The Evolution of 3PL
A Brief History of Third Party Logistics
In spite of these advances, the 3PL market did not really explode until the technology boom of the 2000s. With the Internet becoming far more widespread, third party providers could devise and offer solutions with added services, taking on more and more responsibility. Part inventory management service, part transportation service. Order management became possible with more robust technology platforms. It’s in the last decade that 3PL services have really come of age. In 2017, 90% of Fortune 500 companies based in the United States used 3PLs for logistics and supply chain functions. In 2014, the 3PL industry’s growth rate was outpacing the general US economy by a factor of more than three. Larger 3PLs can deliver more flexible service options, thanks to their greater ease in establishing global partnerships and infrastructure. However, any 3PL business prides itself on offering cost effectiveness and freeing up its clients to streamline their own operations, creating substantial increases in efficiency.
As 3PL providers have increased their tech operations, they have been more aggressively pursuing employees with degrees in supply chain management from major universities. Lines are blurring as freight brokers incorporate value added services, and third party logistics providers add freight brokerage to their lengthy list of services. According to many 3PLs further optimization of logistics costs requires increased supply chain collaboration.
Do you remember when shipping was a rarity in the retail landscape? Nowadays, with the ubiquity of Amazon (5% of the total US market, both on- and offline) shipping is the new default. Cost-effective 3PL solutions have been made available to companies of all sizes. There are new trends in the 3PL industry that are gaining momentum, however. On-demand transportation is one of these. A niche market that optimizes profit for 3PLs, they can offer FTL (full truckload) LTL (less-than truckload), direct and exclusive transport services, the Next Flight Out service, fast delivery, and expediting a delivery anywhere in the world. On-demand transportation means that 3PLs are empowered to act as brokers between companies and customers. Broker 3PLs can sell unsold goods via call center services with high margins.
There are different varieties of niche 3PL providers. For example, some focus on a particular geographical area. Others concentrate on the specific industry verticals with which their business best aligns. These providers can generate higher value and better care for the specific commodities they store and ship (for example refrigerated goods, or pharmaceuticals, or ceramics). They can streamline procedures for their network of customers. With their experience offering solutions of this kind, they are better positioned to offer custom solutions to their customers.
According to Penn State University’s annual 3PL study, the evolution of 3PL has shifted providers from tactical service providers to collaborative partners. A resourceful and agile 3PL provider can take on more accountability for a client and further improve their supply chain functions. Data-driven decision making means they can constantly refine and reiterate on their processes, further optimizing for efficiency and better customer service.
From the Beginning: Choose ShipWizard
Since 1980, ShipWizard has been providing premier 3PL services. We help businesses of all sizes, including ecommerce retailers, both throughout the US and internationally. We are ready to be your trusted, dedicated business partner, whether you need ecommerce fulfillment, mail services, reverse logistics, or more. If you’re seeking a more efficient, cost-effective, and powerful way of running your operations, we can provide. Our business operates on five principles. We’re flexible. Each client receives the service that is best for their business. No cookie-cutter services. If your business needs and goals say one thing and our standard method says another, we will adapt our method to suit your growth plans. We’re efficient. Our goal is to save you time, money, and other precious resources. We’re tech-savvy. We use cutting edge tools to ensure that we work seamlessly for you, with maximum efficiency. We’re experienced. We have four decades under our belts, serving business customers big and small. And lastly, when you partner with us, you speak to one point of contact. One account manager, dedicated to your company’s needs. If you have questions, need solutions, or just want premier service, look no further. Call us today on (800) 967-0030 to learn more.
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