Skip to content
Search AI Powered

Latest Stories

85% of 3PLs have grown order volumes in 2021

But a worker shortage and rising labor costs are creating headwinds, tech firm survey shows.

store-g46f6f1815_640.jpg

Third-party logistics (3PL) warehouses have overwhelmingly grown order volumes, profits, and customers this year, but labor challenges and tight market conditions are creating headwinds, according to a survey by warehouse management systems (WMS) provider 3PL Central.


The tech firm’s most recent Third-Party Logistics Warehouse Benchmark Report reflects input from more than 200 3PL warehouses and builds on previous data to provide year-over-year changes and information on trends to help warehouse professionals understand market growth opportunities and challenges facing the industry, according to 3PL Central.

Among the report’s findings, 85% of 3PL warehouses experienced order volume growth this year, with 23% reporting growth of more than 50%. At the same time, 3PLs are operating at or above warehouse capacity, with some of the lowest warehouse vacancy rates in history, alongside significant supply chain backlogs and a workforce shortage that left many with higher labor costs and fewer people to address the higher volumes. Nearly 50% of respondents said they are struggling to find and retain qualified workers while also facing “significantly increasing” labor costs.

Many respondents said they are turning to technology to address the challenges. Eighty-four percent of 3PLs said they have implemented a WMS as the central hub of technology for their business, with the average 3PL having three or more systems integrated to their WMS, including shopping carts, marketplaces, order management systems, and the like. More than half of respondents (53%) said they fulfill orders less than 90 minutes after receipt, with speed of order fulfillment linked closely with annual order volume growth, the survey also found.

Despite the challenges, 3PLs surveyed said they are optimistic for 2022.

“Looking at year-over-year data, the labor shortage and warehouse capacity limitations have become more acute issues for 3PL warehouses,” Rachel Trindade, chief marketing officer at 3PL Central, said in a statement announcing the report’s findings. “Respondents show how they have addressed these concerns with automation, technology, and system integrations.”

The Latest

Artificial Intelligence

AI: Is it the real deal?

More Stories

Logistics economy picked up speed in January

Logistics Managers' Index

Logistics economy picked up speed in January

Economic activity in the logistics industry expanded in January, growing at its fastest clip in more than two years, according to the latest Logistics Managers’ Index (LMI) report, released this week.

The LMI jumped nearly five points from December to a reading of 62, reflecting continued steady growth in the U.S. economy along with faster-than-expected inventory growth across the sector as retailers, wholesalers, and manufacturers attempted to manage the uncertainty of tariffs and a changing regulatory environment. The January reading represented the fastest rate of expansion since June 2022, the LMI researchers said.

Keep ReadingShow less

Featured

Disrupting the furniture supply chain: An interview with Jay Rogers

Disrupting the furniture supply chain: An interview with Jay Rogers

As commodities go, furniture presents its share of manufacturing and distribution challenges. For one thing, it's bulky. Second, its main components—wood and cloth—are easily damaged in transit. Third, much of it is manufactured overseas, making for some very long supply chains with all the associated risks. And finally, completed pieces can sit on the showroom floor for weeks or months, tying up inventory dollars and valuable retail space.

In other words, the furniture market is ripe for disruption. And John "Jay" Rogers wants to be the catalyst. In 2022, he cofounded a company that takes a whole new approach to furniture manufacturing—one that leverages the power of 3D printing and robotics. Rogers serves as CEO of that company, Haddy, which essentially aims to transform how furniture—and all elements of the "built environment"—are designed, manufactured, distributed, and, ultimately, recycled.

Keep ReadingShow less
chart of GenAI effect on workforce

Gartner: GenAI tools create anxiety among employees

Generative AI (GenAI) is being deployed by 72% of supply chain organizations, but most are experiencing just middling results for productivity and ROI, according to a survey by Gartner, Inc.

That’s because productivity gains from the use of GenAI for individual, desk-based workers are not translating to greater team-level productivity. Additionally, the deployment of GenAI tools is increasing anxiety among many employees, providing a dampening effect on their productivity, Gartner found.

Keep ReadingShow less
warehouse worker driving forklift between racks

German 3PL Arvato acquires two U.S. logistics firms

The German third party logistics provider (3PL) Arvato this week acquired the U.S.-headquartered companies Carbel LLC and United Customs Services, saying the move would grow its client base, particularly in the fashion, beauty, and lifestyle segments.

According to Arvato, it made the move in order to better serve the U.S. e-commerce sector, which has experienced high growth rates in recent years and is expected to grow year-on-year by 5% within the next five years.

Keep ReadingShow less
photo collage of warehouse tech

Supply chain pros are wary of inflation and labor woes

The top worries that supply chain leaders hope to address with new innovations this year include inflationary concerns (68%) and labor shortages (50%), according to a survey on innovation from the third-party logistics provider (3PL) Kenco.

And many of them will have a budget to do it, since 51% of supply chain professionals with existing innovation budgets saw an increase earmarked for 2025, suggesting an even greater emphasis on investing in new technologies to meet rising demand, Kenco said in its “2025 Supply Chain Innovation” survey.

Keep ReadingShow less