Third-party logistics (3PL) warehouses and services are more important than ever to the supply chain. The most notable reason is how 3PLs play a vital role in helping their customers meet growing consumer demands and expectations. When you consider that ecommerce sales were estimated at $870.8 billion in 2021 according to the U.S. Department of Commerce, this becomes even more relevant—especially for a growing 3PL.
One of the fastest growth opportunities for many warehouses since early 2020 has been ecommerce fulfillment—where the customer, or should we say consumer, is king. Today, many 3PL businesses are also looking to optimize fulfillment strategies to support a variety of their customers’ selling channels and focus on a unified omnichannel fulfillment strategy. When considering the importance of meeting warehouse customer expectations, it can drive meaningful change for how a 3PL business operates and plans for growth.
But what does all this mean, and how can a 3PL prepare to meet the needs of the brands they serve and the consumers buying goods?
The is not a one size fits all solution. However, there are two areas in which a 3PL warehouse can enhance their operations and improve the overall satisfaction of the brands using their facilities and services.
Automating Warehouse Functions for Efficiency, Productivity, and Accuracy
When considering how to meet the rising needs of warehouse customers, let’s first think about how 3PLs best serve them: automation. Automation has a broad definition, but for warehouse customers, it falls within three main buckets: efficiency, productivity, and accuracy. In most cases, the right warehouse technology solves this.
This shouldn’t come as much of a surprise considering that 84% of the 3PLs surveyed in the Third-Party Logistics Benchmark Report leverage warehouse management system (WMS) software already to enhance the needs of their customers. The most useful reasons reported were to help with inventory management, increase order volume, and, you guessed it, provide a better customer experience.
A WMS offers warehouses the opportunity to improve their overall performance and efficiency by gaining accurate, real-time data to make informed decisions and visibility into daily operations. By leveraging technology that automates workflows, 3PLs have more time to focus more on delivering excellent customer service.
But in many cases, a WMS isn’t the end all be all. If you are a 3PL looking to enhance or expand the customer experience for your customer’s brands, you may need to consider an order management system (OMS) as well. When combining a WMS and OMS, a 3PL can also track sales, orders, and inventory levels to offer additional visibility to warehouse customers. This type of offering can greatly improve the overall experience and drive positive results.
Overall, today’s warehouse customers expect nothing less than seamless operational performance from their partners and service providers. Not to mention what consumers want. Since the pandemic, 74% of consumers are more likely to buy from brands that provided a demonstrated concern and excellent care for their customers. When thinking back to the “Customer is King” mantra, it really drives home the need for 3PLs to have the best warehouse technology and automation available to create a cohesive experience for their customers and consumers alike.
Implementing Additional Warehouse Services, Customizations, and Partnerships
In addition to the overwhelming desire for improved visibility and accuracy for both orders and inventory, brands also look to their 3PL partners to help them deliver on their brand promise. This can range from faster order processing, the ability to fulfill orders from multiple selling channels, custom kitting and assembly services, small parcel shipping solutions, reporting and predictive analytics, and more.
These services are at the heart of a 3PL warehouse and can keep their customers coming back for more when done correctly. But this means 3PLs need to be up to the tasks at hand. For a warehouse looking to improve the customer, or consumer, experience, the warehouse automation noted above begins to play a deeper role in the overall ability to execute on customer needs. Does your 3PL have the right tools for efficient picking, packing, and shipping? What small parcel shipping solutions can your 3PL offer? What shopping carts or marketplaces does your technology integrate with to meet the needs of brands? Can your 3PL customize packing slips, email offers, personalized communications?
At the end of the day, a 3PL warehouse must demonstrate the ability to successfully meet the demands of their customers while gaining their trust to suggest new and innovative fulfillment strategies. In the 2022 State of the Third-Party Logistics Industry Report, I shared that 73% of 3PL users agree that 3PLs improve logistics effectiveness. In addition, 64% of 3PL users also agree that the use of 3PLs has reduced overall logistics costs—making 3PL warehouses excellent strategic partners.
When we consider how ecommerce has evolved the way people shop, 3PLs must be prepared to meet their customers’ specific needs wherever and however they sell—all while growing and evolving their own businesses.
Rising 3PL Expectations
To learn more how Extensiv can help your 3PL meeting the growing needs of your customers and consumers, request a demo today.