Today’s 3PL Warehousing Industry abounds with opportunities for new sales and profitability. For the first time since the mid-2000s, 3PL warehouses are not only in demand, but in a position of strength. Driven by the extraordinary expansion of e-Commerce, the 3PL market is looking to also grow along with it.
However, these opportunities have also brought new challenges. The expanding warehouse logistics marketplace is already attracting new entrants into the space creating an unfamiliar landscape for many 3PLs. Additionally, these changes come at a time when 3PLs are facing tremendous competition for prime warehousing real estate – and an on-going shortage of qualified workers to staff their operations1.
These factors could potentially make it difficult for logistic companies to pursue new opportunities in a cost-effective manner. While a number of solutions do exist to overcome these obstacles, the best option for most warehouse owners will be to increase their investment in new warehousing technology.
This answer isn’t unique, or even new, to our industry. For decades now, the most successful 3PLs have embraced the latest technological advances to increase warehouse productivity, satisfy customers, and enhance overall profitability.
But latest technological breakthroughs are now enabling 3PLs to increase the effective “size” of their existing warehouses by allowing them to get far more done in the same amount of space. Even better, warehouses are often able to grow without hiring additional staff.
From mobile-device enabled warehouse workers, pre-wired EDI connections, and integrated “scan and ship” breakthroughs like 3PL Central’s SmartPackTM, today’s technologies are already giving warehouses the capability to fulfill more products. New warehousing technology is also helping manage 3PL branding and increases fulfillment accuracy.
Change within the 3PL industry will only continue to accelerate. No longer just concepts, a host of new technologies are already being tested around the world. These include everything from autonomous fulfillment vehicles, to wearable technologies that can track and optimize employee performance2,- and package deliveries via drones.
These will be followed by a wave of additional technologies that will enable even greater productivity. Everything from Big Data and Analytics, to advanced robotics, Artificial Intelligence, and the impending Internet of Things3. These will be followed by a wave of additional technologies that will enable even greater productivity. Everything from Big Data and Analytics, to advanced robotics, Artificial Intelligence, and the impending Internet of Things 3 will almost certainly change the warehousing world as we know it in the very near future.
And as more and more technologies become available, warehouses will require a way to manage all of these new components. For most 3PLs, this will be done via a fully integrated warehouse management software (WMS), making the decision important to the future of your warehouse operations.
The decision of which WMS will play a significant role in the future success of a 3PL’s operations. It will be imperative that 3PLs invest in a warehousing solution that is highly flexible, offers easy integrations, and complete scalability. The ideal WMS will serve as a platform for day-to-day operations and will incorporate new technologies, new features, and integrate with current and new vendors.
As the hub of their operation, such a platform will grant real-time, end-to-end visibility into fulfillment chains – from the original online customer, to the product supplier, through their 3PL, into their delivery partners’ hands – and right to that customer’s door. It must be capable of growing with their business along with their new technological investments.
The future of warehousing is automation, integration and collaboration. It will include dozens of new technologies, many of which may now just be in the concept stage. But it is a future that will be won by those 3PLs who can envision it, plan accordingly – and adapt quickly to the many changes ahead.
Download Our e-Book
To learn more about additional strategies for expanding the effective size of your warehouse, we invite you to download our latest e-Book “How to Grow Your 3PL Warehouse – Leveraging Growth When Near Full Capacity.” Written by our co-founder and CEO, John Watkins, our e-Book details 6 key action steps your 3PL warehouse can take to grow your business. Download today.
5 Keys to Maintaining Success in the Rapidly Changing 3PL Warehousing World
The 3PL Warehousing and Logistics industry has had its share of changes and challenges. However, 2017 is looking like it will be a particularly momentous year. Bringing with it a more competitive landscape and a controversial incoming presidential administration, the year ahead is looking to have a large impact on the way 3PL warehouses conduct business.
However, with challenges often come opportunities for new profit and growth. The ability to take advantage of industry change can be a make-or-break point for many 3PLs or private warehouses looking to pivot in today’s fast-growing and ever-changing warehousing market.
As we enter 2017, it will be extremely important to understand how to navigate change and discover how your 3PL warehouse can maintain – or even increase – success in the year to come. Our recommendations to help drive profit and growth include the following:
1 – Analyze Warehouse Location and Space – Warehouse size and location can play a factor in whether you can respond to a new opportunity. Will your facility’s location help or hinder your ability to win new import or export business? Is it large enough to accommodate new customers? 3PL warehouses who plan ahead will be ready for any opportunities that arise.
2 – Review Warehouse Configuration – As many 3PLs evaluate the early landscape of 2017, they may not be ready purchase or rent new facilities. However, you could potentially find ways to expand your existing warehouse by conducting an in-depth analysis of your operations. The results could help decrease your wasted space through smarter usage and increased efficiencies. This can result in more capacity, more customers, and greater profitability.
3 – Scrutinize Fulfillment Standards – In the new B2C fulfillment world, the ability to manage a customer’s brand presentation properly will determine whether you retain current customers and drive new B2C business. Your B2C customers’ brand image is everything to them. Manage it well and you’ll maintain their business for years.
4 – Assess Technological Sophistication – The e-Commerce fulfillment business is surging. Winning new e-Commerce fulfillment customers, however, could depend on your Warehouse Management System’s ability to easily interface with a variety of shopping carts, shipping providers and other complex integrations. For many e-Commerce prospects, asking about a 3PL’s technological sophistication will be one of the first questions asked when looking for a new warehouse to call home. 3PLs who want to expand should be ready with a great answer.
5 – Maintain an Opportunistic Mindset – At 3PL Central, we believe there is plenty of business for 3PLs who remain properly prepared. Indeed, the entrance of huge competitors like Amazon only underscores how attractive the third-party logistics industry remains. 3PLs who embrace and respond to these challenges will certainly reap the benefits throughout 2017 and the years ahead.
For a complete guide on how you can strategize, plan, and profit from these 5 challenges facing 3PL warehouses in 2017, download the 3PL Central State of the Industry e-book.
Authored by 3PL Warehousing industry veterans John Watkins and Rich Moline, this e-Book was specifically written to help 3PLs navigate the year ahead and learn how to profit. Request your FREE copy today.
Increase warehouse efficiency by implementing a WMS Solution
From receiving inventory, to entering product data, packing up goods, and then shipping them out the door, the daily workload of the average 3PL is comprised of thousands of mundane, repetitious, and exceedingly time-consuming tasks. Unfortunately, some 3PLs are still performing many of these activities by hand.
However, with the improvements in warehouse management solutions, it doesn’t have to be that way forever. Advances in scanning, robotic, and web-based technologies are reducing the need for routine manual labor every day. In fact, a study by McKinsey & Company estimated it was now feasible to automate 78% of all “predictable physical work” conducted in the United States1.
Clearly, this would include a significant portion of work being done within 3PLs. According to Labor Market Data analyst Emsi, more than 40% of workers in the warehousing and storage industry are employed as hand laborers, freight movers, stock clerks, and hand packers and packagers2 – occupations which could all be significantly automated via technology.
While total warehouse automation is still years away from being deployed industry-wide, 3PLs performing even a small percentage of these routine tasks manually are almost certainly losing an opportunity to increase their profits. It is staggering just how quickly the day-to-day costs of manual activities add up.
So just how does a 3PL calculate cost savings when choosing to automate processes? Using the 3PL Central WMS ROI Calculator, you can get an instant estimate of your 3PL’s potential savings when looking to deploy automation.
Free to download, the WMS ROI Calculator was created to demonstrate just how much a 3PL warehouse can save by switching to a cloud-based WMS alone. We estimate that the typical 3PL will save an average of $2,750 every day in manual labor costs by moving to an automated system. These savings add up and continue to improve a 3PL’s bottom line.
Of course, reducing pure labor costs is only one way a 3PL can benefit from warehouse automation technology. Automating processes can instantly make a warehouse more productive, effective, and competitive by enabling you to:
- Increase efficiency
- Improve accuracy
- Move products more quickly
- Free up staff for higher value work
- Increase profitability
The future of warehousing will belong to 3PLs who can respond quickly and efficiently – while still maintaining their profit margins. Staying abreast of the latest trends in warehouse automation will help ensure your 3PL continues to do well.
Download Our Free WMS ROI Calculator.
To learn exactly how much a cloud-based WMS software could start saving your warehouse, we invite you to download the 3PL Central WMS ROI Calculator today. Straightforward and easy to use, our calculator is already providing eye-opening stats on how much a 3PL can save day-to-day and year over year.
Drop shipping may well be a 3PL warehouse’s single-biggest opportunity for profitable growth in the next year. Considering that the growth of drop shipping is inextricably tied to the continued expansion of the e-Commerce market, it is an opportunity that will only grow larger in the years to come. This is a prime opportunity to increase revenue for most 3PLs.
According to e-Marketer, online retail sales will reach $1.915 trillion in 2016 – a 19% increase over 2015’s totals. While the pace of growth for overall retail sales is subdued, the digital portion of sales continues to expand rapidly, with a 23.7% growth rate forecast for 20161.
Digital sales also continue to be propelled as “m-Commerce,” AKA purchases made via a mobile device such as a phone or tablet, have become increasingly easier and more popular for online shoppers. As of Q1 2016, nearly 19% of all U.S. e-Commerce sales came via m-Commerce, according to a report from comScore2.
In Europe, the numbers are even more amazing. According to the Paris-based online retargeting provider Criteo, more than 40% of all e-Commerce purchases in the EU were made via a mobile device in 2015, a figure they project will rise to as high as 70% of all purchases by 20173.
This pattern represents a new and very significant trend. Consumers who were once reluctant to buy anything via a mobile device are now drawn to mobile-friendly sites and apps. Mobile purchases have soared as online retailers develop a host of secure, frictionless checkout systems like Masterpass, Apple Pay, and PayPal One Touch.
The impact of these combined trends is rapidly forcing nearly every retailer to become a multi-channel vendor. In order to survive and give consumers the convenience and selection they want – when, where and how they want it – retailers must now offer multiple means of making a purchase. Incredibly, according to Google, up to 85% of all online purchase are started on one device and then completed on another4.
The good news is that this strategy seems to be paying off for those retailers who have been able to adapt. Current statistics show that the average multi-channel shopper will shop more often, and spend three times as much, as an average single-channel customer.
These latest developments will only accelerate the growth of drop shipping. This is especially important to global retailers who are now able to fulfill online purchases via drop shipping arrangements with a 3PL who can offer them the ability to respond swiftly to the ever-shifting demands of their customers.
Drop shipping provides retailers with a host of tangible benefits, including the ability to offer a much wider selection of product options – to scale almost instantaneously – and even lower their inventory storage and management costs.
Given all of that, it is little wonder that up to 33% of all online purchases are now being fulfilled via drop shipping. And given the trends we are seeing across the marketplace, there is no doubt that fulfillment via a drop shipping arrangement will only continue to grow.
If you’re interested in learning more about drop shipping and how it can help your 3PL grow and increase revenue, download our latest free white paper, “The Four Ways 3PL Warehouses Can Profit from the Drop Shipping Revolution.”
Written by industry experts, our paper provides a detailed overview of the drop shipping process, summarizes the benefits and challenges, and even identifies what 3PLs must do in order to capitalize on this opportunity.
The intensity of the holiday season will put your Warehouse Management System to the test. From the sheer volume of orders, to the shifting customer demands, the spike in return issues and never-ending delivery challenges, it’s as if the season was designed to expose every flaw in your warehousing software.
At 3PL Central, we can assure you that you are not alone. To help you navigate this holiday season, we have assembled our own “naughty” list of the Top Seven Ways a WMS Can Fail during the Holidays. We invite you to check it twice – and let us know which problems are affecting your ability to provide the level of service your customers need during this most crucial time of year.
Our Top Seven WMS Failures include: More…
The staggering growth of today’s e-Commerce industry has been largely driven by consumer spending. As consumers spend more, their expectations also increase exponentially. But how do we meet the ever-growing needs and expectations of your e-Commerce customers, not to mention, your 3PL?
To help you address these needs, 3PL Central has developed “The Five New Rules of e-Commerce Fulfillment.” These rules will provide you the opportunity to cash in on the substantial e-Commerce profits coming in the years ahead and succeed in meeting the goals of your customers . More…
3PL Central sends its condolences and wishes for a fast and safe recovery to all of our customers – and the millions of other people affected by the devastation of Hurricane Matthew. More…
Mainsail Partners’ investment will provide capital for 3PL Central to accelerate innovation and drive expansion
Manhattan Beach, CA (December 3, 2015) – 3PL Central, a leading provider of warehouse management software (WMS), today announced that it has received a $17.5M investment from Mainsail Partners. 3PL Central serves third party logistics providers (3PLs) and private warehouse managers by delivering the most powerful – and the most affordable – WMS available through the cloud. Mainsail Partners is a growth equity firm focused on growing, bootstrapped companies. The growth capital will be used to accelerate 3PL Central’s product development and innovation, expand and enhance its client services, and scale its sales and marketing team. More…
MANHATTAN BEACH, CA – MANHATTAN BEACH, CA – April 21st, 2015 — 3PL Central announced today that it has been selected as a Top 100 Logistics IT Provider for the third consecutive year by Inbound Logistics magazine. 3PL Central has been a pioneer in the logistics industry, when they became the first to offer their flagship 3PL Warehouse Manager WMS through the Cloud. More…
MANHATTAN BEACH, CA – June 23, 2014 — 3PL Central announced today that it has been selected as a Top 100 Logistics IT Provider for the second consecutive year by Inbound Logistics magazine. 3PL Central has been a pioneer in the logistics industry since 2006, when they became the first to offer their flagship 3PL Warehouse Manager WMS through the Cloud. More…