Demand for third-party logistics companies has been growing as the consumer market expands globally, and there are no signs of that trend stopping anytime soon.
As we close out 2019 and approach 2020, here are 5 trends that are driving the growth of 3PLs:
Uncertainty over Government Funding
The year 2019 dawned with the United States in the grips of the longest government shutdown in history. This left many shippers scrambling to find reliable, compliant logistics if they worked with government entities.
As the lengthy shutdown showed, shippers always need another option for getting their goods from one place to another. Many who didn’t have a backup before now have backups, or have entirely switched to non-government logistics companies, increasing the demand on those private 3PLs.
Over the last several decades, businesses have increasingly become more globalized.
What was once a business limited by the bounds of its geographic area for sales has had the opportunity, as shipping and commerce have become more affordable, to grow into an international company.
As more business has moved online, the opportunities for globalization have only increased, making small retailers more reliant on 3PLs that have that capacity and capability to quickly move goods from one side of the ocean to another.
Need for Increased Transparency
More and more often, consumers are questioning the ethics and practices of the businesses with whom they spend their money. This has meant there’s an increased need for transparency in business operations, including how goods get from one place to another.
For many small businesses, putting the software in place to gather this level of transparent data is cost-prohibitive. However, a 3PL is able to scale their practices and software to meet the needs of individual clients.
They’ve already purchased the software necessary to gather the important data consumers want, and your business gets to use that software for a much lower price. You give your customers what they want to see without breaking your budget.
Demand for Sustainability
Along with ethical data use and collection, many consumers want to know that the companies they’re doing business with are good stewards of their resources. From recycling materials to optimizing delivery routes, companies that don’t make at least an effort to be sustainable will be left in the dust.
Because of their economies of scale, committing to sustainable practices is much easier for a 3PL than for an individual company. If a 3PL can combine the shipping routes of two or more customers, they’re saving energy and money, keeping them in eco-conscious customers’ good graces.
Changing Delivery Methods
Gone are the days where “delivering” a good was just taking a truckload of products to a store where customers came and shopped.
Now, customers want to have multiple options in how they receive delivery. Whether they choose fast, next-day delivery, slower freight options, or even buying online and picking up in-store, each of these methods provides its own unique set of challenges.
Because 3PLs have access to a larger talent pool, they can more capably and affordably respond to these new customer requests than can a small business trying to do it all on their own.
Skilled Logistics Planning & Management on the East Coast
For more than 30 years, Cannon Hill Logistics has helped businesses across the globe reach new heights. Whether you need someone to help get your products from Point A to Point B or you want to hand off all your logistics and warehousing needs, we’ve got custom solutions to help you achieve your business goals. Get your customized quote today!