Connecting External Logistics Service Providers

Efficient Connection of External Logistics Service Providers

Connecting an external logistics service provider (3PL) optimizes logistics processes by increasing efficiency, flexibility, and scalability. Through modern interface technologies, digital tracking solutions, and automated warehouse management, a transparent, cost-effective, and high-performance supply chain is ensured.

Why Should Your Company Consider Connecting an External 3PL Service Provider?

Connecting an external 3PL service provider (Third-Party Logistics) offers numerous advantages for your company. One of the primary reasons is the (partial) outsourcing of warehouse logistics. By utilizing a specialized service provider, you can focus your internal resources on your core business while benefiting from the expertise and advanced technologies of the 3PL provider.
Additionally, working with a 3PL service provider provides flexibility and scalability. An external logistics provider can quickly respond to seasonal fluctuations or unexpected events and adapt its services to your company’s changing needs.

How Does System Integration Between Our Company and the Logistics Service Provider Work?

Integrating an external 3PL warehouse and utilizing SAP WM (Warehouse Management) or SAP EWM (Extended Warehouse Management) enable significant efficiency improvements in warehouse logistics. The company typically uses an ERP system (e.g., SAP S/4HANA, Microsoft Dynamics 365), while the logistics service provider may operate a custom logistics system. Since different systems are in use, data exchange is carried out via electronic interfaces such as EDI (Electronic Data Interchange) and APIs (Application Programming Interfaces). Middleware solutions such as SAP PI/PO or Mulesoft can facilitate smooth connectivity between systems.

To standardize data exchange, formats such as XML, CSV, and JSON are used. JSON is particularly beneficial for modern API communication. This ensures real-time integration of inventory levels and automated shipment tracking via track-and-trace systems.
 

Connecting External Logistics Service Providers
Integrating a 3PL provider optimizes logistics processes by increasing efficiency, flexibility, and scalability.


What Service and Performance Standards Should Be Agreed Upon with the Logistics Provider?

A key aspect of collaboration is defining delivery deadlines and availabilities. Delays or delivery issues are managed through established escalation processes and close coordination with the service provider. Many companies apply project management methodologies such as ITIL for service processes or agile approaches like Scrum for rapid adaptations.

Return management is another crucial point. The handling of returns and general return management processes must be coordinated and clearly defined with the service provider.
The quality of service is monitored using key performance indicators (KPIs), including:
 

  • Delivery Accuracy (On-Time-Delivery, OTD)
  • Delivery Time (average transportation duration)
  • Damage Rate (percentage of damaged shipments)

Additionally, contractual regulations cover liability and damage claims. Service Level Agreements (SLAs) define minimum standards to ensure consistently high quality.


How Are Transparency, Communication, and Flexibility Ensured in Collaboration?

A high level of transparency and regular status updates are essential for successful collaboration. Communication is handled through dedicated contact persons and regular meetings.

The logistics service provider offers different service levels, including express and standard deliveries, as well as various shipping methods. Adherence to service levels is ensured through dashboards and reports that enable seamless process tracking.

A crucial factor is the flexibility of the service provider to quickly respond to seasonal fluctuations or unexpected events. Many 3PL providers use dynamic storage capacities or on-demand warehousing platforms to temporarily provide additional space.
Likewise, the scalability of the solution must be ensured so that growing business demands can be seamlessly integrated.

What Financial Aspects Are Regulated?

The cost structure must be transparent and can be structured through either fixed rates or consumption-based billing. Common models include:
 

  • Fixed Rates → Monthly fixed costs for warehouse space
  • Consumption-based Billing → Pay-per-use model for storage space or transport
  • Additional Costs for Special Requirements → e.g., express shipping or special storage needs such as refrigerated transport


By connecting a 3PL logistics company and integrating systems with SAP, logistics process efficiency is increased, supply chain transparency is enhanced, and supply chain management is optimized. The use of modern interface technologies, digital tracking solutions, and intelligent warehouse automation enables a cost-effective, flexible, and scalable logistics solution.

Optimize your logistics today! Benefit from increased efficiency, flexibility, and scalability through the integration of a 3PL service provider. Contact us now for a customized solution!

Share Article


Back to overview