What 3PLs Need to Know to Plan for 2021
Every year as we head into the holiday season, I carve out time to reflect on what I’m thankful for and assess what went well or poorly throughout the year. This year, while unlike any other I have experienced, has shown me so many good things. One is how the third-party logistics (3PL) industry has stepped up to play a vital role in the supply chain and make the world a little better in really challenging times. As a part of this industry, I give thanks for unique comradery and the willingness to share information to help others in the industry succeed, especially when plenty of opportunity exists across the supply chain.
That’s where the 2020 Third-party Logistics Warehouse Benchmark Report comes in. At Extensiv, we pride ourselves on our expertise in warehouse management system (WMS) technology and do our best to share our knowledge to help 3PLs grow and become more efficient. This year, we knew sharing our own knowledge wouldn’t suffice, we needed to gather information from across the industry to help 3PL warehouses and key players in the logistics community navigate a unique environment.
In September 2020, Extensiv distributed an online benchmark survey to logistics professionals who own or operate third-party logistics (3PL) warehouses. The aggregated responses to this survey comprise the information found in the Third-Party Logistics Warehouse Benchmark Report. The first and only report focused entirely on the third-party logistics warehouse industry, Extensiv’s Benchmark Report aggregates data from 250+ 3PL warehouses and provides insight on more than 30 industry-specific topics. The Benchmark Report examines best practices, trends, current issues, and opportunities facing 3PL warehouses.
Five main themes emerged across the survey data:
3PL Growth Opportunities
2020 offered unique opportunities driven by shifting buying behaviors and increasing ecommerce adoption, resulting in more than 79% of 3PLs experiencing growth this year already. 3PLs demonstrate optimism that growth will continue into 2021.
Warehouse Capacity Constraints
With 50% of warehouses running at or above space capacity, warehouse capacity constraints have governed the speed at which 3PLs can grow, driving many 3PLs to seek new facilities with additional space and broader geographic footprints.
Warehouse Labor Implications
Labor costs have risen as a result of the warehouse hiring surge required to meet the increased demand on the supply chain, making skilled warehouse workers hard to find. Forty-seven percent (47%) 3PLs cite finding qualified warehouse workers as a significant challenge.
Warehouse Technology Adoption
3PL warehouses have sought out new technologies to drive operational efficiencies and reduce costs. Integration with their core warehouse management system plays a big role in adoption, with 87% of 3PLs having already adopted WMS technology.
3PL Operations Measurement & Metrics
Measuring key performance indicators (KPIs) varies significantly by warehouse, with many still relying on basic reporting rather than service level dashboards or more advanced analytics.
At Extensiv, we advocate for your 3PL warehouse and want to provide you with the tools and resources you need to benchmark your business and make plans for your future growth. With the Benchmark Report, you can learn the habits of the 12% of 3PL warehouses who grew greater than 50% in 2020 and formulate your own plan for 2021.
We’re thankful for you, this incredible industry, and the continued opportunity to make a real difference in the supply chain. To get the first look at the Third-Party Logistics Warehouse Benchmark Report, attend the live discussion and register to receive your own copy of the report upon its release.