The Top 5 Challenges 3PLs Face

The Top 5 Challenges 3PLs Face

With third-party logistics providers on the rise, it is evident that the unprecedented growth the world witnessed in the e-commerce sector is here to stay.

Keeping up with the fast-changing landscape of the economy presents major challenges for 3PLs.

Here are some of the most notable challenges in 3PL distribution:

1. Meeting Consumer Expectations

COVID-19 has demonstrated exactly how fast consumer expectations can change. As a result, many companies have had to develop e-commerce fulfillment and online delivery options quickly while also adhering to strict operative guidelines. To make matters more complicated, e-commerce giants like Amazon have set the standard for consumers by offering free two-day shipping, accurate and fast order fulfillment, and full visibility of product-tracking.

To keep up, 3PLs can utilize dynamic storage solutions, warehouse automation hardware, and warehouse design consultation services to optimize their storage strategy and space. Solutions providers like ABCO Systems can help 3PLs design their e-commerce fulfillment centers to optimize throughput, drive down costs, and stay efficient.

2. Acquiring + Retaining Talent

A 2019 Report by Inbound Logistics showed that 64% of 3PL providers listed finding, training, and retaining qualified labor as a challenge they face. To stay competitive, providing high-quality service is of extreme importance in a consumer-focused industry. Without acquiring and retaining the right talent, e-commerce brands stand to lose a positive reputation, face slower business growth, and potentially lose money on higher labor costs.

To offset the risks and costs associated with turnover, providers can turn to 3PL warehouse automation solutions that reduce fulfillment times for orders. The right solution can reduce labor costs tremendously, and simplify operations in a way that simplifies the training process, too.

3. 3PL Warehouse Design + Automation

In the dynamic landscape of today’s economy, it’s no surprise that many distribution and e-commerce fulfillment centers today are struggling to scale their warehouse capacity to match demand. It is easy for warehouse spaces to become stagnant with outdated setups that past operations once required. To work around the conundrum of changing storage and capabilities requirements, 3PLs can consult 3PL solutions providers for insights on how to optimize their warehouse design and solicit specific recommendations on customizable storage solutions and 3PL warehouse automation hardware that maximize warehouse space and improve order fulfillment operations on a daily basis. Though automation requires a large initial investment, it reduces an operation’s overall cost-to-serve and can improve ROI in less than 24 months.

4. Shipment Visibility + Analytics

Managing inventory from a wide range of vendors can make it very difficult for 3PLs and e-commerce brands to ensure fast shipping times. To meet consumer standards, 3PLs must rely on leading-edge warehouse execution systems to be able to track and record all warehouse operations in real-time.
To continuously manage those expectations, 3PLs must also depend on data analytics to identify and modify inefficient across their operations. By automating their supply chain processes and integrating them with all suppliers, 3PL companies stand to create much more long-lasting relationships with their consumers.

For more information on ABCO Systems’ 3PL solutions visit contact us HERE.