9 Statistics About 3PLs That Brands Should Know  

We’ve all heard of the butterfly effect, a concept borrowed from chaos theory that posits how one small change in an environment can cause larger and often unpredictable changes in another environment.  

So even if you aren't partnering with a 3PL now—or don’t have any immediate plans to partner with a 3PL in the near future—it’s important to be aware of the challenges facing the 3PL industry for several key reasons: warehouse space is becoming scarce, the labor shortage is already a struggle and 3PLs are looking to hire more in 2023, and 3PLs are figuring out the best ways to overcome the obstacles.  

Here is some germane and noteworthy data generated from our report: 

Warehouse Capacity Constraints 

The number of 3PL warehouses operating at or above capacity reached an all-time high in 2022. In 2023, the challenge will be to manage facilities costs and find new ways to expand capacity to support new customer acquisition.  

Why this matters to brands: Finding additional warehouse space at a 3PL will increasingly become difficult. Brands may also have to pay higher rates for storage or find additional channels to move inventory more quickly. 

Key Stats 

• Nearly 60% of warehouses are utilizing more than 90% of their space and another 28% running between 80–89% 
• Once warehouses reach 80–85% space utilization, many find a drop in efficiency related to movement and storage
• Nearly 35% of 3PLs cited finding and acquiring warehouse space as one of their top challenges, while 39% of 3PLs cited new locations as one of the most significant opportunities in 2023 

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 ever-rising labor costs, the search for qualified employees will continue as a trend in 2023. 

Why this matters to brands: 3PLs are recruiting from the same labor pools, so competition for labor will increase as well as pay rates. 

Key Stats 

• 59% of 3PLs said labor costs made up more than 40% of their total operating expenses 
• Despite growing labor costs, 71% of 3PL respondents intend to increase their workforce in 2023 
• 53% of 3PLs see automating processes in the warehouse as one of their biggest opportunities in 2023 

Technology Adoption 

In 2022, 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 a way to better work with customer order sources. In 2023, this trend will continue as brands diversify sales channels to address changing consumer behavior. 

Why this matters to brands: 3PLs are finding key advantages and cost savings from automation. Brands should consider looking at these benefits to be more efficient and reduce worker injuries. 

Key Stats 

• 38% of 3PLs used their WMS to scale order volumes by more than 25% 
• After adding a WMS, omnichannel fulfillment participants are 30% more likely to see time savings benefits over other fulfillment types 
• The top three reasons 3PLs adopted WMS was to support real-time inventory tracking and management (82%), drive greater accuracy (75%), and to improve operational efficiency (69%)