3 Emerging Trends in 3PL Logistics
The 3PL sector is rapidly changing. It is evolving and adapting to the logistics demands of today’s business. At the core of this evolution is a realization by companies of the need to provide a service that adds real value to clients.
The core services provided by 3PL companies include warehousing, transportation and orders fulfillment. However, high impact third-party logistics companies are going beyond this traditional role to add extra value to their services aimed at providing a service that far exceeds clients’ expectations.
To keep up with the fast-and-furious trends in the industry, 3PL companies are competing on a number of fronts. One battleground is the shipping standards, which are rising by the day. The other is the use of smart technologies to provide an efficient, yet cost-effective service. Below are the major trends set to redefine the supply chain industry this year and beyond:
1. Value Addition and Transparency
This year will be extremely difficult for a 3PL company to stay afloat if they provide a less-than-impressive service. At the core of 3PL business success will be a commitment to value addition. This will involve their ability to communicate effectively with their clients. Today, businesses compete for not only a good product and service, but also on the quality of their customer service, which is vital when building your brand identity. Besides, a 3PL company’s ability to provide a transparent service increases customer loyalty.
Some of the value-added services that demonstrate a company’s transparency and increase customers’ confidence in a company include forecasts, free audit reports, freight visibility, a schedule of available services, etc. If you want to have an edge over your competitors, value addition and transparency are key.
2. Automating Analytics
The need for investments in cutting-edge and innovative technologies has never been as critical as it is today. As logistics become more complex, having the relevant technologies can simplify these processes through automation. A 3PL company must invest in innovative technologies that provide insights and promote accountability by availing critical information to attract new business while maintaining current clients. Besides, these applications are promoting efficiency and consistency in the supply chain.
Automation is a critical part of today’s logistics process. Labour-intensive tasks are being replaced by automation, which is fueling production efficiency. A 3PL company that ignores the key role automation plays in the supply chain will simply not survive.
3. Innovative Last-Mile Delivery System
The last-mile, that is, delivering products to the doorstep of a client, is a key component in the supply chain. While the big boys such as Amazon and UPS are miles ahead of the competition, any 3PL company that does not invest in the last-mile delivery will struggle to survive. Quick, efficient and reliable delivery of products directly to a customer will be one of the hallmarks of the supply chain sector this year and for many more years to come. Last-mile delivery leaves a customer feeling you are directly involved in making sure their products arrive in good shape, and on time.
The number of 3PL companies on the market is rapidly growing as businesses realize the impact of outsourcing trade-offs in efficiency and cost-effectiveness a third-party logistics company brings on board. To stay competitive, 3PL companies have to overcome stiff competition from other players angling for the same market share. To get that extra edge over competitors, progressive 3PL companies are laying more emphasis on affordable quality and efficient service provision.
That 3PL companies are in high demand is not in doubt. However, the rise in the demand for 3PL services has also spawned fierce competition as more 3PL companies enter the market. This is not a bad thing per se, but any 3PL company that wants to stay in contention must adopt practices and technologies that guarantee clients efficient services.