The increasing digitalization of logistics services driven by changing consumer habits and expectations has created a new era for 3PL services and operations.
As interest in outsourcing logistics to 3PL providers continues to grow, many logistics companies are looking to offer more services and support to customers, in terms of navigating logistics options.
While digitization is key to growth, the most significant changes in the industry are driven by the need to meet changes in customer needs and demand. Providers simply must adopt digitization to meet customer expectations.
Technological updates continue to influence these trends and provide advanced services with more diversity than ever before, driving consumer expectations for faster delivery, tracking, online integrations, insights and more.
From real-time tracking of deliveries, selecting from various omnichannel delivery options, or receiving automated shipping updates across multiple carriers — customers are expecting more options and data transparency from 3PL providers.
The changes in technology are also making growth and development for businesses more possible. Digital upgrades have revolutionized many parts of the logistics industry, from integrated online ordering to automated workflows allowing 3PL warehouses to increase their daily order fulfillment and provide up-to-date inventory and order reports to customers with the click of a button.
From integrated mobile apps for warehouse and transport to self-driving trucks, drone last-mile delivery, and more; technological updates are allowing logistics providers of all services and sizes to enhance and optimize their operations.
What additional services can 3PLs be offering?
There are many tactics third-party logistics providers can offer to customers to reduce the impact of port congestion and bottlenecks, or shipping delays. As the popularity of outsourcing logistics to 3PL providers continues to increase, the demand for these additional services and support in navigating the logistics industry is increasing too.
Through offering tracking and data capture, providing increased visibility, shortening supply chains (with localized warehousing), or enhancing software integrations for a more streamlined order-dispatch experience.
In the Q3 CartonCloud Logistics Index (CCLI), we gathered feedback and insights from over 80 members of the logistics industry to assess how these changes were impacting businesses.
- Almost one-quarter of respondents are currently offering increased visibility and tracking to their customers, to assist them in navigating the logistics industry.
- A further 23% of respondents said they were offering multiple warehouse locations to customers, to shorten supply chains and reduce the risk of long-haul shipping delays for last-mile orders.
- An additional 20% said they currently offered cross-docking services to offer faster freight processing and turn-around.
How technology is enabling 3PLs to offer more
Over a third of respondents said they didn’t feel their company had the means to capture and track data, to provide transparency to their customers.
This finding comes despite results showing that the ability to 'provide increased visibility, order tracking, and integrations to customers' was seen as the most valued service offered to customers to help navigate logistics options, as selected by survey respondents.
The report showed many companies were looking to invest in technology in the coming six months to create more efficient operations and provide greater customer service.
Investing in digital solutions benefits both the company and the customer. Integrations for tracking and order updates provide greater transparency to customers and can also remove manual data entry workload from the provider — by automating data management and sending updates as certain order or delivery milestones are met. This provides transparency for customers, to see where their orders and inventory are at any given time, without the need for a phone call or manual data reporting.
- To optimize operations, 19% of respondents said they would be investing in fleet and warehouse technology upgrades in the coming six months
- A further 17% prioritized removing paper-based processes
- 15% were looking to implement barcode scanning
- 14% introducing automated workflow optimization.
Beyond transparency: how can 3PL providers offer data analysis for customer supply chain planning?
As customers look to outsource more of the logistics side of their businesses, more opportunities are opening up for 3PL providers to offer additional services to support customers with supply chain planning.
The Q3 2022 CCLI whitepaper found more than one-in-ten providers were currently offering insights and analytics to their customers to support them with future planning for demand and supply chain.
The report shows an evolution in what it looks like to be a third-party logistics provider, as logistics companies like this are exploring new and innovative services they can offer to customers, to increase revenue with increased billable services, to attract and retain new customers, and to ensure the success of their customer’s growth.
Some respondents said their cloud software automated the data to provide to their clients, others ran powerful logistics reporting tools to collate and analyze data once a month, or employed customer success managers, who communicated internal data to customers.
“We have full transparency with all of our customers and allow them access to our system via customer portals.” - Respondent, Business Owner, Warehouse & Transport Operations.
“Most definitely, stock inventory and movements are important to the customer and the more attention to detail and transparency you can provide build trust and relationships.” - Respondent, Operations, Warehouse.
Find out more
The September 2022 CCLI Whitepaper will be available for free to all members of the logistics industry, alongside previous reports, on the CartonCloud Logistics Index Archive.