Introduction
3PL Logistics are facing many challenges in 2022. While the growth of 3PL Logistics has been unprecedented, but so are the disruptions in the supply chain. To remain competitive 3PL Logistics will need to build competitive edge in a highly competitive industry, to deliver technology driven services by investing in warehouse automation, mobile technologies, and 3PL Warehouse Management System.
3PL Logistics must concentrate on expansion and improving their existing operations with innovation and automation to pave a pathway to new growth opportunities, focusing on ecommerce and omnichannel fulfilment. To ride overcome these challenges, 3PL Logistics must partner with a professional logistics and supply chain technology vendor to adopt the appropriate workflow and 3PL Warehouse Management System affordably, keep one step ahead of the competition, expand your logistics warehouse business, and boost your bottom line.
Challenges Impacting 3PL Logistics
The dynamics and landscape of the 3PL sector is changing there is a race for 3PL Logistics companies to build resilience and competitive edge in a highly competitive industry, and offer customers consistent innovative, customer-centric, and flexible strategies to overcome the challenges impacting 3PL Logistics.
Here are the 3 challenges impacting 3PL Logistics:
1. Labor Shortage
Despite the high demand for logistics workers, many businesses are unable to find the talent they require to remain fully staffed. A lack of supply chain labor is caused by a variety of factors, including shifting priorities and industry competition.
Many markets around the world appears gripped in a labor shortage which presents problems for 3PL Logistics. Labor consist of 40% or more of 3PL Logistics total costs. Clearly the worker shortage has impacted 3PL Logistics.
2. Warehouse Space
THE rise of e-commerce and the logistical nightmare created by the Covid-19 pandemic have caused a surge in demand for warehouse space.
Available space has been dwindling steadily for a year and a half, and the vacancy rate is now 3.4 per cent, although developers delivered 90 million square feet of new warehouse space in the first 3 months of the year, according to commercial real estate firm Jones Lang LaSalle.
Demand for space from logistics and distribution activities driven by e-commerce industry is the major factor, contributing to the lack of supply for warehouse space.
3. Technology Adoption
Technology adoption and integration is not just a consideration but a must have for any 3PL that plans to remain relevant, competitive, and expand. The reality of volume increases, and labor shortages has made relying on technology a necessity to meet the workflow, improve efficiency and streamline the entire logistics process to meet the future challenges. 3PL Warehouse Management System is now the most implemented technology for 3PL Logistics.
According to 3PL Central:
- 84% of third-party logistics providers use 3PL WMS.
- 53% are using mobile barcode scanning.
- 52% rely on an order management system (OMS)
Responding to these Challenges
The labor shortage, warehouse space and the need to keep ahead of technology will continue to be critical concerns for all 3PL Logistics with no simple answers.
Despite these challenges, it is expected that the worldwide 3PL market would grow at an 8.6% CAGR from 2022 to 2030 to reach USD 1,998.73 billion (according to Grand View Research). The future is bright for the 3PL sector.
To ride overcome these challenges, 3PL Logistics must partner with a professional logistics and supply chain technology vendor to adopt the appropriate workflow and 3PL Warehouse Management System affordably, keep one step ahead of the competition, expand your logistics warehouse business, and boost your bottom line.
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