WAREHOUSE VISIONARIES
From Survival to Success, How 3PLs Can Help Your Brand Thrive

Evan: Hey everyone. This is Evan from OneTrack and you are listening to another episode of Warehouse Visionaries. Where I sit down with the leaders shaping the future of warehousing and logistics talk about how they're doing it So the rest of us can too. Today, I'm talking to Aaron Hodes. He spent time at C. H. Robinson, ShipBob, and he's now in the TMS space, and we talked all about the relationship between brands and 3PLs. How 3PLs can stand out in a crowded market and the future of warehousing. Let's dive in.

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I appreciate you taking some time to talk to me. I know we're gearing into the holidays and Black Friday, Cyber Monday, so we're getting into a crazy time. But I appreciate you clearing some time on your schedule to hop on and talk to us today.

 

Aaron: Sure. Hey folks. My name is Aaron Hodes. I have been in the e-commerce logistics world for about a decade now. Spent three years at C. H. Robinson on the North America Surface Transportation Team. Working with some of America's largest companies full truckload and less than truckload sales.

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And, seven years at a venture capital backed startup 3PL called ShipBob, which I'm sure many of your viewers and listeners are familiar with. And, you know, was working up there from business development all the way through being one of their you know, top account executives. And really. Got my teeth cut and or cut my teeth rather I should say on everything that has to do with fulfillment and 3PL. And so learned a lot there and this year have been with the transportation management company as well as a as a parcel provider. So yeah, a lot of fun

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Evan: So you really seem to find your niche like, you know, e commerce fulfillment. That's what you talk about a lot on LinkedIn. How'd you go from CH Robinson, this huge global player, how'd you make that leap into the startup world and to, you know, just kind of what you're doing now?

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Aaron: Yeah, I mean, I think it was really all about me actually, you know, fumbling into a role at, at ShipBob. I had heard their name through the grapevine of some, of some friends and then. Candidly, I just saw they had a business development role online and did some creative outreach as I would in sales and, landed a business development role there in, in late 2017.

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And little did I know at that time, that would be kind of the accelerator for, for my career and made a lot of great friends you know, closed a ton of business and had a lot of fun.

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Evan: Nice, it's what the startup game is all about. So it's good.

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Aaron: It was a true startup. I'll tell you that. I did build my own desk when I first joined there and it was so cold that there were like electrical issues. That, that was fun. I was wearing a jacket inside the office and that's what you get for the end of November, early part of December,

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Evan: And then fast forward to now, and I'm sure it's completely different inside the walls there.

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All right. So let's kind of rip the bandit off here. I know what we've talked about off, off camera here is this relationship between a brand and a 3PL, and especially I think now we're heading into Mm hmm. crunch time now for a lot of, a lot of companies on the black Friday, Saturday, Monday space.

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So. Let's break down that whole relationship to the brand of 3PL. Where do you see it going wrong? Where do you see it going right? You know, where do you see it, you know, going not so good? Who's killing it right now?

 

Aaron: Sure. So here's what I think a lot of 3PLs are doing right. I think they, you know, speaking generally, a lot of them have really dialed in, you know, the operational aspects of it. And are really, I think more so now listening to the brand's needs once they're, you know, a client. But I often see the gap in really, let's call it three main areas.

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So I think the first, which will continually be a problem that many 3PLs want to solve for communication gaps. I think at the end of the day, like brands feel as if sometimes they're just another number to their 3PL and they don't always have their vested interest in heart. And, and I think that has to do.

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A lot with this being a very reactionary type industry where the 3PL is often the bearer of bad news. And that's just kind of the way that this industry is. And I think that what would do the industry good as, you know, on the whole would be a lot more proactivity. Even when you're being the bearer of bad news sometimes when you soften that with, Hey. You know, here is the root cause issue. Here's the mitigation tactics that we're putting in place to resolve those issues moving forward. I think that's what really builds that, you know, relationship muscle you know, with 3PLs. I'd say the second gap, between brands and 3PL is just non transparent costs.

 

I talk a lot about this whether that's like surprise fees that just sit up, you know, sit on the invoice. The sales rep promised X, but when reality it was Y. So I think a lot of that can be solved both through, I think, manual processes and or technology. And then, you know, third and foremost, I would say there really isn't.

 

At the heart of it, a lack, or rather, there's a lack of alignment on what the true goals are. I think, and I did this at times, I think a lot of sales reps have learned not to do it, right? But I think a lot of sales reps just naturally, like, go through the process. Right. Oh, we do a, like a sales business needs discovery, then we potentially give a demo.

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We give pricing as if they're just like check boxes. When in reality, I think we need to spend a lot more time really understanding what the brands are wanting from a three PL partner and understanding more so of the business impact that it's having on their situation today. And so I think really the opportunity here is clear is that.

 

You know, 3PLs that are going to win the next decade are going to be focused more on proactive reach out, transparency, and long term alignment. That's really where I think people, or 3PLs rather, should be focusing their time, attention, and effort.

 

Evan: And I want to dig into the, the kind of sales side in a second, but why do you think, why do you think it is that the proactive communication, just, why do you think that isn't the culture of logistics today? Like, what is the disconnect? What's the roadblock there for? Why a 3PL and a brand can't just proactively communicate with each other.

Cause I hear it a lot, right? It's like the, the solution to a lot of problems would be if the brand was able to actually proactively communicate their sales and their inventory forecast and things with 3PL and then a 3PL side, vice versa. But like, why isn't that the case? What's the disconnect there?

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Aaron: That's a good question. I think at least from, from my perspective, maybe from like the 3PL side, like, pay me. They may not necessarily know how to gather the data or may have not the best like chain of command when it comes to like data transfer, right? Like, I think I'll just use this as an example.

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3PL pick, packs, and ships the order. The label gets generated. It gets pushed back to the customer. But then there's like this four day lag without any Tracking on the order. Merchant reaches out to the brand. Brand reaches out to 3PL wondering where is the order. And ultimately what they find is that order never left, you know, the dock of the 3PL.

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And I think if you have processes in place much of which can be solved, you know, by software in this specific example, but many others. You can take that and reach out to the brand knowing that you may be delivering bad news, but ultimately you have their trust. their best interest at heart. So I think a lot of it has to do with 3PLs not knowing where to find the data.

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And also it's maybe just potentially like scare that to deliver bad news. Like no one wants to, no one wants to do that. And I think there's a level of risk naturally that, that comes with that. I think really those two things in combination. I think. When you have access to the data or you're seeing anomalies like, oh, one in one month, they were spending 10 grand.

 

But the next month, you know, all of the various will say their bill was 20 grand. I think that's a good opportunity for the provider to then dig in deeper to understand. Okay, like what? What changed here? Why the large delta? So I think those are just a couple examples that I see typically.

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Evan: Yeah. I feel like a lot of times, especially on the 3PL side, that data is kind of locked up in silos, right? It's either. And a whole bunch of different spreadsheets where no one has time to really spend time to like crunch the numbers or it's. In a stack of paper somewhere that again, there's a, there's a lot of fires to put out in a warehouse that it's just not everyone has the time to, to put their data hat on when they're just trying to get orders out the door fast, safely and high quality.

It's just, it's not always the easiest thing to do to shift gears like that. Right?

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Aaron: I would 100 percent agree. Yeah, what you said definitely resonated. Like the data is very siloed or just like lives in one respective team and you have to go find out who owns that data. And I think that is a challenge in and of itself is trying to figure out, okay, if I find the data, great. But who has this data? Do I need my own login to like Tableau or Power BI or what have you? So there's a number of different, what we often call like tripwires.

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Evan: And then I would also argue that a general manager, ops manager, they didn't. They didn't get to where they are because they're really great in Tableau, right? They got where they are for operational reasons, not necessarily like engineering, continuous improvement, analytical reasons, so it's just a different skill set altogether too.

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Aaron: Absolutely.

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Evan: So on the the expectation setting side, cause I think that's super interesting. What do you think 3PLs can do better or different even before you actually got like get them as a customer, like the whole sales process I already talked about, they just kind of work a process, but there's processes for a reason. So what do you think is the solution there for a 3PL to like better set expectations, get the right information, just. You know, just do a better job in that discovery phase.

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Aaron: Yeah, sure. So I think it comes down to a combination of a couple of things. One is asking the right questions and when to ask the right questions. Number two, when it comes to the operational execution of a brand, getting as much detail and vetting that out internally. With your own team, right?

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Whether that's getting like a a packing SOP, right? For how their orders should be actually picked and packed. I think there's a lot of assumptions that are made on both teams. That can be mitigated if more actual information would be, you know, shared during the sales process and then vice versa.

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If you were to receive like a, you know, an SOP of how to package the orders and the 3PL notices, Oh, maybe we could tweak something here. I think that's where you can even deliver value, whether or not they become a customer, but allows you to differentiate yourself amongst the team. 50 other 3PLs that are just competing on price, right?

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And when you're able to deliver value, whether it's through thoughtful and like emotional, you know, type questions but also like getting into the weeds. I, I think those are two really specific areas that 3PLs can excel you know, in better. And I think that the switching costs of 3PLs are so large nowadays that, you know, It behooves both the brand and the 3PL to really, really dive deep, very deep and leave no stone unturned when it comes to, you know, unlocking, you know,

what the next best thing is.

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Evan: Yeah, I think everyone always talks about it's a it's a relationship. It's a partnership, but then it is kind of interesting how Little time sometimes is spent on both sides to like get the partnership, right? It's just kind of a A marketing slide you put up as opposed to really spending the time to understand the details of the operation.

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And beyond just the obvious things, right? Like everyone wants to know price. everyone wants to know like your, your standard lead time, things like that. But like really getting into the details is seems to be a, just a no brainer now as we get into it. Cause like you said, it's the switching costs from a 3PL to 3PL.

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There's a lot of implications to constantly hopping 3PLs every year, every six months or whatever that case is.

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Aaron: Yeah.

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Evan: So. 3PL is a very crowded market. You just talked about it. What are some of those other, like, non obvious places that a 3PL should maybe focus on to stand out? Like, everyone's gonna say we're technologically driven. Everyone's gonna say we're the safest, we're the fastest. We'll, you know, get your orders out the door in, in top quality. But like, what is the next level to say, you know, I'm actually different from the sea of other people all saying the same thing?

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Aaron: sure. I think when it comes down to it, it's about nailing the basics with excellence. So I think that Really specializing in a particular niche can really help set you apart from others. Whether that's, you know, handling big and bulky, or doing like hazmat, or hey, we're the apparel based 3PL. I think that allows you to be that subject matter expert when it comes to understanding the challenges and the pain points that brands may be dealing with on a day to day.

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I think something that people don't talk about enough is being culturally aligned. Just like, you know, when you are trying to find a new job, you want to make sure that the culture aligns with, you know, employer and employee. I think the same goes for the 3PL and the brand. I think understanding the founding.

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The founders of both the 3PL and the brand and allows you to have really, really intimate conversations. And maybe you know, conversations that you may not have with another, you know, 3PL, right? And really getting to understand the story behind why the brand even exists. I think, you know, I think people in general want others who match their value set.

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And I think there's not enough time being spent on that. There's way, people are overindexed on price. And that, you know, that will always, I feel, you know, stay somewhat the same. I think there's not enough time talking about the challenges. that they have faced or how they overcame those challenges as a 3PL and then more so are the Do you want to work with these people?

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I often said, you know when i'm dealing with tough clients when I worked at shipbob, you know, and I would get Tough questions during the sales cycle I would often joke to myself. Well, this is how they're going to be Turning the sales cycle. Can you imagine how they're going to be as a client and I think I under index that Meaning I didn't put enough value, or didn't put enough, you know, water in that respective bucket and I think others should.

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It's a, it's like a soft cost, if you want to put it like that. It's, it's something you can't always objectively measure, but it's something that your gut, you know, kind of you know, does a stress test on. So, I think that's what people should do. And then, I think transparency, whether that's through billing.

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Or in the sales process, I would often tell people why we're not a fit for you. And I think others respect that and they look at salespeople as wanting what's in it for them. But in reality, if you just take a step back and realize that you're not going to be a fit for everyone, And here are the reasons why you should not go with us.

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It, it's a unique, it's a really powerful messaging tool that ultimately you want to be on the same side of the table with the brand, right? Not going at one another, but you are truly looking out for their best interests. And if that means not working with that company, like that's okay. Cause at the end of the day, that's how I think you're going to win as a seller and

just as a human being as

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Evan: Yeah, I think, I mean, it's a trust game at the end of the day. As a 3PL, you want to be that trusted partner and if you're, if you're just trying to get as many deals in as possible, hide churn, you don't really care what happens. You're going to lose, like, trust very quickly, whereas, I think if you're like, hey, here are the reasons why we're not for you.

Here's someone who plays in your space really well. Call us in three years. I think you're going to earn a level of trust there, right? Like people are going to be like, okay, these guys aren't just selling me something that's completely not true. They're actually like focused on my business and my growth. And then that's going to pay dividends down the road, whether it's with them or whether it's with their friend who has a business who actually is a fit for you. I think that's just, you kind of get that web, but to your point, it's not something that shows up in the P& L a lot of times, it's more of a gut feel thing. But that's just what you have to optimize for.

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Aaron: Yeah, absolutely.

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Evan: I think I was, I was looking at your LinkedIn and you, I think you called it for brands, a survival game at one point. I think you said brands don't really care about the 3PL and the things that care about their own survival. So, what do you think? I want to ask, what are some ways that you think that 3PO is going to get moved beyond that obvious top track value added services to not just win the survival game, but to actually flip that to like, how do you get ahead of survival?

Because I think that's what everyone wants to get to. You don't just want to be hitting your number, barely clawing and scratching. So how can I get ahead of it?

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Aaron: Yeah, I, I think number one, and I, and I'll say this again, be proactive. Don't wait for your customer to ask you for X, Y, Z. Be consistently auditing their fulfillment strategy and potentially highlighting vulnerabilities before, you know Highlight the problems when they're a four out of 10 on the pain scale and not when it's like a hair on fire type of problem you know, I think one of the easier ways to do this if you're a 3PL and I've talked about this before is Ordering the product from online and you get a lot of good detail like nuggets of information You get to see the address on the shipping label so you can like reverse engineer.

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Oh, maybe they're using XYZ provider You know, but if you're ordering you know, I just told you I got a new mic and the mic it's Amazon, mind you, but small box or small item and I'm very large box, right? If I ordered that from just like a mom and pop 3PL, that's a great way for you as a seller to add immediate value because there's all this void.

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Like in the box that is just empty and more times than not, they're probably being charged for dimensional weight. Or rather than me. The impact of dimensional weight is way too large, and not only that, but the probability that their order is getting thrown around in a box and, you know, getting sorted at multiple different sort centers is really high and the likelihood that it's going to get damaged is also high.

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So that's what I mean by being proactive. You're always auditing their fulfillment system and like never resting on your laurels. And then you know, something that we implemented in the sales cycle was, you know, always talking about being the brand safety net. When you are not afraid to say that mistakes are going to happen because they will.

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Someone that like shies away and says, Oh, we don't make mistakes. I mean, that's a huge red flag to me, but owning up and taking accountability before they even become a customer, say, Hey, we're going to be your safety net. Mistakes happen. Here's how we're going to mitigate a lot of those mistakes, whether that's through, you know, contingency planning you know, actual contractual language that you can put in.

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Hey, if we are below X percent SLA, we'll give you a credit, you know, towards next month, next week, what have you. You can get creative. But I think it's knowing that if and when mistakes happen, that you are having your say. Brands best interest in mind and that is putting your money where your mouth is I think oftentimes So those are the B I think the the two ones that brands and 3PL should you know spend a good amount of time on.

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Evan: So on the, I want to go back to the whole big box, little product that happens a lot. Is that. And I think it's a combination of a lot of things, but is that typically a WMS issue? Is that the person packing it was just in such a hurry to hit their number that they're just grabbing the nearest box to them? Is it they just don't care, so they're grabbing the nearest box? In your mind, where does that usually happen and how can companies kind of get ahead of that breakdown?

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Aaron: Yeah, great question. I think that probably is more times than not has to do with just tribal knowledge on, on the warehouse floor. I think a lot of that can be solved by packing, you know, box logic that is usually lays within the warehouse management system, right? And so you're taking a lot of that guesswork out.

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But even when you get to the package, like you're at the, you're at the, pack station and you're trying to put the items in there, The problem even sometimes lies much further upstream. And what I mean by that is the data that is received when you're receiving the inventory and for the first time like the dims and the weights are incorrect.

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And so that then is like a cascading negative effect until you get to the to the pack station when you're putting a six by six by six item in a 20 cubit box, right? I'm making an extreme example. My point is that I think before tech forward WMSs came out, there wasn't a whole lot of like box selection algorithms that were implemented.

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And with the introduction of that, it's helped eliminate a lot of errors and eliminate a lot of waste too on the corrugate side. And so I think those two things are really impactful for, for a brand when you're, when you're looking at a 3PL, what kind of WMS do they use, right? How, what checks and balances do you have in place to ensure that sure, maybe one or two orders get placed in the wrong box because of some human error, but how are you reducing the human error in that as much as you can without necessarily sacrificing for, you know, speed of, you know, the orders getting.

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Evan: Yeah, I know, I joked that the technological 3PL was kind of a buzzword that everyone throws around, but it is true, right? You want a 3PL who. Use this technology correctly, smartly to like enable the strategy. So I know one track, I'm not going to dive into the whole sales pitch for one track, but like, we're big on visibility.

So we want you to actually see the problems so you can then fix the problems. I think that's really big. For a 3PL to whether you use one track or not, but it's like, we can now show you things that are happening in the warehouse and how we're fixing it proactively, or we can prove to you, this OSD issue was not a warehouse thing.

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And maybe it's a transportation thing, or it was a, this process is incorrect. And I think that's a really big selling feature for a 3PL is. The ability to go to someone and say, like, here's what's actually happening. Here's how we're going to partner together to fix it. And technology is a big, big piece of that.

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Whether it's your WMS and dive into that data, whether it's one track of diving into that data, whether it's whoever and diving into data, but it's the, you know, getting to that data to that, the point, but, you know, Figuring out a way to unlock that I think is a big selling feature for 3PLs if done correctly and not just blanket statement, we're a technologically advanced 3PL because that doesn't mean a lot to anyone in practice.

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Aaron: I mean, it's the most like overused buzzword of the last decade. But no, I mean, if you make the, if you make good use, that's. That's what I meant earlier about just being open and transparent right. If you know where to locate this data and you're able to course correct in real time, like that's a great opportunity for the 3PL on their weekly stand ups with the brand or on a quarterly business review with the brand. Where they're looking at ok, like you know, you have like a traffic light document, green go, yellow, eh, red not so good. This is a great opportunity for you to really dig in and learn. And look at some, you know, do root cause analyses and understand really where did we miss the mark because you're never going to be hitting 100 percent on everything that's just unrealistic.

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And it just gives you a good opportunity to reflect on your own strategy internally which makes for just a better conversation with the brand. And I think the overwhelming majority of brands would appreciate that level of, you know, granular detail. You know, seeing if there's any one specific detail that might be a symptom of just something larger that's going on.

And just the, the sheer ability to have that nuanced conversation, I really think shows when we talk about that trust level, that that is what brands are, are seeking. And you really only hear about, sometimes you only hear about that when it's too late, when they're putting in their churn notice or like they're putting in their exit order, right?

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And then you're. from the through failure, like scratching your head, it's like, where did we go wrong? But there were probably a dozen or so opportunities before that point to where you could have done some soul searching and really understood, hey, where can we, you know, where can we be better?

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Evan: What advice would you give to a 3PL who's maybe gearing up for the, the end of year review or a QBR? Like what are your, your golden rules of the, the perfect QBR when it comes to working with a brand?

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Aaron: That's a good question. I would say is cost and service and response time, are they within your expectations, right? The expectations that we. signed on contractually and had talked about ad nauseum before you became a client, did expectation meet reality? Right? You can get, you can get under, like, in the weeds about, like, things, which is good, like I just alluded to, but, like, sometimes you You get too into the weeds and you just have like take a step back like are we Being there for you and you're most like this, you know This week is you know, the next two weeks are the biggest for many e-commerce brands.

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Like this is when Brands really need their 3pl to step up and How are you stepping up, you know for your brands? You know when rubber hits the road, it's time, you know So all the changes that you could have implemented this year, how was it gonna positively impact that brand's experience. And then I think having a four excuse me, a future forward, like looking into the next 12 to 24 months, what is the 3PL doing from an operations or a technological technological standpoint that is going to just improve the experience overall?​ Those, that would be where I would also spend a little bit of the time within the QBR or the annual business review. What's next? 

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Evan: Yeah, no, it was interesting though, because I think. What I'm kind of hearing there is a lot of these issues can be solved if you do the legwork way before they even become a customer, like on the discovery and onboarding side, I think if you do the legwork there, set the right expectations. figure out the right communication structure, figure out what matters to them.

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It makes the QBRs easy because it's just, to your point, did we deliver what we talked about eight months ago? If yes, check mark, we're all happy. If no, here's what we're going to do to fix it. Whereas if you don't do the legwork at the beginning, you kind of just become Trying to find golden nuggets in the mountain of spreadsheet data, which is a losing battle because you're spending hours and hours of time trying to find how you won as opposed to level setting on how are we going to help you win? Did we do it? Yes or no? I think that's just super important to get it right from the very beginning. Don't leave it till the QPR.

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Aaron: Yeah. And I think as someone who has made a fair share, I'm coming on this podcast saying, Oh, all the things that you should do. I've made a ton of mistakes in my sales career. And I think it's just through experience where I've learned. And I think one of the biggest things that had helped me in my time, you know, at ship barbers, CH Robinson is, is really getting aligned with operations.

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I think it just, you know teams are siloed just naturally, like, right. And I think once you bridge that communication gap internally, and understand that you're all on the same team, just doing what's best for the brand. I think that's really, once you like cross department lines and really getting into the weeds, because departments have different incentives and they kind of buttheads sometimes, but at the end of the day we have to do what's best for the customer. And that means at least from a sales perspective, right? Like understanding the capacity at the warehouse. Are there any issues with the carriers going on? Like things that should be top of mind for you when you're having those discussions with brands.

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And then I think from the sales perspective, it's, it's getting accurate data so that you as a 3PL seller, you can. quote that, you know, the job out properly. There were plenty of times where, you know, we brought on a brand or, or I brought on a brand, but they you know, they said they were going to do X, but in reality they did Y. And I think that was my fault at the end of the day because I didn't work with operations in the forefront enough or I didn't You know, work with their teams, operating and marketing team. You know, they dropped a thousand orders when they were only projecting to do 400, right?

 

And there's this huge influx. So there's a lot of things that can be solved with more timely and proactive, you know, reach out especially during Q4, but all points throughout the year.

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Evan: All right. So to sum things up, what are kind of your, your do's and don'ts for 3PLs to, to stand out, offer great service, nail the partnership? What is, what is your list of must haves, do's, don'ts, golden rules, whatever you want to call them, but what does that list look like?

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Aaron: Sure. We'll keep it positive. Do take ownership and accountability. Simplify what is seemingly complex and think of the relationship as if they're going to be with you for five years. Because more times than not in that year one, you're probably not going to be all too profitable on them. So be thinking, have a much more stretched out vision. Don't kind of just regurgitate a lot of the things, but don't over promise for the sake of the business. Do not. Ignore feedback, right? Like all feedback is a gift. That's one of, one of my sales leaders once told me all feedback is a gift, good, bad, ugly, and it's an opportunity for you to learn and grow.

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And don't necessarily make the metrics seem good when in reality they may not be. You know, explain the numbers. Don't just jump into like a spreadsheet. Oh, we hit 99 percent on time SLA for fulfillment. Like, really just understand the impact that it's going, you know, go beyond the numbers is what I'm trying to say. So I think those three do and don'ts are applicable to, to most, if not all three appeals.

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Evan: People, people can smell bullshit from a mile away. So, you know, don't, don't try and sugarcoat things if you didn't hit them, hit the mark. Say why, but then say, here's why we didn't hit the mark. Here's what we're doing in the future. I think that goes. It goes way further than if someone tries to say, you know, you know, intuitively when your business didn't do well, but then the person you're working with is saying, but look at this, look at this other thing in this corner that we did really well for you. Just, you know, stay away from that conversation.

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Aaron: BS. It's really easy. And in this relationship. Every department is like important. I'm not, every part of the brands, you know, the marketing is super important. But you realize that as the fulfillment provider, you are often like the last step, a very important last step to the customer receiving their order.

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There should, there should be a ton of pride and accountability that, that comes with that, and it's not just like picking and, and packing, you orders. It's really nice. Someone who's been on the floor many a times to fulfill my own client's orders. You know, I, I was probably really bad at getting orders out really fast because I was so I was so focused on making sure that the orders were packed with enough, you know, packing paper and just cushioned properly so that when I knew they eventually go down a sortation belt at, at a parcel sort center, they They'll get thrown around like a ragdoll.

So, I think it's not forgetting the little things, and just remembering at the end of the day, the fulfillment provider is that last stop, and you make sure that you're taking that very seriously.

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Evan: I think you bring up something, a pretty interesting thing there because product gets delivered damage, not in the perfect condition. It's hurting both the brand, their bottom line. It's also hurting you as a three PLS, like image, right? Your relationship with that brand. So I think it's super important, especially as we're getting into a black Friday, cyber Monday, right?

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Everyone's flying around like crazy, trying to get stuff out the door. So what, when it comes to that, the shipping parcel, shipping trust side of things, what advice or tips or just guidelines would you give to a brand and a three PL to, to keep customers happy coming back for more Make sure things are high quality and that you're not just hitting it one time, but you're, you're playing the long game there.

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Aaron: Make sure that you have a diversified carrier portfolio. Similar to financial investment, you probably want to put all of your investments in a single stock. Similarly, you should not do that with your parcel carriers. You should have a broad diversification of carriers that are, you know, national, regional and maybe even some gig economy, you know, types of drivers too that allow you to hit on the, you know, each have their own value propositions, right? Some can do 100 percent nationwide coverage while others may not have like, you know, certain parcel surcharges. So I think it's about finding that balance and making sure that not only do you have the carriers but the right tech stack to implement the execution of said carriers. And there's a number of different, you know Providers that live within the TMS or outside the TMS that are helping, you know, brands execute on that very, very important, you know, last mile

strategy. 

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Evan: When you hear me say the warehouse of the future, what does that actually look like or mean to you? Because I think everyone has a very different perception on the warehouse of the future. We talk about it. Technology is AI, robotics, huge buzzword. So what does it actually mean to you when you like think about five, 10, 15 years down the line?

Like what is the warehouse of the future look like?

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Aaron: Everyone's on hoverboards and I'm kidding. They might be, I just like back to the future, so that's what came to mind. I think there will be a higher, in all seriousness, I think there will be higher adoption towards AI and robotics. I think for like the last five years, like robotics has just been a nice niche selling tool for a lot of 3PLs.

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But that partnership that just came with FedEx and Nimble. The 3PL provider. I think, I mean, that's, that was a pretty large investment by FedEx in a, you know, autonomous type of 3PL. And I just don't think there's been high adoption. And I'm not going to even pretend as if I, I'm an expert in this, but I think it's, it's seemingly just very expensive.

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And so adoption has been relatively low for the last, you know, five to 10 years. But I, I think there will be more gradual adoption of robotics and the ease. Of robotics into the warehouse. But I think there's, there's a ton of challenges that come inherently just with robotics and how are, how is that new system going to implement with the, with the old systems?

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How are people going to interact with it? Is, I think rightfully so people are scared of their jobs being replaced. I think that's a very valid fear. And so how can we. Maybe not remove jobs, but help augment and help assist people with their jobs. I think that's what's going to be. And then, you know, I live out here in the, in the Chicago burbs and about a, about a year and a half ago, Amazon built this like micro fulfillment center that was close to me.

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And I used to get prime things within two days, but now things are being able to deliver to my doorstep. In. Like four hours and I, I think what you'll probably see are more 3PLs, you know, investing in more like hyperlocal hubs And, and being able to predict demand. So kind of like not just doing fulfillment, but having a, some bit of order management capability or like predictive order management capability to say, Hey, you should be holding your A and B SKUs here, pulling those forward and housing those.

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And maybe your C, D, E, F SKUs, you can hold in a more centralized, you know, location because I mean, I like getting my order in, in four hours. It was pretty cool. And I think there is definitely a difference in. Expectations, right? Like when I go into a brand's website, at least for me, I'll speak for myself, I'm okay with that getting there.

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And let's say three to four business days, would it be nice if we got here like next business day? Sure. But more times than not, it doesn't. But I just think that, and it's such a tired statement that everyone says, but Amazon just keeps pushing the envelope. They really do. And do brands need to mirror them one for one?

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No, but I do think you'll see more 3PLs investing in, you know, micro fulfillment centers and allowing brands to say, Hey, these are your fast moving SKUs, market the hell out of them and send us, you don't need to send us eight months worth of stock, right? We want, One turn of inventory. If that turn is going to last three weeks, so be it.

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So I think you're going to see more of that. So I think robotics and more hyper local type of, you know, warehousing. That's what I think if we were to flash forward to, you know, late 20 Q4 2025, I think you'll see people maybe looking at that more seriously. And then maybe in 2035, you'll see the actual implementation and more widespread

adoption of those two.

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Evan: Yeah, I also think what you said about predictive analytics is super interesting. So I think that applies everywhere, right? It's how can you get more predictive about picking and packing and, you know, tracing key mapping around the warehouse? How can you get more predictive about? Well, in this season, you actually only need this much equipment or if we make this change, you can then downsize your fleet by X or seasonal work.

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There's just so many areas where I think Getting data, like we talked about earlier, out of spreadsheets, out of maybe needing to go to your engineering department's hands to make a decision, just like in the hands of the people. I think that's, that's kind of what the warehouse, the future is moving toward.

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It's just a matter of cracking that code, right? That's a, it's a big nut to crack there of actually getting data and making it where an engineer doesn't need it. So I think that's another key piece of it too. 

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Aaron: Yeah. And, and I think for me, you know, even in like my sales, even the last three years for me of sales, sales has gotten significantly harder, I think over the last two or three years. But a lot of the stuff that I'll do from like a prospecting standpoint, I'm, I'm leveraging. AI, not to write emails, but to just like help do like account planning and like understanding, Hey, if I'm going out to a public company and they have a, a 10 K report online, instead of me trying to read through this thing, you can oftentimes download them a PDF. You can have chat GPT, give you like a synopsis, you know, and I think that's incredibly valuable. So it's about, I think leveraging the best that can come, you know, from AI and I'm no expert in it by, by far, but it's helped me do a lot of like the day to day, what I would normally think even three years ago, mundane, time consuming tasks, and just making that easier for me to do things that I just enjoy more, which is connecting with customers and just having conversations with them. Once took me maybe 45 minutes to do an account plan can now take like 20 minutes.

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You know, I think that's valuable, especially at scale when you're trying to work on, you know, let's call it like 20 strategic accounts. I mean. That's a lot of time that you can get back in your, you know, in your day as a seller, but we'll see, you know, we, we will see everyone and their mothers create an AI company now.

 

So it's getting hard to, differentiate, you know, between everyone, but, fulfillment is such an old school, you know, warehousing and distribution and shipping is such an old school. Need, you know, right for disruption. Everyone talks about it. So it's been really cool just to see what types of AI are coming, you know, not only in the direct consumer fulfillment side, but just TMS, WMS, all of the interlinked parts of this ecosystem. It's been really cool to see the advancements over the years.

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Evan: Yeah, definitely a lot of, a lot of changes coming. I think it all goes back to basics, right? You got to figure out, don't get distracted by the shiny tool, the flashy marketing, the slick sales guy. It's like, what is actually, what is your strategy? And then go find tech to make that strategy possible and faster and more effective. And that's, that's what it comes down to in pretty much every area of business. And AI is just another, you know, A piece of that right?

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Aaron: Absolutely.

 

Evan: Well, hey Aaron, I know we are right at time here. So I appreciate you coming on where can listeners find you if they want to they want to hear more from you get in touch any of that good stuff

 

Aaron: Well Evan, thank you for having me on. It's been great. You know, what are we at, 45 minutes or so? So it's been good getting to, you know, have a, a good water cooler type of conversation. That's all things, you know, business. But if you are interested in learning more, you can always connect with me on LinkedIn. I post seven days a week and everything that has to do with e commerce logistics or you can drop me an email at supplychain@aaronhodes.com. So Evan, thanks again for having me. It was really great meeting you.

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Evan: That was another great episode in the books. I learned a ton. I know you guys will too. Here are my top three takeaways.

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Number one. As a 3PL, focus on transparency and proactivity to win the brand relationship. Always own up to your wins, your mistakes, and come to the table early with solutions. You'd be amazed at how many problems can be solved just by overcommunicating early and often.

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Number two. Be the brand safety net. Most brands only care about their survival. As a 3PL, you have to bring visibility to potential risks and show how you can help solve them to stand out from the crowd.

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And number three, balance longterm vision with short term execution. You obviously need to help them get orders out the door faster, safer, and in better condition, but to be a real partner, you need to bring a longterm outlook to how you can help them grow and help their business win.

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