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What is 5PL and how DHL can help businesses with 5PL logistics solutions?

E-commerce · 4 min read

What is 5PL and how DHL can help businesses with 5PL logistics solutions?

The pandemic's beginning put unprecedented strains on global supply networks. Things like shortages of shipping containers, personnel, and raw materials, as well as tighter border controls and worldwide inflation, wreaked havoc on global trade. Last month, the US Secretary of Commerce, Gina Raimondo cautioned that supply chains in the United States will take "a number of months" to stabilise in the next year, with "continuous but slow progress. Similar projections have been made for markets all around the world.

Enterprises, particularly e-commerce businesses, will need to maintain agile and adaptable supply chains in order to react to market disruptions in real-time. This is where a 5PL logistics partner can be extremely beneficial.

What exactly is a 5PL (Fifth-Party Logistics)?

A 5PL partner takes care of a client's logistical demands by first determining the client's particular needs, then developing, implementing and overseeing the entire solution.

The 5PL model has emerged to satisfy the demands as supply chains are becoming more complicated. 5PL can easily manage other suppliers across the supply chain and employ cutting-edge technology to ensure that every touchpoint is optimised. In a nutshell, 5PL is a one-stop-shop for all logistics needs, ensuring seamless operations.

As the supply chains continue to face extreme disruptions in 2022, the role of 5PL will become more critical than ever. Therefore, if E-commerce businesses wish to remain competitive, they must have effective inventory management, delivery operations and order fulfilment. This is where outsourcing logistics to a 5PL partner, such as DHL, can be a smart option for e-commerce firms.

How will DHL help businesses with 5PL logistics solutions?

DHL, as a 5PL partner, can source and manage a company’s services while simultaneously negotiating the best terms. DHL's team of experts uses technology like Warehouse Management Systems, Order Management Systems, robotics, and artificial intelligence to drive extremely efficient networks, ensuring productivity at every step of the supply chain.

What can DHL offer for 5PL logistics solutions?

1. Elastic logistics and AI

Elastic logistics is driven by AI and analytics that help in predicting forthcoming surges in consumer demand and determining where the supply chain needs to be altered to efficiently manage it. In the warehouse, artificial intelligence (AI) automates inventory procedures, picking, packaging and moving shipments faster and lowering turnaround times, allowing e-commerce enterprises to hide items from customers' view if stock levels fall too low. In essence, elastic logistics, allows organisations to make supply-driven decisions, which saves money and minimises waste throughout the supply chain.

2. Use of robotics and automation

The adoption of autonomous and automated robotic systems in warehouses will continue to rise, saving organisations both time and money. In fact, by 2025, the global autonomous warehouse robotics industry is predicted to nearly double in size, reaching $27.2 billion.

Automated storage and retrieval solutions can be used in warehouses to identify, pick, and move merchandise around quickly in e-commerce supply chains. This will help businesses fulfill tight delivery dates for customers. Earlier this year, DHL stated that the company plans to hire 2,000 more warehouse robots by 2022 to meet increased e-commerce needs. The logistics company has teamed up with Locus Robotics to incorporate autonomous picking robots that utilise machine vision to pick and put things strategically on a line.

3. Sustainability

With climate change as the most pressing issue today, not only businesses but also consumers are increasingly expecting brands to be ecologically conscious. Be it sustainable packaging or emissions, businesses are recognising the financial benefits of minimising waste throughout their supply chains.

According to Boston Consulting Group, transportation is one of the greatest carbon emitters in the e-commerce supply chain, accounting for 17% of worldwide greenhouse gas emissions. To combat this, the use of green automobiles is becoming more common. DHL Express aims to electrify 60% of its last-mile deliveries by 2030, with 80,000 electric cars on the road, as part of a company-wide goal to decrease total logistics emissions to zero by 2050. It also made history in the aviation industry by purchasing 12 fully electric Alice e-Cargo planes from aircraft maker Eviation in August 2021.

The 5PL model's capabilities must expand in tandem with the needs and demands of the e-commerce sector. For this reason, DHL has established an Innovation Center to combine cutting-edge technologies into its logistics services, allowing customers to stay ahead of the competition.

Contact our customer service professionals today for more information and ideas on how to keep your company ahead of current trends.

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