With more than 70% of Vietnamese people using the Internet [1] and the massive explosion of e-commerce, especially during the COVID period, transportation and logistics services have been developing widely across the country. Such great potential for logistics development has led to increased professional third-party logistics services (3PLs) to reduce the burden of transporting goods for businesses.
However, when providing services, 3PL companies face many difficulties such as high transportation costs, wrong delivery time, delivery progress mainly dependent on drivers, unreasonable vehicle assignment, and no measurement for delivery efficiency and quality. The logistics optimization software is an effective solution for 3PL companies.
The following article will cover general problems in logistics and propose logistics optimization software solutions for the five most common models of 3PL companies.
I. General problems in Logistics
1. Manual route planning
Usually, it takes the driver or coordinator 2-4 hours to create delivery plans and assign orders to vehicles by paper or excel file. Delivery planning relies heavily on experience, leading to a lack of tools to track delivery routes and measure the number of orders in the plan. As a result, the vehicle fill rate is low, and the number of delivery vehicles is higher than expected, causing higher transportation costs (costs for transporting and circulating goods). In case the coordinator leaves, or personnel changes, planning will be pretty difficult.
2. Lack of visibility over the delivery process
Currently, 3PL companies use many communication channels such as email, phone, texting, etc., resulting in incoherent information between managers, drivers, and customers. Besides, businesses still operate order management manually. The manager has to call the driver every hour or wait until the end of the day to check the order status. With the above difficulties, managers do not have complete visibility over the pickup and delivery process in real-time, causing poor and ineffective management.
3. Poor food preservation
The cold chain helps to preserve a variety of foods with special temperature requirements. However, Vietnam’s cold supply chain management still has many gaps: inefficient vehicle capacity, longer travel distance than planned, varied storage temperature between the delivery vehicles, etc. Therefore, the proportion of perishable food during transportation is relatively high. According to the survey results of CEL Consulting with 150 farmers in different geographical areas, the average damage percentage for Vietnamese fruits and vegetables is 32%. At the same time, it is 14% and 12% for meat and seafood, respectively [2].
4. Ineffective reporting
Most 3PLs' current data is managed by humans and stored in multiple sources. Every month, businesses spend hours compiling delivery results and making reports. The data is not aggregated in charts and tables, making it difficult for managers to analyze transportation efficiency on each shipment and offer solutions to improve the next time.
II. Logistics optimization solutions for 3PLs
To solve these difficulties, 3PL companies should look to logistics optimization solutions. Abivin vRoute is the Logistics Optimization Platform for 3PL companies, helping create efficient transportation plans in minutes to minimize logistics costs and maximize fleet productivity.
Abivin vRoute can optimize logistics for five common transportation models of 3PL companies.
1. Distribution Center Model
The Distribution Center model is a model in which goods are transported from the manufacturer to the distribution centers and then delivered to the customer. It poses a problem of optimizing the delivery route that the company needs to resolve.
- Abivin vRoute’s unique algorithm automatically assigns orders for vehicles to maximize vehicle weight and volume, satisfying more than 30 conditions, including order, cost, vehicle type, forbidden road, etc. Previously, each vehicle could only carry 50-60% of its weight. Thanks to this logistics management platform, this number can increase to 85-95%. Given the same quantity of goods, the vehicle fill rate increases while the number of delivery vehicles reduces, thereby saving transportation costs for the company.
- Abivin vRoute also helps track and manage orders in real-time, increasing transparent and seamless communication efficiency. As a result, businesses will not have to frequently call to check on drivers or wait too long before knowing the delivery results. If a problem occurs in the delivery process, managers can deal with it immediately to reduce decision-making time, improve existing services, and increase customer satisfaction.
Abivin vRoute - Logistics Optimization Platform for 3PLs
2. Pickup and Delivery Model
In the Pickup and Delivery model, delivery vehicles start from the warehouse, move to the pick-up point, and then transport to the drop-off point.
With Abivin vRoute, managers can quickly create Full Truck Load (FTL) or Less Than Truck Load (LTL) orders. After specifying the pick-up and drop-off points (for FTL), multiple pick-up and drop-off points (for LTL), and information about the vehicle type, subcontractor, palletized products, non-palletized products, etc., Abivin vRoute will optimize the delivery routes. Moreover, the platform also calculates the drivers’ rest time after traveling long distances. For example, they will take a break from 3 to 4 hours after eight straight working hours.
Besides, Abivin vRoute provides different methods to record Proof of Delivery such as Photo check-in, Electronic signature, OTP SMS to help ensure shipment completion.
3. Multimodal Transport
Multimodal transport is a mode of freight transport that combines at least two modes of transport such as trucks with motorbikes, barges with trains, or a mixture.
In Vietnam, there are recurring traffic congestion, too small alleys to drive trucks or large vans and many prohibited hours for vehicles. Therefore, multimodal transport helps 3PL companies take advantage of the specific characteristics of each vehicle to deliver goods more efficiently and perform various transportation kinds such as cold chain, long-haul, container transport, etc.
So how do 3PLs effectively manage multimodal transport?
Abivin vRoute will automatically assign orders to the right vehicle based on the input data, thereby increasing the vehicle fill rate, reducing the number of delivery vehicles, and saving delivery time. The platform also allows 3PL companies to track real-time locations of cars, delivery progress, delivery status, resulting in transparent and seamless management. In addition, Abivin vRoute also tracks the past location of vehicles for efficient planning and prevention of drivers' fraud risks.
4. Express Service
The strong boom of E-commerce has led to more and more goods bought, sold, and exchanged on online channels. It has encouraged rapid logistics development throughout the country.
Thanks to a unique optimization algorithm that satisfies more than 30 different constraints, Abivin vRoute helps B2B/B2C/C2C e-commerce models optimize their delivery plans to serve a large number of customers and orders.
After entering or synchronizing the necessary data into the software, such as order, weight, cost, vehicle type, forbidden road, etc., Abivin vRoute will automatically optimize the delivery route and assign appropriate vehicles and drivers. Information about orders, routes, time, drivers, etc., will also be synchronized on the Web App for managers, dispatchers, and Mobile App for delivery staff and customers. As a result, the transportation process is transparent and clear, ensuring seamless communication between parties in the supply chain.
Cold-chain logistics is a complex problem for many 3PL companies. One of the reasons stems from ineffective transport management.
Logistics Optimization Platform - Abivin vRoute can connect with telematics devices on the vehicle to easily monitor fuel usage, travel speed, vehicle stops, storage temperature, etc. Products are delivered at the right temperature and at the right time to the customer.
Abivin vRoute solution also helps businesses to export logistics reports with just a few simple clicks quickly. Companies can promptly analyze various charts and tables, assisting managers in making decisions quickly, improving service quality, and increasing customer satisfaction.
References
[1] Báo cáo Digital 2020 Toàn cầu bởi Hootsuite
Logistics Optimization Software For 3PL Companies