The Case for 3PL Systems: Why and How

The super nimble 3PL

Your clients want confidence (and they’re investing in it). Are you?

• 74% of logistics leaders are increasing their outsourcing budgets by 2023
• 63% increase in shipping volume YOY for businesses that use best-of-breed third-party logistics warehouse software to manage their fulfillment

3PL fulfillment software empowers your warehouse to be super nimble in handling the most profit-eroding challenges facing your business today:

• High volumes & rising logistics costs
• Support for new warehouse processes & ways of selling
• Inefficiencies in customer service, IT & billing 
• Labor & seasonal challenges (for you & your clients)
• Specialty services that are expensive to deliver & always in flux

Trends driving demand for 3PLs systems

1. Order volume isn’t slowing, especially with the rise of Direct-to-Consumer
2. Pressure’s rising to support new processes & services
3. 3PLs must take ownership for end-customer experiences
4. Labor & seasonal challenges continue to harm your clients
5. Specialty services are king, and will continue to evolve
6. The 3PL market – active, but competitive

#1: Order volume isn’t slowing, especially with the rise of DTC.

Ecommerce presses on:

DTC demand is pushing your volumes even higher:

The cost impact:

Volumes have inflated your clients’ logistics costs to 11% of their total sales. They have delivery expectations to meet; is your 3PL warehouse prepared to go even faster? Can you deliver the confidence clients need without overhead problems in your own operations?

• 50% of shippers increased their 3PL spend in the past 2 years
• Their top goals: Operational Efficiency (56%) and Cost Reduction (47%)

#2: Pressure’s rising to support new processes & services

On top of volume, 3PLs must support a new crop of complexities and expanding sales models. Which keeps staff on the phone, emailing back and forth, and walking the floor a whole lot more.

More customer service headaches

Higher technology expectations

More complicated billing & contracts

• Time-consuming billing & auditing tasks 
• Lost invoices because billing isn’t tied into receiving, putaway, picking & packing
• Services you’re not getting paid for
• No way to identify unprofitable clients 
• Contract renegotiations that fail to factor in new complexities

Modern 3PL systems automatically plug into your WMS, order tracking, and client billing systems to save massive amounts of time and capital.

#3: Third-party logistics firms must take ownership for end-customer experiences. 

Your clients are in a cut-throat race for superior customer experiences. Can your 3PL systems enable this (and take ownership)? Or does your lack of software limit their progress? What are they up against?

3PL software levels up your delivery capabilities with intelligent order routing and automated pick-pack-ship – significantly reducing logistics costs, delivery times, errors, out-of-stocks, and more. All with transparent, real-time order tracking and accountability.

Meeting delivery expectations is the #1 ecommerce fulfillment challenge – even more challenging than labor and warehouse space.

3PL systems are how high-growth logistics firms are improving their customer experiences and taking ownership. Just watch this example with ITB Fulfillment:

#4: Labor & seasonal challenges continue to harm your clients. 

Significant challenges in peak season continue to inflate costs and disrupt service. As a result,

Peak season trends are fueling the fire:

• 3 out of 5 clients say peak season is getting more challenging.
• Nearly half say peak season is now a year-round event.
• Yet, 30% are responding by hiring up.

Put your oxygen mask on

Highly efficient, easy-to-learn 3PL software solutions combine warehouse management and order management software, alleviating seasonal hiring and labor-related disruptions. So you can provide a true partnership to your client when they need it most:

• 3PLs that use these software have seen a 135% increase in labor efficiency per day alongside a 72% increase in daily shipments after implementation
• Train new & seasonal staff very rapidly
• Onboard new clients in 30 minutes

#5: Specialty services are king, and will continue to evolve.

The operational cost to support ever-evolving value-added services is going up. But these services are essential to further pump your revenue streams, such as:

Support all of these services in a single 3PL WMS system, built to optimize your warehouse management operations for change. Offer the most in-demand services. Attract new clients, and keep existing ones happy without slowing down your own teams.

#6: The 3PL market – active, but competitive.

The GOOD News:

Clients see value in a 3PL, and that’s not slowing down.

• Global third-party logistics (3PL) market size will be $1,998 billion by 2023, a 8.6% CAGR from 2022-2030
• 40% of omnichannel companies said inventory management is the #1 aspect they would like to improve in their operations over the next 12-18 months

The BAD News:

Your competitors are also investing in robust 3PL fulfillment systems to win contracts:

• 96% of 3PLs have approved tech budgets for enhancing readiness & continuity planning 
• 69% of 3PLs are currently using a warehouse management system (WMS)
• 49% of 3PLs are using an order management system (OMS)
  

Where are they investing in order fulfillment (and where should you)?

Is your 3PL leaving money on the table by not investing in fulfillment?

Maximize your earnings potential with a 3PL system.

• Manage more clients with varying supply chain processes
• Automate billing activity & capture, tied to your WMS
• Increase shipping volume while reducing costs & errors
• Capture ALL revenue opportunities
• Close your clients’ labor gaps
• Onboard new clients & staff in <15 minutes