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Integration Manager

All the integrations you need to easily automate and streamline your online orders from a single platform. 

Get Started for Free
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2023 Third-Party Logistics (3PL) Warehouse Benchmark Report  

Welcome to the 4th Annual Third-Party Logistics Warehouse Benchmark Report. 

This report uses aggregated responses from 200+ logistics professionals who identified as 3PL warehouses from across the United States, Canada, United Kingdom, Australia, and New Zealand. Download the complete report for insight on 30+ industry-specific topics and best practices, trends, current issues, and opportunities facing 3PL warehouses. This information builds on data collected from 2020 - 2022 and provides year-over-year changes or trends when applicable.  

Read our 3PL industry key findings below from each section of the report. 

Growth Slowing Available capacity Expensive Labor Warehouse technology Faster Fulfillment

 

The 3PL Landscape

Looking at 2023 3PL warehouse respondent data, on average 3PLs served 3.7 industries with retail, apparel, bulk goods, and dry storage being the most common. Based on year over year data, those serving apparel increased the most going from 33% in 2020 to 47% in 2023.

Industries Served - Benchmark

Based on the research, there were two clear winners for industries that appeared to support profitability growth. Data suggests respondents serving the cold storage industry, on average, are 49% more likely to experience high and medium profitability growth, over other industries. Participants in the pharmaceuticals / nutraceuticals industry, on average, are 27% more likely to experience high and medium profitability growth over other industries.

Diversifying 3PL Services

Inventory management and order pick, pack, and ship remained the top services, yet more warehouses are looking to extend their offerings in 2023. Download the full report for a complete list of fulfillment types and services that drive growth and profitability for 3PLs. 

Download the report

 

Growth Slowing

Although 34% of 3PL respondents showed more than 25% increase and 42% of respondents showed up to 24% order volume year over year, the remaining 22% of respondents either remained the same or declined. The number of 3PLs with no change or declining order volumes more than doubled in 2023 as compared to 2022.

Average Order Volume Change - Benchmark

 

Available Capacity

Out of all of the topics in the survey, warehouse capacity showed the most dramatic changes year over year. In 2021, when 3PL warehouses were in the thick of COVID fulfillment, 55% of warehouses were operating at 90%+ capacity. In 2022, many brands had over-corrected on ordering massive amounts of inventory to drive 59% of 3PLs to operate at 90%+ capacity. In 2023, we’ve started to see a correction with that number nearly dropping in half to only 33%.

Warehouse Capacity - Benchmark

 

Expensive Labor

Seventy (70%) percent of respondents cited increased labor costs year over year and 20% said costs remained unchanged. Only 10% of 3PL warehouse respondents showed decreased labor costs. While on the surface some might attribute decreasing costs to driving efficiency or automation, data actually suggests that decreasing costs more closely correlated to overall declines in order volumes and profitability.

Labor Cost - benchmark

 

  Warehouse Technology 

Implementing technology can drive efficiency, growth, and profits. When asked about technology adoption, respondents have implemented an average of 3.7 systems across their business, with warehouse management systems (86%), order management systems (51%), and mobile barcode scanning (51%) having the greatest adoption. The data suggests participants who experienced high profitability growth selected order management system (OMS) 1.53 times more than those experiencing lower profitability growth.

Systems Implemented - benchmark

 

Faster Fulfillment

Time to fulfill is getting shorter year over year, with nearly 54% of respondents stating they pick, pack, and prepare packages for shipment within an hour of that order entering their system. In fact, 76% of all orders get fulfilled in less than three hours. Only 7% of companies take more than a day to fulfill on average.

Average time to fulfull an order - benchmark

 

Conclusion

While 2023 still showed significant order volume and profitability growth, this was the first year some 3PLs started to see notable decreases in year over year performance. With a fluctuating economy, a freight recession, and lower than expected ecommerce growth, 3PLs are looking for options to diversify, partner, and better manage overall expenses and cashflow.

The best performing 3PLs demonstrate resiliency, a focus on metrics closest to the point of impact, and defined efforts to drive automation and improvement in their businesses. Leveraging these attributes, these 3PLs will be well positioned to compete for new customers and harness new opportunities in the coming year.

What 2024 will bring remains uncertain. However, what remains certain is that 3PLs will continue to play a vital role in the continued evolution of fulfillment and the supply chain.

Download the report

ABOUT EXTENSIV 3PL WAREHOUSE MANAGER 

Extensiv 3PL Warehouse Manager is the leading cloud-based warehouse management system (WMS) solution built to meet the unique needs of the 3PL warehousing community. Serving as the backbone of our customers’ operations, our platform quickly transforms paper-based, error-prone businesses into service leaders who can focus on customer satisfaction, operate more efficiently, and grow faster. Offering a comprehensive warehouse management platform, we make it easy for 3PLs to manage inventory, automate routine tasks, and deliver complete visibility to their customers.    

ABOUT EXTENSIV 

Extensiv is a visionary technology leader focused on creating the future of omnichannel fulfillment. We partner with warehouse professionals and entrepreneurial brands to transform their fulfillment operations in the radically changing world of commerce and consumer expectations. Through our unrivaled network of more than 1,500 connected 3PLs and a suite of integrated, cloud-native warehouse management (WMS), order management (OMS), and inventory management (IMS) software, we enable modern merchants and brands to fulfill demand anywhere with superior flexibility and scale without painful platform migrations as they grow. More than 25,000 logistics professionals and thousands of brands trust Extensiv every day to drive commerce at the pace that modern consumers expect.   

 

Interested in learning how Extensiv can help your business implement a comprehensive WMS platform and build best practices across your warehouse in 2024?    

I'd like a demo

 
Download the full report

2023 Third-Party Logistics Warehouse Benchmark Report  

This report uses aggregated responses from 200+ logistics professionals who identified as 3PL warehouses from across the United States, Canada, United Kingdom, Australia, and New Zealand. Download the complete report for insight on 30+ industry-specific topics and best practices, trends, current issues, and opportunities facing 3PL warehouses. This information builds on data collected from 2020 - 2022 and provides year-over-year changes or trends when applicable.

 

We update our "Third-Party Logistics Warehouse Benchmark" report with new data every year.

You can download the most recent report above and read the older reports below. 

2022 Report

While 2022 brought positive returns for most 3PLs, many 3PLs are approaching 2023 with caution and a focus on managing costs, specialization, and integration. Heading into the new year, the industry will not only need to watch continued labor shortages and warehouse capacity constraints but also keep an eye on how inflation may impact overall operating expenses. Proactive management and automation efforts will drive efficiency in 2023. 

Along with caution, there is still much room for optimism. Ecommerce order volumes continue to increase, brands are actively looking for new 3PL partners, and profitability gains made this year create a great foundation for profitable growth in 2023.

Read the full report.

2021 Report

2021 marked a unique time for 3PL warehouses—both an exciting and challenging time. Exciting because 3PLs overwhelmingly grew order volumes, profits, and customers. Challenging because most 3PLs were operating at or above warehouse capacity and couldn’t find new space as a result of some of the lowest warehouse vacancy rates in history, unending supply chain backlogs, and a workforce shortage that left many with higher labor costs and fewer people to address the higher volumes. 


Despite these challenging dynamics, 3PLs have thrived, innovated, and diversified to support growth and harness the market opportunity. From building out more robust training and talent management programs to optimizing warehouse space, building out 4PL networks, and implementing new technology, this industry has shown that it can and will evolve as new market dynamics arise. 

Read the full report

2020 Report

With the expectation of a significantly record-breaking peak season in 2020, 3PLs will face volume demands that will test systems, processes, and teams like never before. To harness the expected continued growth, 3PLs will have to create well-defined workforce and warehouse space strategies to address these two key areas that threaten to limit growth potential.


Overall, the outlook for 3PL warehouses remains positive moving into 2021. By following the strategies implemented by 
the fastest-growing 3PLs outlined in the report, more 3PLs can expect to reap the benefits of increased demand throughout the supply chain. 

Read the full report