What is 3PL?
A 3PL provider is a third-party logistics company serving as links in outsourced distribution and fulfillment stages of the supply chain. 3PL companies provide full-scale logistics services such as transportation, warehousing, customs clearance, and other logistics-related activities. Basically, 3PL helps outsource a part of or a full logistics operation to a logistics service provider.
A recent New York Times article shared some insights on how the pandemic is forcing consumers to shop online during black Friday deals and US consumers have spent a whopping $9 billion on black Friday shopping, a 21% increase from 2019 and according to a 3PL central logistics provider, they saw an order volume increase by 42% year over year for holidays, which magnifies the impact increased volumes had on 3PL service providers.
Why EDI is important for 3PL Companies?
3PL companies exchange thousands of documents every day and this number can be significantly higher during the holiday season. It’s impossible to handle this level of document processing using manual paper-based processing or relying on faxes, mailing, or emails can cause significant delays in order processing and affect the entire supply chain operations.
EDI helps 3PL providers to send and receive high volumes of data in a standardized EDI document and helps share information quickly and securely. EDI helps 3PL companies to automate order processing and warehouse inventory management. Improves trading partner relationships and enhances supply chain predictability.
EDI provides 3PL companies with valuable information about the date of shipments, the number of goods, where they should be delivered, information on packaging, their sizes, and more. This information ensures that there are minimal/no delays in processing the package/order.
To automate this entire process of data exchange, 3PL providers and product suppliers integrate EDI solutions into the existing internal business systems and this eliminates the manual data entry into ERP accounting, or other business systems.
How 3PL service provider helps retailers and brand manufacturers in the order fulfillment process
Let’s take an example of a real-time scenario,
Say you are the brand manufacturer and taking orders from retailers. Here are the steps that take place during the order fulfillment,
Step 1 – The transaction begins when a retailer sends you a purchase order (EDI 850)
Step 2 – You now need to fulfill this order from your warehouse or a 3PL. If you are using 3PL, you will send EDI 940 (warehouse shipping order) to your 3PL asking for the order to be fulfilled.
Step 3 – Once 3PL fulfills the order, they send EDI 856 (ship notice manifest) on your behalf to the retailer indicating that the shipment has left the warehouse
Step 4 – Then 3PL providers will inform you (brand manufacturer) that the shipment has left the warehouse by sending you EDI 945 (warehouse shipping advice)
Step 5 – Once you receive the EDI 945 from the 3PL provider, you can invoice the retailer with EDI 810 because now you have confirmation that the product has been shipped
EDI also helps brand manufacturers and 3PL providers with stock transfer transactions
It’s important that the 3PL provider is stocked with products to meet the customer demands
Step 1 – Brand manufacturers can send EDI 943 (warehouse stock transfer inventory advice) to their 3PL provider informing them about the upcoming inventory and when it will be delivered
Step 2 – Then similarly 3PL provider can send EDI 944 (warehouse stock transfer receipt advice) to notify the brand manufacturers that the inventory has been received and can include any adjustments to the original EDI 943 due to potential damaged or missing products.
Benefits of using EDI for 3PL companies
EDI helps scale your 3PL business
Adding new brand manufacturers is easy and can help build strong business relationships.
Saves Time
Using EDI your document processing time is faster and now you can exchange data in minutes and thus saving you lots of time
Improve cash flow
EDI eliminates manual processing and automates your entire order and invoice processing thus reducing invoice delays and improving your overall cash flow
Automation
EDI automates your data processing and can directly transfer and convert data into various formats/standards directly to and from your internal business systems and eliminating the manual work
Smart Inventory Management
Manage inventory and margins more effectively
Shipment notices are on time and accurate, reducing chargebacks
Most chargebacks are due to late or incorrect advance ship notices (ASNs) using 3PL suppliers can ship inventory faster and ensure accuracy and thus avoid chargebacks.
How Commport EDI Solutions Can Help Your 3PL Business
Trust our Commport experts for your EDI needs,
Nestled within the niche EDI industry, Commport Communications has provided valuable and exceptional service to its customers for over three decades. We operate not only as an EDI Translation company but also as a VAN (Value Added Network). Using specialized translation software, Commport can translate any file type to EDI X12 standard, as well as EDIFACT, and due to our global reach, Commport is interconnected with VANs worldwide.
With a 99.99% uptime and full redundancy, Commport’s network infrastructure makes it one of the most reliable EDI companies in the industry. Our commitment to network security and stability has led to major investments in security enhancements to ensure the privacy of our customers’ data. Unlike many of the big-box EDI providers, we at Commport are proud to remain family-owned and continue to own and operate our data center in-house.
With our fast and seamless onboarding process, you can rest assured that we will schedule the required trading relationships, with the mandatory EDI transactions, in a short period. Our comprehensive EDI solution is also capable of generating UCC-128/MH10 labels, as well as reports such as packing slips and pick lists. Our focus is to deliver the data you require to move your goods quickly and efficiently.
For over thirty years, Commport’s philosophy has been centered around making our customer’s business more efficient through the products, services, and support. Commport continues to scale the peaks of the EDI industry in terms of Customer Service, offering dedicated 24/7 service in multiple languages. And as a bonus, we offer some of the most competitive rates in the industry.
Let Commport take your business to the next level because making your business more efficient is our business.
Ready to find out more about Commport EDI Solutions?
Need Help? Download: EDI Buyers Guide
Unlock the full potential of your supply chain with our comprehensive EDI Buyer's Guide — your first step towards seamless, efficient, and error-free transactions
Frequently Asked Questions
Electronic Data Interchange (EDI) is the automated exchange of business documents between trading partners in a standardized electronic format. For 3PL providers, EDI offers streamlined communication with clients, suppliers, and carriers. It facilitates real-time sharing of shipment details, order information, inventory levels, and invoices, leading to faster and more accurate logistics operations.
EDI enhances collaboration by enabling seamless and automated data exchange between 3PL providers and their clients. Through EDI, clients can submit orders, track shipments, and receive status updates in real time. This reduces manual communication, minimizes errors, and enhances transparency, fostering stronger relationships and customer satisfaction.
EDI streamlines transportation and shipping processes by automating communication with carriers and freight forwarders. It facilitates electronic booking, tracking, and scheduling of shipments, reducing manual paperwork and phone calls. EDI also enables real-time monitoring of transit times, delivery confirmations, and potential delays, allowing 3PL providers to proactively address issues.
