Leo Rodriguez: 0:00

You can bend the rules here and there once in a while, but constantly letting things go because I'm non-compliant. It usually comes down to really, it's kind of like a workflow that you're breaking that's non-compliant. You can do that once or twice, but you can't make that the norm.

Tom Raftery: 0:22

So in fulfilment, the problem usually isn't the one big failure. It's the small exception you allowed yesterday becoming the broken workflow everyone works around tomorrow. Good morning, good afternoon, or good evening, wherever you are in the world. Welcome to episode 129 of Resilient Supply Chain Stories and strategies that Keep business moving. I'm your host, Tom Raftery. Today I'm joined by Leo Rodriguez, VP at River Plate, Inc. A third party logistics provider in Southern California, handling e-commerce, retail, warehousing, distribution, freight logistics, kitting and assembly. Leo brings the operator's view. The bit brands often don't see until the chargebacks arrive or the customer experience slips, or the warehouse starts living on workarounds and crossed fingers. In this conversation, we get into why fulfilment resilience depends less on heroic firefighting and more on process discipline, clean data, early 3PL involvement, and making sure the physical operation and the system reality actually match. Interestingly, sometimes the margin leak isn't a dramatic supply chain disruption. It's a box that fits beautifully in a container, but is overweight or oversized for the channel it eventually has to serve. Let's dive in. Leo, welcome to the podcast. Would you like to introduce yourself?

Leo Rodriguez: 1:53

Yes. Hello everyone. Yeah. My name is Leo Rodriguez. I'm the VP here at River Plate Inc. We're a 3PL in Southern California, so hello again.

Tom Raftery: 2:04

Okay, Leo, and how did you get into being VP at River Plate?

Leo Rodriguez: 2:10

Actually, I started about 17 going into my 17th year. Actually it was a family business. It was growing scaling quickly. My background coming outta college as a physical therapy. So I was in pre-physical therapy doing some aid and assistance work. Realised that the chatter amongst the family business was it was a lot of stress, a lot of growing pains to say the least. And I really, honestly, it came in as a more of like a summer job. The mother needed some loyal eyes. There was at that point, two or three different facilities. Probably totaling around. 40,000 square feet smaller, right? So, came in, I actually thoroughly enjoyed it. I really got the, the juices flowing. There was never a dull day. A lot of different challenges, but I liked it. So I just then put, anything I jump into, I put a hundred, 120% into it, right? So I went in, with the idea of first just to, help get things streamlined where I could, I'm very processes oriented. I, with a science background, right, it's, it gets a little analytical there, right? Took some classes and really just, hands on. I even worked, I worked in the operations in the pick and pack. I got forklift certified, did all that, and then worked my way up. I didn't just get a position just because I was the owner's son. So, and that, that's, it's come a long way. So here, 17 years later we're 138,000 square feet. Actually the city of Simi Valley, California providing omnichannel services. e-commerce, warehousing, distribution, freight logistics, kitting and assembly across e-commerce retail, so D2C and B2B business. So really it's, it's been a fun ride.

Tom Raftery: 3:46

Yeah. Fascinating. And does your day-to-day world look like now in logistics and fulfilment?

Leo Rodriguez: 3:51

Yeah, day-to-day I come in, we, we brief with management teams, right? Front office operations. We do the morning briefs and then we do an end of day brief. So in the morning briefs we talk about still 'cause. Things rapidly change in our environment. Right?

So what we talked about at 4: 4:04

00 PM on, a Monday, Tuesday, you might have a couple new things that popped up that are urgent or have changed. Right? So we brief with the operations managers we have our receiving an inbound team. We have our essentially what we call our pick and packer D2C team that handles a lot of the, each picking and all the channels that are. They're e-commerce channels, right? that are flowing through. And the, the CSMs, the account managers directly that they're interconnected, right? With the operations and making essentially is that jumping into our system, our warehouse management system and pulling out the reporting showing what are our hot rush items in terms of orders or inbounds, just to jump off in terms of priority. So that those are scheduled appropriately. And then yeah seeing how also if there's, movement that needs to be done in terms of, cross stock orders that are, we have carriers lined up since we do quite a bit of retail, the Targets, the Walmarts, the Amazon, the five belows, the worlds, making sure those loads and everything that was scheduled for the day, everything's tightened up. And it's it's ready to go. Yeah.

Tom Raftery: 5:06

And obviously fulfillment generally tends to look simple from the outside right up until it isn't. So what would you say are the earliest signs a fulfilment operation is starting to come apart?

Leo Rodriguez: 5:20

Yeah, there's so many different angles. We are at the mercy of everyone else in the supply chain. Everyone can have these forecasts, projections or what they would consider, well, even, we would consider, it's like, okay, these are scheduled events that are gonna happen every single day. I would say yes, maybe if I would take a guess, 80% of those scheduled events are going to occur at the time they're going to occur. 20% of those. It's not gonna happen. Something changes documentation maybe is not provided accurately from a third party. So we always try to prevent, right? And be proactive anywhere we can. If there is changes it was, did those changes actually flow through the proper channels? Right. Some of it is are you taking shortcuts? If you're taking shortcuts, you gotta be careful, right? Because everything flows. Everything that we do flows a lot through with our warehouse management system, our transportation management systems, we integrate with a lot of different order management systems and ERPs. So, any type of data flow that's interrupted or manoeuvred in a different way could be impactful at the end result. Our advanced ship notices are sent to retailers or inventory positions within the warehouse that you're, having to make a, you know, the order came in that was for, 15 pallets. Now they added 18 pallets and the carrier's there. So just physically going, okay, let's, let's go ahead and pull from these locations and prep the load making sure that on the backend, everything aligns because everything that's happening physically in the operation needs to happen virtually in your systems. They need to run in tandem, right? So in parallel.

Tom Raftery: 6:56

Sure. And where do then brands most often underestimate complexity when they add channels like direct to consumer D2C as you mentioned earlier, retail wholesale, Amazon?

Leo Rodriguez: 7:10

Yeah. What's really important for brands is that specific, especially when they're, they outsource their fulfilment logistics to a, third party logistics provider is get them involved early, like, really get, have these discovery calls. A lot of these, the 3PLs should have already a method to the madness, right? So they should already have essentially workflows process in place, have experience to where essentially it's almost treating it as like a checklist, right? Brands might seem that, okay, well this is just, you just do the integration and do a couple simple configurations and we're good to go. But a lot of it is, okay, well your package, maybe your package type or your, the way that your inventory sits within the warehouse. It's not efficient or it's not conducive to to really handle this specific channel, this specific, even e-commerce. This e-commerce might have additional value added services that you require to meet their compliance, to actually deliver to the customer. Example is some of them require specific information that needs to be as a return address on their packing lists. The little things like that to where, okay, well that needs to be coded in there. If that's coming in direct. If they want specific information that needs to be essentially a custom packing list and it's a requirement, then that needs to be obviously discussed before, but maybe the five other e-commerce plugins that they have, those marketplaces. They've never even come across that. They've never seen that. So big part of it is, is is sending over that compliance guideline or the, or the, vendor guideline. And I'm jumping over kind of more into the, the retail end, which is a whole nother world, right?'cause those, we, I would say that these branch always look at anytime you're bringing into a retail brand, minimum, I would say if you can six weeks. At least six weeks. Sometimes EDI just takes four to six weeks to connect and do the testing. Right. So, yeah, it's very important. Get the 3PL involved early. And essentially there needs to be a checklist of everything from,'cause there's the vendor setup part, supplier, vendor setup. But then there's, certain setups that obviously the 3PL have to do to make sure that that integration and testing's gonna work properly. Setting up ship points making sure that the ASNs are being processed or the, the EDI documents are flowing as a retailer expects 'em 'cause as you may know that chargebacks are significant and even more so, they're growing nowadays. These retailers and these marketplaces need efficiencies in the, in the world that they live in, right? So.

Tom Raftery: 9:34

Alright, So, would it be fair to say that the, the real failure points may be inbound, not outbound?

Leo Rodriguez: 9:40

Yeah, that's a great question, right, because it really starts with that inbound. I would say even starting at when it's like after like the R&D part of it, and then the development of how they're going to package their SKUs. What are their goals? Cause they, sometimes they think, well, we're starting as an e-commerce brand, right? Well, we're only doing e-commerce, but we have goals of going into retail. Now if you start a small scale, you're bringing in only a very, limited amount of inventory, handful of pallets. Well, okay, maybe you can, you'll cycle through those. But if you're bringing in containers worth, look at In discussion with your 3PL, they can essentially help you out. Like you, Hey, you know what you, yes, I get it. This is to cube out your product in a container for your inventory. Might make sense to put 50 units in a box and it's gonna fit really nicely, but in a lot of these retail programmes, or a lot marketplaces, you're oversized in terms of their max dimensions and you might be overweight. So now you're, go, you're gonna bring that in. Great. You're gonna bring it in. it's gonna be fine for e-commerce'cause they're gonna slot that in terms of probably each picking, right? Most likely, depending on the type of product. Or it could be sometimes, could be case picking, but if you're that retailer or a wholesaler, it's gonna buy in bulk by that pack. Well, sure you're going to, you're gonna be okay for some of them, but some. The other part of it is that you're gonna have to rework that. And then the, in our industry called value added services and they're going to the 3PL most likely have to do that production order, new cartons, and it's a whole nother layer of labour that gets very, very expensive. Another big part of it is on the inbound is item setups. Understanding that the 3PL is gonna need and any system.'cause you're, you're doing it on the supplier end. If it's a retail channel or a marketplace, they want to know most of the time, the net weights the net dimensions of the product. Then they want to know your inner impact dimensions and your master pack dimensions. That needs to be communicated accurately to the, the 3PL. They need to upload that into their systems. And making sure, because everything is, especially when it comes into routing that's all being pulled through the systems and a lot more 3PLs are not having to physically go and actually measure one by one. Right. Or, or measure at the time of when they're preparing the load, they already have that information in their palletization software or as well as their WMSs and maybe OMSs. But definitely passing over, making sure the package information on all of its different levels and big part of it there also is markings, carton markings, and carton labelling. Is that if you do have a product that is, you're gonna have it as distribute multi-channel, do direct to consumer and B2B. If you, get an assigned G10 already, your UPCs that is, it's extremely helpful. If not, most of these re big box retailers, they need those G10s markings on those boxes. If not, you're gonna do that labelling at the 3PL. Those POs are big, or that's an at expenditure. We've seen that a lot of times these manufacturers overseas are able to do it at a, at a cheaper price, right? Instead of then handling it here, and then you're kind of, you're rushing it, right? So when you could have, when you could have done it at the manufacturing stage is, usually you wanna make sure that you're looking at it as holistically as a whole, as it's like, get it ready for a multi-channel distribution pathway, right? So, that's a big part of it as well. So having those markings and labelings. And, and, sometimes, there's gonna be some retailers that are not gonna like certain markings on it. They don't want multiple barcodes. Sometimes you're gonna have to cover it up. We have some clients like, Hey, well these two channels do require it. This is gonna represent probably 70% of my business. Let's be compliant for those. If I have to rework some other ones or do side or, inter packs or different configurations for, 20 or 10%, then so be it. But don't do it for the 20% and then get stuck with 80%. Right. Especially when, when you're producing a lot of inventory. It seems like, we're constantly tripping away at them. Like, Hey, like this is, can be done. Look, I get it. We make money on these value added services, but that's not how we should work. We should like, we like to make money when you guys are making money and your margins are not compromised because when your total per card fee overhead should be a dollar 80. For all the services related to these retailers, now it's $2 and 15 cents that couldn't been fixed early on in the manufacturing stage. And then also when it's coming into our facility in the check-in and verification, those cart markings, the dimensions with everything is plugged in communicated properly is it's required and, and needed. It's vital.

Tom Raftery: 14:13

So if that's where things go wrong, the next obvious question is what separates the operators who stay calm from the ones who are constantly firefighting? So what are the basic controls that make an operation more predictable?

Leo Rodriguez: 14:28

Yeah, On the brand side again, I will repeat is in close communication with your 3PL sometimes they'll bring in your manufacturers in the loop, freight forwarders in the loops. A big part of this also, what did they integrate with? If they're using an ERP, are they using it effectively? Are they using the order management system effectively and the team members behind it? Right. That's a big part of it as well. There's gonna be obviously a bigger transition over the years that a lot of these, these systems can be immediately prompted to migrate or automate certain processes of repetition through the AI and eliminate a lot of loose ends that cause errors or problems. But a big part of it is the configurations and settings and understanding that if there's certain changes that are made. This is one, this is a big one that we see over and over again, and it's sometimes it's kind of like outta sight outta mind. There might be team members in a specific department that are working ITs, that are, okay, well this is a new update that's coming along from us. These retailers, you're seeing a lot more that this, these retailers are, updating their vendor guidelines or their systems but that translates all the way through the network down to when we all of a sudden go and, and maybe they'll do something today that does it, but a trigger or a configuration that's done in the backend of a system, a supplier system, that all of a sudden it, impacts the 3PL maybe two months later, right? Because now maybe we might not have a PO or something. So, making sure like, hey, just because an update you have, there's these updates that are popping up. It's making sure that if there's any sense to where that this it's gonna. affect or translate data through the network. Then make sure that your 3PL is aware that certain changes are being made. Big part of it there is also. being proactive on the, on the forecasting, right? Understanding that letting the 3PL be in communication and understanding that, that's that partnership, because it's the 3PL also has a lot of vital information and data. It's like, look, we can help you figure out, you have the systems available. I know sometimes it could be, it could be overwhelming. These businesses are working within now between four or 5, 6, 7 different platforms. Right. And if there's any turnover or the size of the company, it's, hard to be an expert at everything, but loop it. as you're looping in your CSM or the executives, maybe certain team members, executive special on big, big projects that, there's a simple dialogue to identify and using the reporting capabilities and data that the 3PL has is vital, critical 'cause it maybe they might be able to show something that you're not seeing that might impact their decision for, earlier on in the stages, right? So.

Tom Raftery: 17:08

And if you had to stabilise a messy fulfilment setup fast, where would you start?

Leo Rodriguez: 17:15

That's a really, really good question. It, it does happen sometimes. It's really just not being shy and, look transparently we have team members that are dealing directly with the brands day to day. They build relationships with them, right? They make sure that everything is, and I'm talking more on the front office team and the and even like the, as some of the management team that are dealing with the operations. They're the middle, they're the middle person between the brand and their team members and their third parties, they're part of the supply chain. And then obviously our operations. So they build, build these relationships and it's like, look, you might really like the person a lot but we have to service the brand as a whole because ownership then later on is gonna see like, Hey, you, know, you made a lot. A lot of times that happens because you're not, we're not, we, or 3PL is not strict enough, right? You just, you can bend the rules here and there once in a while, but constantly letting things go because I'm non-compliant. It usually comes down to really, it's kind of like a workflow that you're breaking that's non-compliant. You can do that once or twice, but you can't make that the norm. So, to circle back to the initial point is like, Hey, you know, what is having that, hard conversation to be like, look, we need to fix X, Y, and Z'cause this is the root of the problem. And a lot of it. And then what you're seeing is, a lot of complaints you'll see from a brand or a 3PL that does loosen up that one of the common denominators there is inventory management. Right. Because is something I had mentioned earlier. Is that if you are not really strict on your inventory management or the processes before on the the item setups, on your inbound verification and workflows and the steps to making sure that everything is either scanned, RF, or now there's other different types of automation. If they're not meeting those compliance and you're checking in that inventory and just kind of putting a bandaid on it, you're gonna see that down the road and that's gonna snowball, right? So, it, again, a collaboration just to ask the hard questions, make sure, and, and, and really what it's tightening it up on. And the 3PL sometimes also needs to take the responsibility, right? It's accountability as well. So it's not always on the brand, it's the, we didn't do this properly. We didn't, we screwed up. We, we kind of screwed this up early on. We're gonna go ahead and kind of, put this into our, into our mechanic shop, right on our dime, clean it up. It's gonna be either a full physical inventory account, do a labelling project or whatever it might need to be to make sure, okay, this is how we're gonna get this part of the business to flow better. And then actually, scale for success. Right? So, it sometimes you have to Yeah, because, and and'cause things might, evolve. And it might not be the brand's fault or the 3PLs fault, just the environment changes we've seen that happen over, the last five years. Right? How scope of the work can easily change in the supply chain with the impact of COVID, right? Maybe on a smaller sense, like, you'll have, your product might, is a geographically you're shipping to specific areas in the world that now there's something's going on over there, right? Or parcel carriers are not servicing, right. So, or you're, situations with the tariffs, right? So, there's a lot. So being strict, but also have to be nimble and understanding that, but there's going to be some changes. It just comes down to accountability and, having that direct line of communication with, with the brand.

Tom Raftery: 20:29

Okay. And more important better systems, better process discipline, better people, something else?

Leo Rodriguez: 20:37

All the above. All the above. More and more now it's just like, it's as a 3PL perspective is, okay, there's a lot of repetition. Where is there automation behind this repetition? A lot of these AI programmes, Gen AI agents and, and models as to where, where is there learned behaviour that can be calculated and plugged in and essentially, give the team or give upper hand to the operations or the brand to make better decisions? There's so many different areas now that even on the inbound process. So whether it's an AI plugin that you can have it, to where it's assessing the inventory that's coming in in terms of already obviously has all the data of those, those items, setups and SKUs, and then understands the patterns of velocity of which channels are moving the volume it's moving and predicting already where it should go within the facility to eliminate less touch points, be more efficient. Right? And a lot of time it's taking the thinking out of the person, making decisions that maybe I would make a certain decision, but you might make a different decision. No, let's have this more calculated where, it's gonna be best for, both sides. Right? So, yeah.

Tom Raftery: 21:48

Okay. And so where does automation help or where do humans still make the difference? Where are they necessary?

Leo Rodriguez: 21:58

Yeah, so look, as of right now, there's different levels of 3PLs, and I can't speak for everyone, but, from where we stand right now is we are using automation as a, tool. It's in our tool belt. It's just an additional tool that is part of the everyday decision making. Better assist in funnelling the information. That's just a lot of, it's all the AI plugins that we have in some of our systems that are being able to predict or make decisions that makes sense to the, the client's fulfilment logistics programme. But there's still obviously, a, human involvement. Sometimes three or four different parties involved. You have that freight forwarder contacting you. You might have someone in that's always fo focused on the making sure the replenishments or the the procurement processes being explained correctly to your team so that you know what to do if you have these value added services that are just outside the norm, that you're gonna have to run through a production line. But there's, different quality control parameters. So, a lot of it, again, going back to it, where there's a lot of repetition and a sequence of the same type of event over and over again. There's not that much adjustment. That's where you like, really plug in, where you can have either robotics or automation to really flow that, faster and with accuracy. But there's still a lot of nuances within 3PLs where that's where the, human intervention is, is needed and, and follow-ups. So

Tom Raftery: 23:18

Okay. I mean, there's a, there's a common belief that more software automatically means better operations. Do you think the industry has oversold that a little?

Leo Rodriguez: 23:28

Great question and loaded question there, right? I would say, yeah, it, it, you know what, there's a fit for everyone. So maybe depending on the the 3PL or if they're a specialist and it's, there's some 3PLs that are only doing just e-commerce. They only wanna focus on e-commerce or there's, specific industries or commodities, they wanna only stick to apparel and oli maybe, or a beauties, right? The, the skin cares, the cosmetics, the hair care, and if they can flow that through, specific systems that they know that these are specialised, whether, whether it's AI programme or these order management systems or whatever flow that they want, that they feel like their automation or or systems will be effective and then. Great. Now is there challenges for a lot of these systems to play nice. Absolutely. That's the struggle hopefully, is that now that you have a lot of these, AI systems out there available. They're a lot more nimble. You can, it automatically can figure out and write code for you, right? And can go ahead and put a app, a, system that you had that didn't have access to or cannot connect with certain applications. Now they can. Maybe, they might offer, it, they might be a black box programme, but, they might be able to connect, just speak through these AI algorithms or these AI models that just, are able to figure out in, two minutes you're seeing that these, AI applications that can create a website can write a whole programme that would normally take, engineers or, tech personnel, weeks or months to develop and it's done within minutes. Right. So, to go back to your question it's kind of more of a wait and see, right? I don't have the direct answer. I do know that a lot of our clients still need that, you know, human interaction involvement. But utilising, yeah, of course they, they do wanna see automation especially if, if they scale. The approach there is a lot of times is, and they like, how we, how we approach Like we don't want a brand to go into a certain market or a specific channel retailer. It doesn't matter what it is, right? That, they feel like, oh, well this 3PL will not be able to handle this, does not have the experience. You do have to have, the diversification of your skills and workflows and experience and connections and that you've done it before. That if they go into that specific market, they have the confidence that you are not going to be hindering them. Because obviously everything is right now is quickly reported with analytics. And everything is performance based, right? So these systems will, will rate you on performance and could either, drop you or penalise you, right? If you're not performing meeting the demands of their, the PO deliveries or whatever it might be. Right. So, yeah,

Tom Raftery: 26:08

Sure, sure, sure, sure. That gets us, I guess, to the payoff. Everyone is talking about efficiency, but listeners will want to know what better actually looks like. So when fulfilment gets more disciplined, what changes first?

Leo Rodriguez: 26:25

First the obvious one is a lot less errors, right? That's, that's a big one. Obviously. I know that might be the obvious answer there, but it, it, it frees up time for the brand and the 3PL to focus on helping the brand scale. Start looking into areas where they can improve on. Because what I can see is that if you're spending a lot of time on with just, a lot of the challenges, well that's that's where the time's going is in those challenges. There's so many other areas that are on the peripherals that just what happens? They get the, they just kick the can down the road. It just doesn't, doesn't materialise.'cause you're so focused on, trying to fix the problem, fix it, fix it, fix it, and but actually really spend the time to fix it, but then move on. Like a big one is there, it's like there's so much that these brands could do and like they're within their transportation. By transportation as a whole, I'm talking about, just let's isolate like parcel, right? There's, you can get really dynamic in your parcel programmes. Now, there's just tweaks that can be made and in a, in a lot of different areas, either on the, on the brand side where they're just, in their shopping cart. The way that they're collaborating again with the, the 3PL that has a, a TMS where they can do a lot of business rules and optimise their programme. Essentially use, utilising a mul multi-carrier network to, drive prices down on those parcels, on the each each individual parcels. But be effective. And, and also you can still drop prices and. keep speed, so everyone just staying speed is more expensive, not always necessarily. Depending on there's again, going back to, topics earlier is how was that product brought in? Can you position your product to where just a couple inches in that case, or switching it to a specific type of poly polybag could change the parameters of which carrier be chosen based off of, again, the the setups within the transportation management systems to rate chop, and you have opportunity there to really impact, the overall sale, right? There's, there's a lot of, you'll see brands talk about yeah, there's unusually a high amount of carts being abandoned, right? Well, what's the root of that, right? What are we, what are we looking at? Is it your price? Is there something just internally in your systems that something's happening and naturally, like, hey, customers, like, they'll look at it and they maybe they just changed their mind, but a lot of times it's effectively, they'll see, they, they see that price point. They obviously want to go choose it because they wanna buy it. But did they get crushed in their, shipping and handling? Right. Is there something there that they're, they, they. didn't, Again, collaborate with your 3PL that's willing to go in there and take a nose dive and be like, yes, this is, yeah, this works for this to a, a one unit order. But once you go to two or three units, you, it's putting it $5 and then $10 and $15. That's not, it's not the way to go about it. I know I'll give you a pretty a snapshot of a, an easy scenario, but things like that, it's it can get pretty intricate.

Tom Raftery: 29:16

Okay. What shipping decisions would you say have an outsized effect on margin that most brands overlook?

Leo Rodriguez: 29:26

Yeah, it's, it's a good question there. I would say, it's not a one size fits all. Things change. I keep repeating the same thing. That collaboration, again with these experts, if you're, if you're outsourcing to a 3PL right? It's that having those follow up calls. The 3PL might have a new, yeah, have, have a new carrier and a new service, that might be really beneficial for your type of shipping zone. Understanding your zone shipping what specific zones are heavy, right? We have those, us let's say point to us, but a lot of 3PLs out there have those tools available within their dashboards and they can, that can be shared. That data is all available, real time to jump into those, access those, those are vital in making significant business decision. It's the first thing that these brands would think of when a lot of the, 3PLs or if they're self-fulfilling, a lot of times between January and March, you'll see price increases with a lot of these parcel carriers that just a parcel carrier that just being automatically go to, well there's, a, and, and the 3PL all as well, might be also increasing their rates. Right. Slightly, about 2%, 4%, five, whatever it might be, immediately says like, Hey, that bounces over. Just pass that cost along. No, that's like. alright, Where do we cut the fat from? Or Is that something to where it's like, does this really have to impact our margin? Or did we not like look at the whole network as a whole? Did we, let's go ahead and dive in, because most of the time that something that you looked at in January, 2025 that you're looking at 2026, there's new topics and there's new programmes and tweaks that can happen and again, with the, the new AI tools and sophistication and overall the marketplace in parcels, they're grinding, they're all competing against each other. Have a lot of regional carriers that are, are able to be plugged in that are gonna be great. And those are, that's something that, that needs to be looked at. So as a whole, yeah. It's needs to be reviewed from A to Z individual, on every channel. But also, how that integration and those business rules interact with the 3PL because there is optimization that that could be done most of the time. That doesn't have to really impact the margin. Yeah.

Tom Raftery: 31:40

Okay. Now, as we're both, and listening is painfully aware, supply chain has this rude habit of not standing still, but changing all the time. So looking ahead a little bit, what do you think will matter most in fulfilment over the next two or three years?

Leo Rodriguez: 31:58

Yes as you were, presenting the question is taking a look at, especially if you're a lot of the manufacturing that you're seeing as it's happening overseas. We saw that with this the impact with, with the tariffs. Taking a look at, don't put all your eggs in one basket. Maybe that's, that's, that's something that sticks out. We've had a couple of clients saw certain things early. I've had some, conversations to where, we, we kind of saw it coming, so we're like, Hey, look, we, we started still planting, not planting seed, but looking at other factories or manufacturers that would be able to quickly bring us on onboard and produce for us just in case something happens within my, you know, their, current supply chain manufacturing solution. So, again, yeah, there's a not putting all your eggs in one basket, something there. Another one is, yeah, it's, everyone's gonna have to adopt AI. You're gonna have to some area in your business, you're going need to. I was with, at manifest even this was last year in Las Vegas, and you walk into this 20,000 square foot room that looks like a enormous movie screen. And to start the show, it was just black writing with white letters that says. Adopt AI in your supply chain or your business will die. So it was right in front of you, right there. And it was really, it was right in your face right there. It was like, okay, you caught my attention. It's going to exponentially grow. Like in the last, four months it's grown, four or five X. I could be butchering those numbers. But it's, it's rapidly a rising. So, the brand should educate themselves on if they're choosing or they're, they're looking to outsource to a 3PL and they don't have to go down the hole the, or go down the rabbit hole on Well, exactly what does your AI do?'cause those are loaded questions, too, right? But it's understanding, having some familiarity with it. But as if there's 3PLs listening, then, they, they're already having those conversations, or it's already, they have different pockets of their business where, either within their automation, the robot or their system communication it's already implemented or going to be implemented, right? So, yeah.

Tom Raftery: 34:08

There's an old saying where they say fulfilment is like one of those things that works like oxygen. Nobody notices it until there isn't enough of it around. So,

Leo Rodriguez: 34:17

Yep.

Tom Raftery: 34:18

but

Leo Rodriguez: 34:18

Yeah.

Tom Raftery: 34:19

with that in mind, how do you think brands should think about choosing between in-house fulfilment and outsourcing as complexity rises?

Leo Rodriguez: 34:28

Sure. Yeah, that's another great question there. Look, at the end of the day, time is money, and also geographically you could be in an area where the cost of just shipping from your zone. If you're self-fulfilling in a remote area, you're paying a premium or you're just having to get in your car or drop off if you can't get a, a pickup. We get calls all the time, or RFQs through our different sites, for requests. Yeah. Requests for quotes. Right. Just in general. And if there's, like, they're first starting up and it's like, that got to understand there is a, there's a budget, like a significant budget that you're gonna have to throw to outsource.'cause these are, you're outsourcing professional services and there's a lot involved in there and a lot of, look, The reality is a lot of 3PLs they're very careful and they don't want to touch a brand that has only 10 orders a day, right? It doesn't fit, it doesn't fit with them. There's too many resources and overhead in general doesn't make sense to give you a pricing model that would work for you. Now, there is some smaller 3PLs that might want, to, they wanna take that on, and they see that there's, they take a chance on it because there's, we've done it ourselves. There's brands that come, came to us. That came in with zero orders and now they're doing, five, 700 orders a day. And if I, we never gave them an opportunity, well that they wouldn't have gotten there. But to focus back more on your question there is that Resources, operations costs, insurances, labour. Like you still have labour, right? Not everyone. If you're self-fulfilling Yeah. You, unless you have, a lot of money in that bank account to invest in, in your fulfilment process, you're probably not having the automation available.'cause it's, it's, it is expensive. Robotics, all that stuff. Obviously warehouse space. Right. And the big part of it is there is a 3PL is, can move with your business, can scale, can, it if the volume drops down there's more predictability there. A big part of it is the experience and the knowledge of well, how it's supposed to work. The workflows and the integrations. Being able to connect. It's a lot of times you have these brands that are going to. They now are interested in a 3PL because they, they visited, they got a, buyer interested or was connected with a buyer and they had a meeting and they want to bring on their e-commerce brand into a retail channel, right? They wanna go into the Sephora or Walmart or Target, and they're like, but these buyers are also very hesitant be like, Hey, you have to be EDI compliant, right? So, and now I need to get a 3PL right? I, I need to look into getting a 3PL to handle all channels, right? To, to be able to scale and put your energy towards. Big part of it is if they're not worrying about having everything I just talked about, having, the overhead, the employees, the facility dealing with insurances, material handling equipment, everything, everything that comes with it that frees yourself up when you kind of, you're almost, a lot of times you're paying as you go, as you utilise the service. And you can put your time, energy of actually, R&D marketing, building the brand. A lot of it's also seeing a lot of big push on, these social media channels, right? And they're able to spend a lot of time doing collaborations really for with marketing, right? So, yeah.

Tom Raftery: 37:36

All right, and when listeners think about fulfilment after this conversation, what do you want them to see differently?

Leo Rodriguez: 37:45

I want them to, yeah, I want them to see that it's essential obviously. If you're looking at it for fulfilment or 3PL cause that's what I'm doing personally, right? They, they are your hands, eyes and ears. They're an extension of your brand. They impact your brand significantly. Big part I want them to to also look at is look, pricing is not everything. Cheaper is not better. Like, don't only just look at the price. Be inquisitive. It's very simple nowadays. You can throw it into the Geminis, the ChatGPTs they're all gonna to make 'cause it's, it is a commitment. It's a big decision. It's an, it's an investment. And understand that there's going to be a look at to where, what are are, do they handle products or, commodities or the channels that you're looking to go into, do, it's, do they have some of those similar brands that you'll either look up to or that you, you compare to or but look at it as that it's a serious component and don't think that, it's just, Hey, we're going to, now that we got them, they take care of everything. It is a true a, team effort. Give it everything that you got. We've noticed that, look, it's without having to put a big scope of work around it or a benchmark, we've seen just the ones that really engage fully with the, as our clients, they engage with us day in and day out. Really put the effort to meet our compliance guidelines and share information actually, jump on the schedule calls that we do. We actually like, those are the ones that operate much better. They scale actually quicker. The ones that we see, the ones that we see that are just like, it's fine. We're, we'll do this later. We'll talk about it later. You see, that's where they struggle. So, yeah, be inquisitive. Do your homework, compare. Understand that it's, the customer experience is everything, right at the end of the day is that you need to deliver accurately a lot of times with speed. But that whole experience from when someone places order, until it reaches it to your 3PL or your fulfilment process, is part of that. Make that special, make that important.'cause it does, does shine through when it's, when it, it is all interconnected.

Tom Raftery: 39:54

Okay. We're coming towards the end of the podcast now, Leo, is there any question that I didn't ask that you wish I did or any aspect of this we haven't touched on that you think it's important for people to be aware of?

Leo Rodriguez: 40:08

We covered quite a bit. I don't, nothing that comes to mind right now. Maybe a couple minutes it would, but I think we, we, we, I think we got a good amount of stuff there.

Tom Raftery: 40:17

Brilliant. Okay, superb. So, Leo, if people would like to know more about yourself or any of the things we discussed on the podcast today, where would you have me direct them?

Leo Rodriguez: 40:27

Yeah. So, you can find River Plate Inc. It says ww dot River Plate inc.com. find our social media LinkedIn. My full name is Leonardo Rodriguez. We are just fully doing this revamp, really putting ourselves out there. We've been around for 30 over 32 years. So, our community at Southern California, sorry, like really do know us, we got a lot of, we get a lot of referrals but now as we're scaling and really growing the business professionally and virtually out there, we're trying to make an impact. So yes you find us through our social media handles or just visit our website. Feel free to call us also as well. That's, that, that's fine.

Tom Raftery: 41:05

Perfect. Leo, that's been fascinating. Thanks a million for coming on the podcast today.

Leo Rodriguez: 41:09

Tom, it's been a pleasure. Thank you so much.