Since the start of 2023, we always keep an eye on new trends in Logistics Industry. One of the Logistics trends, MOLOG wants to update today is 3PL Warehouse Trends in 2023, which is summarized from “2022 Third-Party Logistics Warehouse Benchmark Report” by EXTENSIV. The report gathered information about 3PL Warehouses from more than 200 logistics experts from across the United States, Canada, United Kingdom, Australia and New Zealand.
Before we continue, let’s get to know about 3PL
3PL (Third Party Logistics) is the third party or outsource service of Logistics service provider which specialize in various aspects of logistics such as transportation service, warehouse, product distribution, finance as well as related authorized document services.
📦3PL is divided into 4 categories
- Standard 3PL Providers
Standard 3PL provides services such as product organization, transportation, distribution, etc. Normally, all the services that related to inbound and outbound items including warehouse management. Many companies select this category of 3PL in order to improve the logistics processes and reduce the logistics cost.
- Service Developer 3PLs
This type specializes in developing and delivering customized logistics solutions. They work closely with clients to understand their needs. and design logistics solutions to meet those needs.
- Customer Adapter 3PLs
Customer Adapter 3PLs adapt the services according to customer demand. They also work closely with customers to understand their needs and design logistics solutions accordingly
- Customer Developer 3PLs
This type also works closely with customers to develop logistics solutions tailored to their specific needs. They specialize in providing highly customized logistics services and they are known for their ability to provide flexible and adaptive solutions to each organization.
To conclude, each type of 3PL provider offers different approach for logistics focusing on basic service standard or customization or combination of both.
What are the top 5 challenges for 3PL Warehouse in 2023 !?️
Since we all understand what is 3PL, let’s look at their upcoming challenges in 2023.
▶️Labor Shortage
Despite recent Economic Recession, 48% of 3PL warehouse operators said that recruiting and retaining talent was the second biggest challenge, secondary only to cost management because labor costs has gradually rising as well as the unemployment rate which has increased to 3.5%.
▶️Warehouse space constraints
With all the challenges in 2023 like cost and facility management and capacity expansion in order to accommodate new customers, nearly 35% of 3PLs said that acquiring warehouse space was also one of their top challenges.
▶️Billing and Invoicing
Because many people concerned about economy and inflation, 32% of 3PLs stated that they intend to use new technology to reduce the period for billing and invoicing. Programs that help 3PLs improve their profitability will become top priority for investment in 2023.
▶️Technology Adaptation
This year’s connectivity will become one of the biggest change mechanisms for 3PLs. The number of systems that can connect with warehouse management systems (WMS), on average, has increased from 2.3 in 2022 to 2.7 in 2023 with EDI (Electronic data interchange) , shopping carts and marketplace greatly increased in order to perform better work according to customer order sources.
▶️Reporting and analytics
This year’s report highlights the huge differences between the most profitable 3PLs to the low growth or non-profit 3PLs. The most profitable organizations focus on KPIs that tend to drive growth, revenue, and overall cost management such as purchase volume and labor quality. For less profitable ones, they focus on historical data types such as total operating costs. Thus, the new trend in 2023 will emphasize on KPIs that can influence overall cost management.
To summarize, the next thing 3PL Warehouse industry focusing on is the space allocation, logistics talent seeking as well as the search for the right technology to ultimately increase the work efficiency.
In this era, every business has to rely on technology to smoothen the work processes and to help achieve goals. Besides 3PL Warehouse, there are other businesses such as warehouse rentals that need to be transformed to a Modern one in order to catch up to the Global situation and the advancement of technology. If you want to know more about the future direction of warehouse businesses and how to deal with the changes, continue reading at: ( Article link: What is the future direction of Warehouse Business in Thailand? )
📌If you don’t want to fall out of trends,
MOLOG WMS can help you turn your Warehouse into a modern one!! 😊
Just fill out the form for free demo request!!️
So, we can design the suitable package to your budget.
Think WMS Think MOLOG
Reference from:
https://www.extensiv.com/blog/ 3 pl-warehouse-and-logistics-industry-trends-to-watch-for- 2023