E-commerce spurring drive for innovation in third-party logistics industry

3PL warehouses face rising customer expectations in the new decade, requiring renewed investment in technology

With both the rise of e-commerce and the increasing expectations of a consumer-like experience for B2B, 3PLs are experiencing pressure to evolve regardless of their customers says the Third Party Logistics Report.

The report's biggest underlying finding is the demand for the greater use of technology throughout all parts of the supply chain to remain competitive and to differentiate in the omnichannel buying experience.

Many 3PLs find themselves facing momentous technological changes impacting everything—from the competitors they face to customer expectations, their ability to streamline and automate operations, and more. The most successful 3PLs are leveraging warehouse management systems with advanced mobile scanning functionality and analytics to improve order accuracy, efficiency and gain insight into workforce productivity.

In this dynamic environment, e-commerce and omnichannel strategies have become a must-have for expanding logistics businesses. With 86%1 of American shoppers using a minimum of two channels and spending up to 11 hours a day engaging with electronic media, having a strategy to target this flourishing market is crucial for growth. Additionally, in the United States alone, e-commerce grew 14.2%2 in 2018, reaching $517.36 billion.

Third-party logistics professionals looking to take advantage of these developing channels will need a partner to help provide the ultimate customer experience, shipping needs, reporting metrics, and more.

The report points to key trends impacting 3PLs, including:

  • The pressure to automate processes and eliminate paper-based workflows to create a "Paperless" Warehouse, leveraging tools like mobile barcode scanning;
  • The growing requirement for 3PLs to leverage data add value through business intelligence and analytics;
  • The growing impact of "The Amazon Effect";
  • The increasing expectations of e-commerce customers;
  • and the expanding requirement to integrate systems, partners, and people.

"With the continued growth of e-commerce, third-party logistics providers stand on the brink of a technology revolution that can either propel them to growth or leave them behind in the face of rapidly escalating competition," says Andy Lloyd, CEO of 3PL Central. "As more retailers move their e-commerce to 3PL fulfillment, 3PLs will need to offer accuracy, speed, cost-efficiency, consistency, and an impeccable customer experience."

"The companies embracing new technology and connectivity will excel and remain competitive in today's environment. 3PLs can reap the benefits of using cloud-based technology to ensure they receive a steady stream of product improvements, without additional hardware or software costs, and without having to add expensive technical resources to their staff," Lloyd continued. "However, those 3PLs that choose not to invest in technology run the risk of not being able to keep up with the current demands and expectations from the average consumer. The State of the Third-Party Logistics Industry report gives 3PLs the required insight to stay current and meet these expectations." 

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