Third party logistics (3PL) providers face a sea of changes. These changes include technology and mobile applications that are disrupting the status quo. This article examines the impacts of technology on 3PLs today and in the future.
Author John Naisbitt has said, “Trends, like horses, are easier to ride in the direction they are going.” When it comes to the challenges facing third-party logistics (3PL) providers and what they are doing as a result, it appears he is correct. Identifying the trends and where they are heading, then doing what it takes to get your 3PL moving in the right direction, appears to be the best approach.
3PL has entered a period of rapid change. Its growth has been tremendous; a trend that’s expected to continue well into the future. Technology and mobile applications are revolutionizing the way things are done. Within this context, 3PL providers are also navigating through a growing regulatory environment and intense competition for business, all while dealing with a labor shortage and increased customer demands. Factor in, industry consolidation, emerging and disruptive Uber-like supply chain models, and the continued evolution of omnichannel fulfillment. Today’s 3PLs must be at the top of their game to thrive.
“As the world continues to change faster than ever, our challenge is to change just as fast. Supply chains are only getting more complex, requiring a more collaborative relationship between 3PLs and their customers,” reports John Wiehoff, CEO for C.H. Robinson.
Continued globalization has greatly impacted 3PLs. According to Jeff Suchevits, head of Industrial Vertical—Americas at APL Logistics, most companies’ supply chains now include an element of globalization, either because they manufacturer outside the continental United States or they buy from suppliers that do. This, he says, has changed the supply and demand chain complexity due to factors that include: border crossings, numerous handoffs, more exposure and increased transit times.
The growth of omnichannel is also impacting 3PLs, reports Duane Sizemore, senior vice president of marketing and business development at Saddle Creek Logistics Services. He says traditional supply chain models that segment processes and departments will be ineffective in his environment. The increasing demand to get products where they need to be “quickly, seamlessly and cost effectively,” he says, means it’s essential that “shippers, 3PLs and other partners establish collaborative relationships to ensure optimal omnichannel distribution.”