Third-party logistics margins are notoriously tight.

And when you’re dealing with dozens of different business models, running multiple fulfillment centers, and coordinating a large team of workers, margins can shrink without anyone noticing.

In this episode of Unboxing Logistics, Ryan Frankenfield, director of implementation at Datex, shares tried-and-tested advice for defining processes, learning where your time and money are going, and plugging any leaks.

As Ryan has talked with 3PL operators throughout his career, he’s noticed a troubling pattern: a surprising number of them don’t know what their margins are.

One problem? They don’t account for the complexity of the business model. Many 3PL operators assume the fulfillment process is handled the same way for each customer, but small exceptions happen all the time—and if you don’t charge for extra labor, you’re losing money.

“Unless they're really looking at the customers with a magnifying glass, looking at the processes, looking at their rate cards to see if the rate cards match the actual labor, margins are sometimes unknown.”

Before you can increase your margins, you need to find the leaks. That’s where a warehouse management system (WMS) comes in.

Ryan says, “A spreadsheet can only go so far. … There's nothing there that is standardizing the way you input data. There's nothing that's going to catch those exceptions. And that's the value of having a WMS: the process is standardized.”

He notes that a WMS won’t necessarily solve all your margin problems at once. But “But it helps expose those exceptions that become the norm.”

When you make the leap from spreadsheet to WMS, the best way to set yourself up for success is to have standardized processes. For 3PLs that aren’t quite there yet, Ryan’s advice is simple: “Sit in a room, lock the doors, and don't [leave] until everything is defined.”

To get the full picture of your company’s operations, he recommends including people with various perspectives.

“If you have a finance person in the room … [they can’t] tell you how you should be receiving, what are those exceptions, how do we handle those pallets. If I have an ops person that works on the floor … they're likely not going to be able to tell [you] how they should be billing for those things.”

• Connect with Ryan on LinkedIn: https://www.linkedin.com/in/ryanfrankenfield/
• Visit Datex’s website: https://datexcorp.com/

In our Meet the Carrier series, we sit down with some of the most innovative transportation providers to learn what they’re doing differently. This week, host Lori Boyer talks with Jax Zheng, director of partnerships at UniUni, about the carrier’s mission to “democratize the landscape of last-mile logistics.”

Jax notes that “traditional carriers … [are] a lot more rigid,” and often struggle to keep up with market developments. UniUni was built to be the opposite: flexible and quick to adapt. According to Jax, they have “really focused on [developing] a tech-enabled solution to the last-mile problem.”

For ecommerce businesses shipping lightweight packages (up to 25 pounds), UniUni is a great alternative to traditional carriers.

For Jax, flexibility and customization are at the heart of what UniUni does.

Rather than focusing on transactions, the carrier focuses on understanding their clients’ needs and “giving bespoke solutions.”

The relationships are important too. As Jax puts it, “At the end of the day … this is a long-term company, it's a long-term goal. We're not here to be two, three years. We want our clients to be with us for their lifetime, as long as their business is running.”

UniUni has recently launched their cross-border service, allowing clients to ship from the U.S. to Canada.

While this is an exciting opportunity, some businesses might hesitate when it comes to expanding internationally. Jax acknowledges their concerns, but he also points out that shipping to Canada isn’t as complicated as it seems—and it usually pays off.

“Once you find a competent partner in Canada who can deliver and execute, you can grow that line of business, and it'll be a really stable line of business. … Once you get the process and the system down … it just starts running.”

• Connect with Jax on LinkedIn
• Visit UniUni’s website

From dabbling in ecommerce as a teen to running a 3PL today, Krushna Patel, CEO at Awesome Solutions, has spent years building businesses—and he’s learned a lot about what sets the successful ones apart.

In this Unboxing Logistics episode, he sits down with Lori Boyer to discuss how he discovered the world of fulfillment, his advice for those hoping to follow the same path, and what a thriving 3PL looks like behind the scenes.

Krushna’s advice to prospective founders comes in two parts: start small, and think long-term.

He explains, “There are ways to do everything at a smaller scale to test it out, get proof of concept. I think people spend too much time trying to get their version one to become the best final product ever. It's not going to be that way.”

When making business goals, Krushna recommends looking to the future. “I'm setting a five-year horizon of what I want the company to look like, and then I'll shrink it down into a three-year, into a one-year, and then … monthly.”

When asked what every 3PL should be doing from day one, Krushna answers without hesitation: “I would focus very much on communication.”

He goes on to say that with so many 3PLs competing for clients, great communication is a huge differentiator. “The ones that show [they’re] reliable, [they’re] with you when you scale, that makes a huge difference. Because nobody wants to have an issue and then talk to an AI agent.”

While Krushna acknowledges that simple requests can be automated with AI, he strongly believes that shippers should always have access to a human to discuss more complex issues.

When it comes to shipping, Krushna emphasizes that flexibility is a must. 3PLs work with a wide range of clients—and each of them wants specific services. To cater to each shipper’s needs, 3PLs should offer a carrier portfolio with plenty of options.

In Krushna’s words, “You want to have your net cast wide enough [to] have those different service levels for each client's requirements.”

• Connect with Krushna on LinkedIn
• Visit Awesome Solutions’ website