How The Right 3PL Will Make You More Efficient

by Jodi Abrams

A 3PL, or third party logistics company can help you focus on your core business, and not on becoming a logistics expert at the same time. With hundreds to choose from, there are many factors that will go into your decision such as range of offerings, scalability, location, reverse logistics capabilities and the list goes on. This post endeavours to look at the different EDI capabilities and how to make sure you are making a choice that gives you the best options for a truly automated logistics process.


The possible EDI capabilities that a 3PL could support is vast, but there are nuances you’ll want to look out for that could either help streamline or put a roadblock on your automation. Related to EDI and customer compliance are labels which are often required to be applied at the carton or pallet level. It’s important to understand their capabilities here because it could cost you a lot of extra time if you need to generate these yourself. Let’s dive into some of the finer details.


In ANSI X12 this would typically be a 940, or occasionally an 856. With EDIFACT, it’s the DESADV transaction. It’s pretty straightforward: the purpose of this is to tell your 3PL what to ship, to whom and when. Any 3PL capable of EDI will take this transaction and use it to send your product. However when you look a little deeper, there are some specific scenarios you’ll want to think about and if important to you, ask your 3PL if they can support them. For example, needing to remove an item from the order before it has shipped by the 3PL. This could be due to a number of reasons such as a customer changing their mind, or you needing to reallocate the stock. Some 3PL’s will need you to manually notify them, have them cancel the delivery and then you delete the delivery in SAP and reissue a new one (minus the affected line) and send it to them – lots of extra steps. Or, some have the capabilities to accept a 940 to modify a delivery already in their system. In addition to removing a line, other scenarios can cause the need to change what was on the original shipping request, such as a date change, carrier change or quantity change. Perhaps you need to delete the delivery altogether in SAP because the customer cancelled their order. Can you send an EDI transaction to the 3PL notifying them of this deletion? Or does this require manual intervention.


Many customers require a specific label to be at the carton and/or pallet level with their shipments. Usually with tracking information, and an SSCC18 barcode that is also sent on your advance ship notice to them (EDI 856). Can the 3PL you plan to work with handle printing these labels and sending back the necessary information to you on an EDI 945 so that you can send out the ASN accordingly to your customer and meet all of their compliance requirements? Or are you responsible for generating and sending over a PDF document with all of the labels? This can provide its own complexities with respect to packing at the 3PL and ensuring the right label goes on the right box.


The best way to stay in sync with your 3PL is by receiving automated inventory levels daily in the form of an X12 846 or an EDIFACT INVRPT. Not all 3PLs have this capability, and without it – it turns into a very manual task to manage inventory and keep it in sync with your SAP system.


The above are just a few things to look out for when choosing a 3PL that will also be able to help you automate and scale. There are many small factors to consider in this decision on the EDI side. The best thing to do is to engage an EDI expert to help you with these discussions, and ensure you are making an informed decision that is best for your company.

About the author: Jodi Abrams

Jodi is an expert in SAP and eCommerce integration, and is Vice President of Applications for CONTAX.