According to independent expert estimates, the 3PL software market will grow up to $1.5 billion by 2025 and reach a record $2.8 billion by 2035, with a CAGR of 6.4%. This is not surprising given the growing need for companies to ensure end-to-end automation of warehouse, logistics, and order management.
At the same time, the role of integrations in ensuring this automation has already gone beyond ordinary data exchange. Businesses require supply chains that can respond to changes in real time, which is why 3PL integration with eCommerce and ERP systems has become a must-have. Below, we’ll answer the question: “How does 3PL integration work?” in more detail.
What Is 3PL Integration?
So, what is 3PL integration? In a nutshell, it involves the technical unification of e-commerce platforms or ERP systems with the services of third-party logistics operators. In essence, it creates a bridge between online sales, inventory management, and order processing solutions, which means it should cover the automatic data exchange on orders, delivery statuses, stocks, returns, and reporting. Moreover, such integrations go beyond the transfer of information in real time – they must be tightly connected with the business logic so that operators can manage supply chains from a single panel.
Why are 3PL integrations so necessary? First of all, when eCommerce, ERP, and 3PL systems are disparate, orders are received with delays, and data on the availability of goods may be out of date. Moreover, warehouse and delivery department workers may have a work schedule that doesn’t correspond to the current workload, which ultimately leads to missed deadlines and an increase in manual operations. For customers, this worsens the quality of service and motivates them to look for your competitors that are more comfortable to interact with.
Why Businesses Need Seamless 3PL Integrations
Ensuring seamless 3PL integration provides an opportunity to form a single ecosystem from disparate processes, because when logistics, eCommerce, and ERP work synchronously, the company gains control over the entire cycle of interaction with its customers. So, let's consider these advantages in more detail:
- Faster order fulfillment. The speed of order processing is directly dependent on how quickly the information gets to the warehouse and then to the courier. In turn, seamlessness ensures instant data transfer, without delays caused by manual data input or file transfer.
- Real-time inventory synchronization. In modern business realities, companies cannot afford to display to their customers an irrelevant number of goods in the stock, and here, real-time synchronization will come to the rescue, eliminating the likelihood of returns and helping to optimize warehouse stocks.
- Reduced manual effort and costs. Data exchange automation reduces the amount of manual work of employees; in particular, now, they don’t have to enter order data into the ERP manually and update their statuses. This provokes a reduction in the number of human errors and other associated costs.
If you realize that your IT infrastructure needs seamless 3PL integration, feel free to contact us, and we’ll implement it in the most cost-efficient way.
Main Types of 3PL Integrations
Depending on the business model you follow and the specifics of your IT infrastructure, you can choose either ready-made eCommerce connectors or launch a long-term project for integration with ERP systems via custom APIs and middleware.
In particular, if we’re talking about 3PL integration with e-commerce platforms like Shopify, Magento, or WooCommerce, it can solve problems related to synchronization of orders and inventory. Moreover, Shopify and WooCommerce provide ready-made connectors (while Magento usually requires custom integration with fine-tuning).
As for 3PL integration with SAP, NetSuite, Microsoft Dynamics, and other ERP systems, which are involved not only in sales management but also in finance, warehouse, and procurement, it’s much more complex since it has to cover the full cycle, from order planning to compiling quarterly reports. An additional complication is that each ERP has its own architecture and requires adaptation to the sophisticated business processes of a particular business.
Finally, it’s worth noting that not all companies (especially those with international logistics) use standard platforms – in such cases, API integrations or third-party logistics integration software (middleware) have to be developed from scratch.
Technical Approaches to 3PL Integration
From a technical point of view, there are several approaches to integration, and the choice in favor of one or another depends not only on the budget and the required speed of implementation, but also on the requirements for system flexibility.
For example, eCommerce platforms with 3PL support can boast pre-built connectors that ensure the fastest way for end-to-end automation. Also, this is a budget-friendly option, which, however, carries a number of limitations, since not all processes can be automated, and scaling often becomes one of the most common 3PL integration challenges.
When it comes to building middleware platforms, they are more convenient since they provide integration of several systems at once and make it possible to manage data centrally, which is sometimes the only viable option for companies with a complex IT infrastructure. At the same time, an additional layer increases the complexity of support and can often reduce the speed of data transfer.
It also makes sense to consider custom-built integrations – they will allow you to tailor the solution to your individual needs, taking into account the non-standard processes that occur in your company as well as its unique business rules. However, this one remains the most expensive and time-consuming option.
API vs EDI in 3PL Integration
Today, companies have to solve the dilemma between API and EDI, and here, everything depends on their IT infrastructure’s maturity and the requirements for data transfer speed. Both approaches are still relevant today, but they solve problems differently.
Thus, a 3PL API integration is the most modern standard, providing fast data exchange, high flexibility, and scalability. It allows you to integrate almost any process, from synchronization of stocks to return management.
At the same time, an EDI integration for 3PL is considered a legacy approach. However, it’s still used in logistics because it’s well-suited for standardized processes. Of course, it’s not as flexible and fast as an API, but it still has a place in the solutions of smaller players who don’t want to switch to newer systems and radically transform the IT infrastructure that has been established for years.
Benefits of Custom 3PL Integrations
Custom integrations give businesses much more than just automation, since they allow you to build unique processes.
Indeed, each business has its own specifics: from the warehousing structure to the requirements for document flow, so custom integration can become the only solution that will allow you to take these nuances into account and build processes so that they really work for efficiency, and don’t force you to adjust your business to the ready-made solution’s framework.
Also, when a company enters new markets or increases the volume of orders, custom integration scales with it, without the need to rebuild the system from scratch.
Finally, it’s worth noting that companies that invest in a custom 3PL fulfillment integration always gain another advantage, as their operating model adapts faster than their competitors.
Case Example: Shopify or NetSuite Integration
If we talk about our experience, we were approached by a client representing a cargo transportation company in the USA, whose employees had to perform a huge amount of manual work every day, from cargo dispatching to communication with drivers.
All these tasks suffered from a lack of synchronization, while ready-made TMSes turned out to be insufficiently flexible for the client’s company. In this regard, the client decided to hire us to develop a custom TMS system with a number of 3PL integrations.
As a result, the number of manual operations decreased several times, the accuracy of working with data increased, and the workload on employees was reduced significantly. All this led to the opening of new business horizons for the client’s company, and we still contribute to this in every possible way, scaling and updating the system’s functionality on an ongoing basis. You can learn more about this case here.
Choosing a Development Partner for 3PL Integration
The right choice of a technical partner for 3PL integration affects not only the speed of launching an automated system, but also the sustainability of the entire operating model. Companies often underestimate this aspect due to a lack of understanding that integration is a fundamental part of their business processes. That’s why your future contractor must be a real expert who understands your industry specifics and is ready to support your business in the long term.
It’s also important to note that third-party logistics integration is rarely standard due to the fact that each company has its own warehousing models, supply chains, and document flow requirements. In turn, a technical partner with domain expertise knows these nuances and will be able to design a system so that it really works to increase your business’s ROI.
The next crucial aspect is the ability of your custom 3PL integration development partner to provide regular, long-term support, that is, not just for fixing bugs, but for the constant adaptation of your solution to new market conditions and your individual business goals. Otherwise, even a successful launch in a year or two will begin to slow down your company’s growth.
If you are about to hire developers for 3PL integrations, write or call us, and we’ll discuss our further cooperation.
Conclusion
To sum up, seamless 3PL integration solutions with eCommerce and ERP systems are the foundation of modern logistics, as they guarantee speed and scalability, and, therefore, provide a strong competitive advantage. This approach also reduces overhead costs, speeds up order processing, and improves customer experience – so if you are looking for a technical partner with practical experience in implementing custom integrations for eCommerce and ERP, you can turn to WEZOM for this. We’ll help you evaluate your current processes and offer a solution that will strengthen your USP.
FAQ
What does 3PL integration mean for e-commerce businesses?
For e-commerce, a 3PL integration opens up opportunities for end-to-end synchronization and automation of standard processes for this sector, from order placement to delivery to the customer. This minimizes the number of errors, speeds up order processing, and increases customer loyalty.
How long does it take to integrate 3PL with Shopify or NetSuite?
The time frame depends on the project’s complexity – for example, a Shopify 3PL integration via ready-made connectors can take only a few weeks, while a SAP 3PL integration or NetSuite 3PL integration, if specific processes need to be taken into account, can require months.
Which is better for 3PL integration: API or EDI?
3PL API is a more modern and flexible solution that also allows scaling, while 3PL EDI integration is considered the optimal choice for those who work with large logistics operators and traditional document flow formats. A hybrid approach also has its place.
Can 3PL be integrated with multiple systems at once?
Yes, this is a standard scenario for a business that operates on several platforms (in particular, we’re talking about international projects and businesses with omnichannel sales). For example, we do this through middleware or custom APIs.
What are the costs of custom 3PL integration solutions?
The cost of 3PL integration services depends on the scale and complexity of the project, so if you need an accurate budget calculation, it’s better to contact our team individually.
