Nov 03, 2022 2 Min READ

3PL Warehouse and Logistics Industry Trends to Watch for 2023

2 Min READ
3PL Warehouse and Logistics Industry Trends to Watch for 2023

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Last week, Extensiv released our third annual Third-Party Logistics Warehouse Industry Benchmark Report to highlight key logistics industry trends and help third-party logistics (3PL) warehouses prepare for the coming year. The report aggregates data from 230+ 3PLs collected in August and September 2022 and identifies 40+ important key data points. The report focuses on identifying the unique behaviors of the fastest growing (by order volume or profitability) 3PLs to provide a comparison for companies to review as they plan their strategies for 2023.

As 3PLs begin the planning process for 2023, they should consider what trends will impact them as they look to drive order volume and profitability growth. Benchmarking against others in the industry serves as a great starting point to assess relative performance and what action they might take to drive change within their organization.

Top 3PL Warehouse Trends

The report covers the changing warehouse landscape, growth opportunities, potential challenges, technology adoption, warehouse capacity constraints, the labor shortage, reporting and analytics, and billing and invoicing. The following trends summarize the top trend from the report in each category.

Labor Shortage – Despite talk of a recession, 48% of 3PL warehouses identified finding and retaining talent as their second largest challenge (only after managing costs). With 3.5% unemployment and continued rising labor costs, finding qualified employees will continue as a trend in 2023.

Warehouse Capacity Constraints – Not surprisingly, 3PL warehouses operating at or above capacity marked an all-time high in 2022, foreshadowing a challenge for 2023 of both managing facilities costs and needing to find new ways to expand capacity to support new customer acquisition. Nearly 35% of 3PLs cited finding and acquiring warehouse space as one of their top challenges.

Billing and Invoicing – With concerns around the economy and inflation, 32% of 3PLs indicate they intend to implement new technology to reduce time around billing and invoicing efforts and to increase capture of billable charges. Programs that help 3PLs improve profitability will come to the forefront of investments in 2023.

Technology Adoption – This year, connectivity emerged as one of the largest drivers of change for 3PLs. The number of systems integrated with the average 3PL’s warehouse management system (WMS) jumped from 2.3 in 2021 to 2.7 in 2022, with EDI, shopping carts, and marketplace integrations increasing significantly as way to better work with customer order sources. In 2023, this trend will continue as brands continue to diversify sales channels to address changing consumer behavior.

Reporting and Analytics – This year’s report highlighted a stark difference between the most profitable 3PLs and those with low to no-profit growth. The most profitable organizations focused on the key performance indicators (KPIs) most likely to impact overall growth, revenue, and cost management (e.g., revenue, order volume, labor productivity, and single order pick time). Alternatively, those with lower profitability focused on larger lagging categories (e.g., overall operating costs). Focusing on leading indicators that can impact overall cost management will emerge as a trend in 2023.

How Can You Prepare Your 3PL Warehouse for 2023?

These trends represent only a fraction of the data highlighted in the 3PL Warehouse Benchmark Report. Leveraging industry data points in the report, you can learn more about what the most profitable 3PLs are doing differently and assess how your organization compares. To learn more about the outlook for 2023 and to find out how other 3PLs are planning and prioritizing investments for the year to come, download the 3PL Warehouse Benchmark Report.

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