It’s all coming up roses for 3PLs in the US for the foreseeable future, according to the 21st Annual Third-Party Logistics Study by Capgemini Consulting.
Over 90 percent of both 3rd party logistics users and providers reported that their relationships were both successful and yielding high quality results, and users are convinced that 3PLs contribute to overall logistics cost reductions, improved customer service and offered new and innovative ways to increase the effectiveness of those logistics operations.
Leading the Way to Better Fulfillment Through Technology
Tech is the biggest influencer in the sector, as it has been for the last several years.
Lately, much of the talk is about autonomous vehicles and their nearly endless possibilities. Now that Google’s driverless car has logged over two million miles on live roads, investments in autonomous or vision-guided forklifts is almost a given. These machines have been shown to increase warehouse productivity by more than 10 percent in Giant Eagle warehouses, according to a report by Technavio.
Of course, the influence Big Data has had on all areas of the supply chain can’t be ignored. Not only is it required to make those forklifts perform efficiently, the best 3PLs in America are utilizing data in all kinds of ways to improve the speed and accuracy of pick, pack and ship. These companies are also finding more ways to implement Big Data for use in reverse logistics facilities.
Even though these facilities are constantly receiving irregular and inconsistent products, grading systems and better transparency for customers who are waiting for credits, for example, have been improved through the use of Big Data.
Speeding Up the Supply Chain, One Link at a Time
Tech is also playing a huge role in speeding up the supply chain.
What omnichannel has done for customers and their buying strategies, agile supply chains have done for the speed of those order deliveries. Decentralization of distribution is becoming a huge priority, with many bricks-and-clicks retailers distributing from both warehouses and shops that happen to have the right stock plus the fasted location from which to ship to a particular customer.
The equivalent is happening with eRetailers, too, except that their stock is kept in 3rd party fulfillment warehouses that are strategically placed in order to move boxes out rapidly. In-house tools create a level of transparency that allows shipping experts to move their packages along the fastest routes possible, even if that means re-directing shipments to different shippers.
3rd party logistics is a path to growth in so many industries that it’s not really surprising that the sector is expanding. As online sales continue to explode, 3PLs will be needed even more to keep the orders flowing.