Why 3PL Will Become Mainstream

In a world that has rapidly evolved to become a global economy, where countries trade with each other more easily than one could have ever imagined, understanding supply chains has become more crucial than ever for businesses.

Businesses operate much differently than they did even just a decade ago; due to advancements in technology, the corporate world is ever-changing to become more efficient, more cost-saving, and more profitable.

Businesses have shifted online, and COVID-19 only accelerated this shift. Companies trade and deal with customers all over the world. For this, they need a stellar logistics network. Logistics link companies together to bring mutual economic benefit to them, and in 2018, the global logistics market was worth over 5.5 trillion Euros.

One important segment of the logistics market is 3PL, Third Party Logistics, which has been gaining popularity. In 201, the global 3PL market generated a revenue of 951 billion U.S.D., with China being a global leader.

One of the greatest benefits of 3PL is that it facilitates even small businesses and gives them access to tailor-made delivery and storage solutions. But that’s not all, here’s why 3PL will grow to trillions and become mainstream in the years to come:

An Expanding Manufacturing Sector

Across the world, and especially in Europe, the manufacturing sector is expanding. This is due to technological advancements in the supply chain that make processes easier.

The technological breakthroughs have improved operations and introduced more convenient functions such as warehouse management, real-time tracking, online documentation of freight, and so on.

All of these facilitate smoother business operations for the manufacturing industry, and this is likely to cause a rise in demand for 3PL services.

Rapid Globalization, eCommerce, and Increasing Consumerism

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The global economy, as a result of globalization, is seeing an increase in trade activities. Logistics operations are being improved with the introduction of software solutions such as ERP to monitor and track logistics tasks such as inventory tracking, etc.

Moreover, retailers are eager to enter the global market and access consumers all around the world. Due to increased competition, they want to provide increased value and enhanced customer engagement.

Additionally, the boom in eCommerce has made 3PL more popular as sellers in the eCommerce market who operate mainly online rely on their services to meet consumer demand.

For this purpose, 3PL logistics service providers are becoming mainstream as retailers and manufacturers alike want the geographic reach and ease of operations that 3PL provides.

Challenges in Logistics

Supply chains are difficult to manage. Without adequate training and knowledge in the field, it may be even more difficult. When running an online business, the major cost comes from logistics and maintaining profitability in an era when the online stream of business is changing so rapidly, requires insight and adaptability.

This, along with other challenges in logistics, are part of the reason why as online businesses expand and grow, so does the popularity of 3PL logistics services.

Increase in DTC Strategies

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Many of the manufacturers who relied on making bulk orders and shipping them in bulk to other manufacturers who sold them forward are realizing that they need to change their ways if they want to progress in the current eCommerce climate.

Customers are now buying directly online. They are adding items to cart off of websites, and shipping to their homes, expecting delivery within a few days. And this trend is here to stay.

Therefore, manufacturers are now adopting DTC, Direct to Customer, strategies where they must either handle shipping themselves from their warehouse, collaborate with online selling platforms, or partner with a 3PL.

The New Industry Landscape

COVID-19 has introduced a new industry landscape. More and more consumers were ordering online from the comfort of their homes, but due to COVID, there were also labor and cost efficiencies at the delivery end.

The loss of production time resulted in increased labor costs, and caps on capacity impacted distribution. On the other end, there was an unprecedented spike in the volume of orders as more and more consumers shifted online, many first-time users. Therefore, it became important to have an integrated inventory system to avoid customer dissatisfaction and order delays.

3PL Warehousing Solutions: The Future

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These are just some of the reasons why 3PL will become mainstream. 3PL ensures smooth business operations and is an adaptable and up-to-date solution to the rapidly changing world. It cuts costs and enhances efficiencies, as well as customer satisfaction.

Sourcing Companies and Agents in China

As we know, China is the global leader of 3PL operations and the hub of technological advancements.

eCommerce Express is a Chinese company that provides 3PL eCommerce order fulfillment services, 3PL warehousing, receiving, and inventory management, etc. to its clients around the world. Their experienced and trained personnel provide efficient and cost-effective order fulfillment services, as well as branded and custom packaging.

For more information, contact them today.

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