Logistics teams in every industry are experiencing tough pressures, from rising costs to labor shortages. But it’s important to remember that not all logistics organizations are created equal. For example, the world’s logistics services providers (LSPs) are facing very different challenges and opportunities today than, for example, the logistics teams at manufacturing and retail enterprises.

That’s why Blue Yonder has developed specialized capabilities, and a dedicated practice area, aimed specifically at LSPs. We have over 175 LSP customers today, and that number is growing as leading LSPs recognize the unique value that Blue Yonder can add for their business.

Recently I was joined at a LinkedIn Live event by Pat Jones, Senior Director of Transformation Advisory at Blue Yonder, to examine our solutions and services for the LSP community. The event, called “The Unique Value Proposition Blue Yonder Delivers to LSPs,” looked at the big challenges facing LSPs today — and how Blue Yonder is qualified to help.

Capturing the logistics outsourcing opportunity

So how exactly are the challenges of LSPs different and distinct? As I mentioned in a previous blog, in addition to mastering complex day-to-day operations challenges, LSPs also must contend with more long-term, strategic issues. To achieve growth, they need to position themselves to capitalize on the enormous, and growing, market for logistics outsourcing — estimated to increase to $1.642 trillion by 2032.

That might mean expanding their physical footprints or service capabilities. It might mean strategic mergers and acquisitions. But one thing is certain: It means establishing clear-cut digital leadership. The only way LSPs can increase their scale and scope, without negatively impacting service levels or margins, is by leveraging advanced transportation management system (TMS),  warehouse management system (WMS), labor management, warehouse execution system (WES), yard management system (YMS), returns management system (RMS), digital supply chain network and commerce solutions.

These solutions not only automate daily tasks, from warehouse picking to load building, for increased speed, accuracy, efficiency and resource utilization. But, enabled by artificial intelligence (AI), they also automate the hundreds of decisions LSPs need to make every day. AI-enabled decision engines ingest huge volumes of real-time data, apply business rules, weigh trade-offs and make optimal choices in microseconds. Often, advanced digital solutions can also pull execution levers with no human intervention. That means LSPs can serve more customers, offer more capabilities and deliver optimal service levels — at the lowest possible cost.

“The reason companies outsource their logistics is because they know LSPs can move and store products more effectively, more efficiently,” says Pat Jones. “That’s their core business. But, as logistics outsourcing grows, for LSPs that’s created a challenge of building scale, quickly, without driving costs so high that it’s no longer a profitable business model.

“At Blue Yonder, we get that scalability challenge. We’ve seen it before, and we know how to enable rapid, profitable growth,” Pat adds. “We help LSPs leverage the most advanced technologies, the most innovative processes and the best practices we’ve learned from hundreds of customer engagements. We help them do their work better, faster and more profitably — even as they’re adding capabilities, adding customers, adding new revenue streams.”

The proven value of Blue Yonder

Blue Yonder has a long track record of delivering results for leading LSPs. For example, Blue Yonder software helps Clipper Logistics move 500 million retail products a year, with speed and accuracy. When Clipper onboards a new customer, Blue Yonder warehouse management capabilities get the customer’s outsourced distribution up and running in just four days.

For Silk Logistics, Blue Yonder software optimizes daily processes, while also enabling this LSP to bring on new customers quickly via scalable deployment templates. In just six months, Blue Yonder’s warehouse management solution was rolled out for major Rhenus customers in Poland, leading to target wins in terms of speed, efficiency, accuracy and overall customer service.

Blue Yonder’s industry-leading solutions in warehouse management, warehouse labor management and transportation management helped Arcadia Cold gain real-time visibility, improve efficiency, and build resilience and sustainability into its operations from the start. As a result, this cold storage and logistics leader was able to launch five new facilities in just 18 months — and is poised for future growth, with three new warehouses under construction.

Driving customer-specific results for every LSP

During our LinkedIn Live, Pat discussed a recent LSP customer that was aiming to double its revenue in five years by expanding its “white glove” specialized customer services. “This customer wanted to capitalize on industry growth by managing very complex shipments requiring precise hands-on coordination — not just of the delivery, but the installation of the product onsite,” explains Pat. “Think of things like ATMs and kiosks — very time-critical infrastructure that can’t be out of service.

“It’s a very complex operating model, and the customer’s challenge was keeping up with demand growth,” continues Pat. “They had no choice but to keep adding labor resources, because everything was based on manual processes. I spent several days with the customer, and they were successful — but it took a ton of work. And all that labor was eroding margins. So the Blue Yonder value proposition was about minimizing labor costs, and eliminating the element of human error, by automating key processes. We also helped identify some risks — damage to customer relationships, damage to carrier relationships — that could really hurt the business and keep them from achieving that ambitious growth target.

“We were able to partner with this LSP and define a digital transformation using a crawl-walk-run approach. The phased implementation would address the most pressing risks, start a cultural transformation and set the stage for early returns,” Pat notes. “It was a really great example of working with an LSP and tailoring the outcome to their specific business challenges and opportunities. At Blue Yonder, we’re not just selling software in a one-size-fits-all manner — we’re creating unique value for every single customer.”

How will you capitalize on this moment?

According to Pat, it’s a critical time for LSPs to embark on a digital transformation to capitalize on the global outsourcing opportunity. Most LSPs, he says, are intent on making big changes. “We see a lot of LSPs growing and expanding. 3PLs are becoming 4PLs. And 4PLs are really becoming supply chain partners with their customers — providing more planning and support, not just execution,” he remarks.

“That’s where a partnership with Blue Yonder can really yield value. We can meet with LSPs and  show them the future. We can demonstrate the exciting possibilities of AI, automation, decision science, data management — and we can help them build out that future and realize the vision. I love my job, because I get to meet with LSPs and help them achieve their growth goals. It’s incredibly rewarding,” concludes Pat.

No matter where LSPs are in their digitalization journey, Blue Yonder’s Transformation Advisory team meets them where they are, with the solutions and services they need — and an ambitious, yet achievable, action plan. What unique value can Blue Yonder deliver for your organization? Contact Blue Yonder today and get started on your own transformation.