Third Party Logistics (3Pl): More Critical Than Ever
Third-party logistics (3PL) is key to achieving business goals — whether it is venturing into new markets, expanding the customer base, or creating seamless consumer experiences. A growing number of businesses are partnering with 3PL providers to efficiently manage their supply chain and gain a competitive advantage.
The ongoing COVID-19 pandemic that created unanticipated and complex challenges in the supply chain, has underscored the importance of partnering with reliable 3PL providers. Despite uncertain conditions, a trusted 3PL provider can help businesses save costs, avoid supply delays, ensure business continuity and meet growing consumer demands.
More than ever, partnering with 3PL providers is the critical strategy that helps businesses address new needs, go the distance, and capture market opportunities, no matter what the external circumstances are.
Third-party logistics: Market growth
Third-party logistics (3PL) registered a revenue increase year-on-year to reach $231.5 billion in 2019. While the U.S. ranks second in terms of the 3PL market, the global market is expected to grow at a CAGR (compounded annual growth rate) of 8.5 percent between 2021 and 2028.
The rapid growth of e-commerce, new technologies, and growing consumer expectations of convenience and fast delivery are some factors that are driving the growth.
A 2019 third-party logistics study showed that 89 percent of shippers believe 3PLs contributed to improving services to customers. Besides, 73 percent of 3PL users agree that 3PLs are able to provide innovative ways to enhance logistics effectiveness.
How do 3PLS contribute to business growth?
Cater to the e-commerce trend: While e-commerce is not a new concept, a record number of shoppers went online during the pandemic. Consumers spent a whopping $861.12 billion in 2020 when shopping online with U.S. merchants that show a 44 percent growth year on year, as per an estimate. This represents the highest e-commerce growth in the U.S. in over two decades. Ecommerce growth in the first quarter of 2021 was also higher than the numbers recorded in the first quarter of 2020.
Ecommerce orders require more labor, space, technology solutions, specialized facility design, and shipping strategies. The most reliable same-day delivery services Miami businesses rely on have the e-commerce expertise to handle emerging requirements. 3PLs have the staffing, delivery systems, scalable and flexible space, warehousing, and inventory management capabilities businesses need to scale up their online sales.
Meet consumer expectations: Instant gratification is the buzzword in the retail environment of today. Consumers’ expectations with respect to same-day, same-hour, and next-day delivery continue to grow. As a result, retailers are relying on regional 3PL providers to create an always-on, seamless shopping experience. From warehousing, inventory management, ‘white glove’ storage to other innovative delivery methods, 3PL companies are utilizing a range of fulfillment strategies to exceed consumers’ expectations.
Reduce costs: During the initial days of the pandemic, panic buying led to a sharp spike in trucking volumes. As businesses struggled to meet the sudden rise in demand, this translated to higher costs and delays. 3PL providers offer a range of logistics and warehousing services that help businesses find solutions that are efficient and cost-effective. The most reliable same-day delivery services Miami has on offer are equipped to help businesses in Miami avoid excessive costs related to sudden spikes in demand.
Providers of the most efficient courier services Miami businesses rely on also offer a range of services that go beyond delivery. This eliminates the need for businesses to invest in warehouse space, inventory management, ‘white glove’ storage, and transportation technology. By prioritizing their investment in core business activities, businesses can better navigate the uncertainties of current times.
Ensure business continuity: The most common reasons for supply chain disruptions include natural disasters, extreme weather conditions, and pandemics. Shipping delays are detrimental to businesses of all sizes with missed deliveries and reduced production translating to increased costs, loss of reputation, and an unhealthy bottom line. While global supply chains were impacted during the pandemic, businesses relied on regional and local 3PL providers to ensure business continuity. A 3PL provider offers specialized delivery modes including rush-hour, super-rush hour, and same-day delivery modes, apart from warehouse services to help streamline operations. A regional 3PL partner can adapt quickly to changing conditions and create tailored logistics solutions for businesses.
Third-party logistics providers help businesses save time, streamline supply chains, and avoid costly delays and disruptions. Trusting the right 3PL expert allows your business to focus on enhancing overall value to your customers.
