The Future of 3PL Spells Success for Customers
Experts are reporting positive growth for the 3PL (Third Party Logistics) industry in the years to come. With growth can come new innovations and resources that can better serve their customers. More companies are turning to third parties for their operations more than ever now to increase production and speed up delivery times efficiently.
Could now be the time to invest in a 3PL?
The growth of 3PLs and what it means
There are many factors that contribute to the growth of this market. One of them being the reconfiguration of brick-and-mortar stores; they seem to be a slowly dying practice that does not show any signs of changing any time soon. Information technology has continued to feed ecommerce and with more countries around the world shifting towards online resources, third party logistics and warehousing will continue to grow.
Shipping companies are also becoming more reliant on 3PLs and have shown a clear focus on harnessing the power of outsourcing their operations, not just to save on costs but to focus on improving their own processes.
“The global third-party logistics market size was valued at USD 956.80 billion in 2021 and is expected to expand at a compound annual growth rate (CAGR) of 8.6% from 2022 to 2030. The development of logistics infrastructure in the Asia and Middle East regions, the rapid growth of the e-commerce sector, and the development of new technologies are expected to significantly contribute to the market growth.” – grandviewresearch.com
Consumer habits and demand continues to reshape the logistics industry and fuel 3PL services, propelling the transportation industry in particular into the forefront of third-party logistics world.
“The roadways segment dominated the market in 2021 with a revenue share of more than 58%. The growing public-private partnerships model and increased emphasis on logistics infrastructure are expected to drive the growth of the roadways segment over the forecast period.” – grandviewresearch.com
It is safe to say that we can expect trucking to continue to be impacted by the growth of 3PLs as carriers are the cornerstone of third-party services.
A look into the future
If we look back at any advanced technology or systems the common trend is progressive improvement and innovation through out time. The same can be said for third-party logistics as this market has been alive and well since the 1980’s.
Some of the predictions to come out of the future of 3PL include:
· Improved information technology communication between shippers and 3PLs
· Increased mobile applications developed by 3PLs to enhance customer user experience
· Utilize latest advancements in AI and cloud-based technology to streamline operations internally and externally
· Global mergers between smaller 3PLs to assist in canvasing eastern countries’ shippers and making them more competitive in the global market
· Offer more diversity in service to their customers as they grow
Keep in mind these are predictions for the next decade into the 3PL industry but as with most developing markets, there will be benefits that we couldn’t predict. Only time will tell.
Why it’s wise to start now
The 3PL world is in a bit of a sweet spot where services and companies have been around long enough to have substantial experience and offer exceptional variety of services. Many companies remain on the fence about incorporating a 3PL whether it be warehousing, transportation, services, or all of the above. It is a big decision and an even more important to choose the right partner.
Starting now with a reputable 3PL means the beginning of possibly one of the most profitable relationships you can form as a company. As we head into the future of 3PL’s, being connected and included in the inner circles of a third-party service can benefit your organization in the long run.
If you’re like most operation managers or logistics supervisors, you have likely played with the idea of outsources some or all your operations. While this can bring relief upon your staff, it is important to not jump the gun so to find a “quick fix.” Taking the time to devise a plan and strategy for the use of a 3PL is extremely important and above all else, budgeting correctly. Having your ducks in a row before going to a 3PL will help determine if they are a right fit for you.
Is Meadow Lark a right fit for you? With our 40 years of experience in the transportation industry, let us dig into some of your logistical headaches and see what we can solve for you.