Why 3PLs Need to Invest in Ecommerce Fulfillment Now More than Ever

This year has seen ecommerce order volumes grow like never before. Within our own Extensiv customer base, from the first week in January to the last week in April, we saw 91% growth in order volume with the biggest single week-over-week increase jumping 19% in the first week of March. Year-over-year growth for April has now exceeded 93% and appears to demonstrate continued high volumes in early May.

As buying behavior has radically shifted from retail to ecommerce, many 3PLs have thrived in this unexpected peak season, and some haven’t adjusted quickly enough to adapt their warehouse processes to support ecommerce. The single biggest question we hear in the market revolves around how to diversify a 3PL to support ecommerce.

Diversifying Your 3PL for Ecommerce

To those 3PLs who want to diversify or scale their ecommerce fulfillment, we recommend implementing the right technology, enhancing warehouse process efficiency, and understanding customer expectations.

Technology

Think about the entire ecommerce order lifecycle and ensure you have the right warehouse management system (WMS) that will allow you to scale appropriately. First, ensure that your WMS integrates seamlessly with ecommerce shopping carts and offers flexible API integrations to provide two-way communication. Once you have those orders in your system, ensure that your WMS software provides clear visibility and direction to how you can achieve your daily SLAs, while implementing 100% order accuracy driven by barcode scanning technology. Finally, ensure your WMS integrates with small parcel carriers so that you can appropriately rate shop for the lowest shipping costs.

Enhance Warehouse Efficiency

While many 3PLs who service B2B structure their warehouses to support pallet in/pallet out or carton in and carton out environments, ecommerce fulfilment requires warehouse processes focused primarily on single units (eaches) or cartons. Structure your receiving, put away, and pick workflows to optimize for ecommerce orders. Consider FAST principles of flow, accessibility, space, and throughput as you examine your warehouse layout.

Customer Expectations

With the pace of change in the economy today, companies seek 3PL partners who can get them ramped and onboarded quickly. 3PLs need to have scalable processes in place to meet this customer expectation, as well as to provide transparency and visibility to the customers on inventory and order status. Serving your customers so that they can grow and scale with demand will help you drive loyalty and build your own business.

Ecommerce Order Spikes Expected to Continue

Although many people expect ecommerce to return to traditional volumes as states and countries lift their respective stay at home orders, many are also preparing for a second surge of the virus which could result in a resurgence of ecommerce ordering eclipsing the first. Should 3PLs and retailers not take this time to prepare and better scale their ecommerce operations, they risk another slump in sales should a second surge arise.

To learn more about how to better scale your warehouse for ecommerce fulfillment, schedule time to speak with an expert.