLs are doing everything they can to pick, pack and ship more orders faster than ever. Automation makes this possible. From WMS to EDI to robotics, today’s warehouses are continually advancing to speed 3PL fulfillment.

Automated data flows from customers have a direct impact on warehouse operations. 74 percent of 3PLs stated that improved automation led to faster shipments. And, 72 percent stated that complete and timely data allows them to ship faster on behalf of their customers.

What did 3PLs Have to Say about Automation?

SPS asked 3PLs what was the one thing that customers could do to help them be faster. The responses all zeroed in on timely data and/or advance notice of orders or changes.

What do 3PLs need from customers in to improve fulfillment speed?

• Enough lead time and complete order information
• Provide orders a day in advance
• Minimum 48-hour notice for shipments
• Timely data transfers
• More advance notice for special projects/changes in scope
• Provide order data earlier
• More time between dropping an order and needing to ship
• Provide order shipping and inbound product information more than 24 hours in advance

Interested in learning more about 3PL automation? See how SPS is helping 3PLs standardize and automate order and item data with SPS for 3PLs.

Here are three strategies to optimize omnichannel fulfillment and overcome complexity.

Adapt to changing consumer shopping habits

3PLs have encountered ongoing challenges, including shifting consumer shipping trends that accelerated during the pandemic and continue to change today. Suddenly, your customers are asking you to handle not only B2B pallet shipments plus thousands of individual eCommerce orders. Continuing to meet your customers’ fulfillment expectations places immense strain on your resources.

To address this challenge, 3PLs should invest in scalable software and automation tools that optimize order processing. Automated systems will also maintain accurate stock levels and efficient inventory allocation between channels.

Meet varied fulfillment requirements

Your customers’ requirements can vary widely. Some may need special packaging, inserts or labeling. Others may work with various retailers, each with their own demands.

Keeping track of the requirements on your own can be daunting. Plus, these requirements frequently change, and non-compliance can result in chargebacks and strained relationships.

To ease this challenge, you can work with a third-party expert that tracks requirements and changes on your behalf. This partnership will boost your agility and responsiveness to your customers’ evolving needs.

Ensure your systems work together

Customizing processes and systems to meet diverse customer demands is part of your daily routine. But making all these customizations work together harmoniously is the real challenge.

For example, some customers may have straightforward Shopify integrations. Others demand point-to-point EDI connections for working with large retailers.

Building one-time connections to all your customers and systems creates a fragmented and unsustainable tech stack. To conquer this issue, it’s imperative to develop a comprehensive technology strategy. This strategy should encompass scalable systems and processes, a cohesive integration approach, and strategic partnerships to provide support in achieving your goals.

Avoid IT overload with SPS Commerce

Instead of taking on cumbersome IT projects to meet these needs, 3PLs can explore solutions that allow them to scale, optimize and connect their systems. This is where the SPS for 3PLs solution can play a vital role.

We understand the complexities logistics providers face daily. Our solution offers a single, standardized data feed into your system of record, whether that’s a custom-built system or an out-of-the-box WMS. This means you can focus your efforts on value-added activities that truly matter to your customers.

Connect with our expert team to explore how our tailored 3PL solution can help you stay in sync with your customers without straining your internal resources.

• What EDI shipping documents are used most?
• How does EDI shipping help with in-transit updates?
• What are the EDI shipping transactions used in transportation?
• Why should you integrate EDI with your TMS?

What EDI shipping documents are used most?

As you might guess, most suppliers start using EDI in their transportation process at the beginning. They want to automate how they tender a load to a carrier. Once carrier selection is completed in a Transportation Management System (TMS), like Oracle Transportation Management (OTM), the next step is to tender the load. The EDI 204 Motor Carrier Load Tender transaction does just that. It provides the full-truckload (FTL) or less-than-truckload (LTL) carrier with the details needed, so they can accept or reject the load.

When a carrier receives an EDI 204, their answer is communicated back to the shipper using an EDI 990 Response to Load Tender. The shipper knows at once if the load is accepted and ready it for pickup. Or, if it’s rejected, they can tender it to the next carrier on their list.

Suppliers like using EDI to manage this transportation process because it’s much easier and requires fewer internal resources. This is especially important as volumes increase due to seasonality or growth and adding additional IT resources isn’t desired. Shippers know which loads are covered and their EDI automatically updates their TMS with the latest shipment details. Everyone has accurate and complete information, unlike when emails, calls or texts are used.

How does EDI shipping help with in-transit updates?

Your retailer wants to know where their shipment is and when to expect it at their dock. After your pallets leave your warehouse, this information is only available from your carrier. So, how can a supplier comply with a retailer’s request for updates on the delivery? With an EDI 214 Transportation Carrier Shipment Message.

Using GPS equipment on the truck, most carriers can automatically send their location to the retailer and supplier so everyone can pinpoint where the shipment is. For many orders, retailers require this information at various time intervals such as every 15 minutes.

This status information is valuable to both trading partners, especially given the time-sensitive nature of logistics. Any delays due to weather, construction, breakdowns, etc., are tracked and everyone knows when the shipment is back en route.

What are the EDI transactions used in transportation?

Here is a list of the standard EDI transactions used to communicate transportation-related details between suppliers (shippers) and carriers.

• 204– Motor Carrier Load Tender – used by shippers to communicate a request to a full truckload motor carrier for the movement of a shipment.
• 210– Motor Carrier Freight Details and Invoice – replaces paper invoices and is used by freight carriers.
• 211– Motor Carrier Bill of Lading – replaces paper bill of ladings transmitted from a shipper to a carrier
• 214– Transportation Carrier Shipment Message – used by truckload and LTL carriers to inform shippers of the detailed status of their shipments.
• 215– Motor Carrier Pick-Up Manifest – provides a listing of the shipments tendered to a carrier from a shipper.
• 990– Response to Load Tender – confirms or rejects the tender request from the shipper.

Why should you integrate EDI with your TMS?

No one likes manual entry. It’s tedious, error-prone and slow. Carriers and shippers need to move shipments quickly and accurately in today’s retail environment. EDI automates the process and keeps shipments moving, especially when it’s integrated with your TMS.

Most shippers choose to integrate their EDI with their TMS to cut data entry and do EDI from within a system they already know. They can more easily manage increasing shipment volumes during their busy seasons and can easily find documents related to any load.

How to get started with transportation EDI?

Ready to take the first step to a more efficient process? Looking for less stress in your day? With EDI, you have two choices: full-service or do-it-yourself (DIY). If you have the EDI skills internally, a DIY or managed service will likely fit your need. If you don’t or need your team focusing on other projects, a full-service EDI provider is a better option. They’ll provide the technology, staff and knowledge, and manage EDI on your behalf.

SPS Commerce, a full-service EDI provider, works with more than 50,000 subscribing customers to keep orders and shipments flowing. We know EDI, have the largest retail network and have hundreds of staff waiting to serve you.

Want to learn more or see a demo? Contact us to speak to a logistics expert and learn how easy it can be to automate transportation documents with EDI.

What is a 3PL provider?

In a nutshell, a 3PL provider, or third-party logistics provider, is a company that specializes in the storing and shipping of products on behalf of other businesses.

3PLs are experts in logistics and used by suppliers that have:

• Outgrown their internal shipping department’s capacity (physical and/or staffing)
• Need extra warehouse capacity or want to place products closer to customers without investing in a facility
• Have taken on new retail customers with complex shipping requirements (e.g., drop shipping)

A 3PL provider can be one of the most important decisions a supplier can make. These partnerships manage an important, customer-facing step. They communicate inventory levels, pick and pack orders, and ship your products to their destination. A 3PL specializes in these activities and can effectively store and ship your items to comply with wholesalers, eCommerce retailers, marketplaces and drop-ship program’s shipping requirements. Now that you understand what is a 3PL provider, the next question is how to determine which 3PL is right for you.

Before you hand off this important aspect of your business, you need to understand a 3PL’s capabilities and business including:

• Stability. Are they financially stable and capable of meeting your fulfillment needs?
• Scalability. Do they have the capacity and staff to host your inventory and ship orders fast, especially during seasonal sales spikes or for demanding customers?
• Technology. You’ll need to share inventory, shipping and labeling information to stay compliant with your customers, can they electronically communicate this data with your business?

Let’s explore each of these more in-depth.

Can you trust a 3PL with your business and inventory?

This isn’t an easy question. You’ll need to ask some direct questions to determine the health of their business and their ability to serve your needs. Check to see if they are financially viable, carry the necessary insurance, can provide references and have ownership of physical space in the desired region. Ask about their staffing and if they have any labor shortages.

These are all important questions and should be part of the vetting process of choosing a logistics provider. After all, you’ll be trusting the 3PL with your inventory. Be sure it is protected and cared for.

Will the 3PL meet seasonal spikes or complex requirements?

Scalability is a primary reason to choose a 3PL. They offer suppliers additional warehouse capacity and skilled staff without a direct investment. 3PLs should be able to offer same-day fulfillment, as well as meet the industry’s latest trading requirements. This is important. You need to know that the 3PL can support your customer needs, as well as your business peaks and valleys, without falling down.

When determining the right 3PL, it’s important for you to know the velocity of your order volume. When do peak seasons hit and how long do they last? Does the 3PL have excess capability to devote to your business during this time? Will they have enough labor to process a spike in orders? Clearly communicate when your peak season(s) occur and how quickly orders increase during this time.

And don’t forget to ask about growth. As your business signs with more retailers or marketplaces, can they grow with you?

Does the 3PL communicate electronically with you (and your customers)?

You are looking at partnering with a 3PL to save time. But this won’t happen if your staff needs to manually send orders or place calls to check on shipments. Instead, make sure your 3PL has the robust technology needed to manage the shipping process and provide the data you need without direct intervention.

3PLs should know the trading requirements of your retailers or marketplaces, including shipping timelines, label and packing slip specifications, and needed communications such as the Advance Ship Notice. They are responsible for keeping your fill rates and shipments compliant with your retailer’s demands.

Good 3PLs have multiple, automated ways to receive and send order and shipment information electronically, including EDI or websites for the customer to enter information. This technology takes times and costs out of the supply chain and keeps you up-to-date on shipment statuses, tracking numbers and more.

SPS Can Point You Towards the Right 3PL

Now you can answer ‘what is a 3PL provider?’ but more importantly you have some tips and questions to help you determine the right 3PL for your business. There are many 3PLs out there, and it can take time to sort through them to discover those you wish to engage in an RFP process. Can we offer some advice? Call SPS Commerce. We work with 3PLs of all sizes and specialties. We know which ones are trusted by our 50,000 subscribing customers and which ones use technology to keep up with retailers’ requirements.

Contact SPS, and we can point you towards several 3PLs that meet your requirements. We can help you find the right one to elevate your business and gain efficiencies!

3PLs use the EDI 945 to let their customer know that a shipment has gone out from the warehouse. This communication is often paired with the EDI 940 (warehouse order) as the completion of the order fulfillment cycle.

The EDI 945 shares the following information with a customer:

• Ship-to and ship-from addresses
• Shipment date
• Transportation method (e.g., carrier, air, rail)
• Service level (e.g., overnight, 2-day, ground)
• Item(s) and quantity shipped
• Packing specifics (e.g., inner packs, cases)
• Tracking information

The official name of the transaction is the EDI 945 Warehouse Shipping Advice, but most of us in the industry just call it the shipping details.

Optimizing Staffing

When emails and phone calls are needed to communicate information with a customer, it takes staffing resources away from other tasks. Automating the sending of shipping details takes a load off of customer service teams. They know that the shipping details have been sent to the customer(s), there is no need to double-check. And the customer receives their information from a single source and in a timely manner. There is no waiting or delay.

The EDI 945 is the preferred way to communicate shipping details. It automates a rather simple, but important task. By doing so, the 3PL complies with supplier requirements without the need for additional staff.

Communicating Everything Needed for the ASN

The goal of an EDI 945 is likely to communicate the details needed by the customer to complete an advance ship notice (ASN). This data is likely needed by the retailer, and the supplier is typically required to send it to the retailer shortly after the shipment leaves the warehouse. 3PLs find that by sending this EDI transaction, they can ensure that their customer has all the data needed to comply with a retailer’s ASN requirements. And, the 3PL can send the details in a timely manner as often times retailers require this information from the supplier within a certain amount of time after shipment. No more frantic phone calls or emails. Once the EDI 945 is sent, the 3PL’s job is done.

The Role of an EDI 945 in eCommerce

One of the most important shipping details needed for an eCommerce order is the tracking number. Consumers expect to receive this information shortly after placing an online order. Luckily, it’s one of the components of the EDI 945.

The UPS, FedEx, USPS or other carrier’s tracking number is part of the shipping details communicated via the EDI 945. Communicating the tracking number using this method ensures that the number is connected to the eCommerce order (the EDI 940). It’s accessible from the customer’s systems and not buried in an email or voicemail that could be missed.

Full-Service EDI is the Answer

There are many ways for your 3PL business to do EDI. All EDI is not the same. If you partner with a full-service EDI provider such as SPS Commerce, the complexities and day-to-day management of EDI is taken care of by their experts. This model is attractive to 3PLs that want to keep their focus on building their business, not EDI.

Ready for the EDI 945?

If your customers are asking for the EDI 945, I’m not surprised. As you can see, there are many good reasons for it, especially for eCommerce orders. Learn more about 3PLs and EDI here, or contact us to speak with an EDI expert.

Your customers use the EDI 940 to pass along an order from a retailer, a direct-to-consumer channel or a drop-ship account. Within the EDI 940, you’ll receive the details you need to fulfill the order, including:

• Description of item(s)
• Delivery date
• Quantity of item(s)
• Shipping details (method, name, address, etc.)

The document can also communicate complex shipping requests, such as splitting orders by items and/or shipping to multiple parties.

EDI 940 Transactions Drive Order Completeness

In a recent survey of 3PLs, SPS asked about the challenges of accurate order fulfillment. We specifically asked, “what do you wish your customer did better regarding providing order data?” The responses showed that most 3PLs received orders on time, but the orders often didn’t include everything needed to fulfill them. The 3PLs had to waste valuable time to make phone calls or emails to secure all details needed.

Some of the 3PL’s responses for better communication included the following:

• Send all relevant information upfront to minimize changes or late additions.
• Include billing account and other information.
• Avoid using multiple item numbers for the same products.

The EDI 940 solves these issues. With the EDI 940 and SPS, your customers can’t send you an order unless all the details are included. No missing shipping addresses, item quantities or delivery dates. If your customer doesn’t include all necessary data in the order, they can’t send the EDI 940. This is a good checkpoint for your customer. They are alerted to the missing or inaccurate data and fix it before you see it. It’s time to say ‘good-bye’ to back-and-forth calls and emails.

Speeds Up the Communication of Drop-Ship Orders

3PLs know that direct-to-consumer and drop-ship orders require fast turnarounds, often within hours of the order being placed. There is no time to waste.

When your customers automate and begin using the EDI 940, you can receive orders faster. Why? Because the order moves from your customer to your systems without needing any data entry or manual tasks. Even if your customer needs to review a retailer’s order before sending it to you, this is done much faster as the data is already in their systems. They simply validate or confirm the order, there is no need to enter any data.

Many 3PLs integrate the EDI 940 to feed order information directly into their warehouse management system (WMS). This means customer orders appear in your systems in record time, ready to pick and pack.

This automation is highly useful when every minute counts, like in the case of most direct-to-consumer and drop-ship orders. The EDI 940 can save you time, which means your teams will be less stressed about meeting tight shipping deadlines and you can deliver better customer service.

The Full-Service EDI Advantage

3PLs are being asked to do more by their customers, including EDI. For most 3PLs, this doesn’t mean you want to hire EDI experts, add headcount to do manual entry or manage additional systems. Instead, the best answer is to partner with a full-service EDI provider like SPS Commerce.

At SPS, we have hundreds of EDI experts to make the EDI 940 possible (as well as any other EDI transaction you desire). Our teams also manage and monitor your EDI operations to be sure everything is working as it should. SPS knows trading requirements, and when they change. We know how they want orders shipped, labeled and communicated, so you (and your customer) will be up-to-date and in compliance.

The bottom line, full-service EDI from SPS makes life easy for you.

Ready for the EDI 940?

Orders can come into a 3PL in various ways, but the most common and desirable is the EDI 940. It delivers the accuracy and timeliness that your business needs for on-time, complete fulfillment. Learn more about 3PLs and EDI here, or contact us to speak with an EDI expert.