You may have noticed that the logistics and supply chain industry is going through a metamorphosis.
It’s not all in your head –– rising 3PL prices are caused by extraordinary demand, while capacity, infrastructure, and staff can barely keep up with the growth.
While the changes are overwhelming, it’s critical that companies learn about 3PL trends to adapt their logistics and supply chain strategies.
Learn about the top 2022 3PL industry trends to stay competitive!
Key 3PL and logistics trends
Capacity shortage will continue in 2022
3PL demand has been steadily increasing over the years, and the sad truth is that capacity still hasn’t caught up. With the overwhelming rise in shipping demand due to COVID-19, the race for capacity to catch up with demand isn’t looking too great.
Companies should expect to pay more to move packages –– with more and more companies scrambling to get a spot on air freight.
To stay competitive, companies need to prioritize shipments and review how assets are being used.
Plan for a talent shortage
In 2022, expect 3PL to start hiring more logistics professionals to keep up with the latest logistics and supply chain technologies.
Aside from demand from supply chain professionals, there’s also a huge demand for drivers.
With the talent shortage, expect 3PL companies to start outsourcing logistics jobs. According to analysts, companies are likely to outsource these 3PL services:
- Domestic transportation
- International transportation
- Freight forwarding
- Reverse logistics
- Customs brokerage
- Freight bill auditing and payment
- Transportation planning and management
Carrier merging and acquisitions will intensify
The shortage in capacity and talent has encouraged global shipping carriers to acquire smaller companies to diversify their portfolio. At the same time, large shipping companies see M&S as a sustainable way to manage growth and increase efficiency and asset utilization.
With M&A activity, companies can mitigate risks and successfully optimize supply chain networks in light of rising demand. Businesses that deal with carriers interested in M&A should expect to see more diverse services and better supply chain management.
The Amazon effect
Thanks to Amazon’s comprehensive infrastructure and large-scale outsourcing efforts, it’s now possible to receive online orders in a short amount of time and at a minimal price.
With the rise in online shopping, more and more retailers and businesses are catching up on the Amazon Effect. To keep your business competitive, it’s critical to not only maintain an online presence but to adjust logistics and sales strategies to keep up with new buyer habits.
Expect to see eCommerce making big moves in improving delivery speed, capacity, and efficiency while reducing overall costs with the help of 3PLs.
With the rise of online shopping amidst the pandemic, Amazon set up some new restrictions for sellers, including reduced inventory storage.
Because of this, many online sellers and eCommerce businesses had to find an alternative platform to stay competitive.
Expect more sellers to join other online platforms and marketplaces in 2022. More businesses may also consider setting up their online store. Because of this, more industries will be looking to outsource fulfillment services from 3PL companies.
Last-mile logistics and micro warehouses
With increased demand, companies need to look for efficient strategies to get orders faster to customers.
Micro warehouses will start to pop up in 2022. These are small dedicated warehouses that are located close to customers, often in densely populated urban locations.
With micro warehouses, businesses can keep up with the rising demand for same-day and next-day deliveries. Ideal products for micro warehouses require minimal handlings, such as apparel or common consumer goods.
Rise of crowdsourcing and gig economy
To keep up with the massive demand for logistics services, more business owners are booking independent contractors and vehicle owners to make their deliveries.
Crowdsourcing is a fast and cheap solution to getting products to customers fast. With fewer supply chain services to choose from, it’s often the go-to last-mile logistics solution.
While this allows businesses more flexibility in increasing fulfillment capacity and speeding up services, there are downsides to hiring independent delivery drivers.
For one, businesses will have less quality control in shipment management. It may also be difficult to find contractors with tracking or insurance.
The green movement has also made its way into the logistics industry. In 2022, expect to see 3PL companies adopting more green logistics practices.
These include technologies that track and monitor the use of gas, heat, water, and electricity in facilities and warehouses. More companies may also look into software that will calculate the carbon footprint.
In terms of delivery, more 3PL will look into electric and solar-powered vehicles. Carriers and sellers will also be more interested in biodegradable packaging.
With the overwhelming rise in demand, 3PLs are looking into innovative technologies and systems that will improve scalability, efficiency, and overall productivity.
One of the most significant integrations 3PLs are warehouse management systems (WMS) that support real-time tracking and management of inventory.
Blockchain is another exciting technology that 3PLs are looking into. It involves integrating transaction information from multiple systems into a single platform. This will allow the different stages of the supply chain (carriers, logistics providers, shipping lines, and customers) to enhance visibility across the entire system.
Aside from increased visibility, the system will allow all parties to mitigate issues and risks before they happen.
With Blockchain technology, businesses don’t need to worry about giving customers real-time and transparent tracking updates. More than that, business owners will have the peace of mind that their products are protected and traceable.
Other necessary innovations include transportation management and scheduling, web portals, and electronic data interchange.
Rise of self-service platforms
As we’ve said, there is a rising trend in outsourcing with shippers and 3PL users.
With the increasing need for freight forwarding and domestic shipping, more businesses will trust freight shipping marketplaces as a convenient and cost-effective freight solution.
Online self-service platforms allow users to get a comprehensive overview of the most affordable carriers in their area.
Get in touch with GoShip.com for a free quote.