It’s in nearly every news story in the US: the economy is growing at an exponential pace, and there’s no sign of it slowing down. The three factors that affect everything, especially 3PL, are:
- Wage increases
- Lower unemployment
- Easier access to credit
Consumers are working, have more money to spend, and are purchasing goods and services daily. This trend doesn’t seem to be slowing down anytime soon. That translates to more freight sent to retailers as well as packages ordered online. The US Post Office as well as UPS and FedEx are delivering millions of packages every day in a world where they only get busier.
So how does this affect the 3PL industry?
3PL Is Growing
Shippers are continuing to utilize everything 3PL has to offer, including helping to optimize their supply chains, minimize costs, produce value, and bring expectations into line as a crucial part of helping both parties achieve success.
In fact, the 2020 Third Party Logistics Study states that 93% of shippers report that their relationships with a 3PL have been successful, and 99% report that customer relationships have been successful.
Of course, the booming economy has been a great boon for 3PL as well. Both shippers and 3PL providers have benefited from the favorable economic conditions. Innovations in both services and technology help providers deliver on time and efficiently. Focusing on improving efficiency in digital resources as well as asset and cost efficiencies helps to expand their services to the customer.
Shippers understand that if they don’t have the technology to serve their customers, they need to partner with someone who can help. 3PL providers have also been able to make substantial investments in their company’s technology to better serve their shippers as well as partnered companies.
While the economy grows and 3PL continues to move forward, the industry has a specific set of challenges that continue to impact the industry in several areas.
- Driver shortages. Although this is a problem worldwide, it is particularly concerning in the US. The American Trucking Association estimates the current shortage at 60,000, and could potentially reach 160,000 by 2028.
- Shortage of diesel mechanics. In addition to drivers, the Tech Force Foundation estimates that the demand in the US will be more than 29,000 new technicians, in 2019 and more than 25,000 annually from 2020 to 2022. Without them, repairs and preventative maintenance could cause more delays in transportation.
- E-commerce growth. It’s almost as if “As Amazon goes, so goes the nation.” With multi-channel sales as a moving target, brick-and-mortar retailers are forced to change the way they do business to keep up with ever-changing customer needs. This is usually attributed to the so-called “Amazon effect,” the continual disruption of traditional retail sales by the online e-retailer.
- Continual Improvement And Disruptive Technology. While Amazon’s delivery drones haven’t yet taken off (they’re still in testing) it’s still a game-changer for “final mile” package delivery. Additional tech like the Internet Of Things (IoT), artificial intelligence (AI), cloud-based functionality, and autonomous vehicles (especially long-haul trucks) are poised to take 3PL to the next level. New generations of hardware, software and middleware, and continuous improvement added into the mix provide another level of improvement.
Even though 3PL is currently benefiting from the robust US economy, the industry is predicted to reach $1.3 trillion worldwide by 2024.
Let 3PL Worldwide Is Your Supply Chain Partner
When it’s time to outsource all or part of your supply chain, 3PL Worldwide can offer your company a full range of logistical services. We also offer additional services such as a call center, bi-coastal warehouse space in Southern California and Connecticut, as well as transport nearly anywhere. We’re based in Southern California but work with customers nationwide. We’re ready to help, so contact us today at (877) 444-0002 or use our online contact form.