The area of 3PL (third party logistics) has changed significantly in the past decade. Its growth has been tremendous, and the 3PL providers will only see further growth, especially with the advancement in technologies and mobile applications. The smart way of doing business will help the 3PLs to be more efficient in their operations, and will provide for increased customer satisfaction.
Just like in any other business, increased customer satisfaction will result in getting more customers. The forecast of the market growth for 3PL is as high as 15%. By the year 2020, 3PL will see a great demand to service the market, and the competition will be fierce.
There are a lot of things that are going to be crucial for the 3PL providers. Apart from providing a 24/7 service and competitive pricing, the day-to-day operations of a 3PL have to be accurate, and efficient as well. The only way a 3PL will be able to achieve this is if they embrace the new technologies available in the market, and adapt to it.
It is a fact that to minimize operational costs and labor costs, businesses/companies will outsource logistics to 3PLs. As far as a 3PL is concerned, its success will solely depend on its willingness to adopt to the future trends, both strategical and technological.
1. Increased cooperation between 3PLs and Shippers
3PL companies will heavily depend on the new technologies available to connect, collaborate, and communicate with the customers. There was a time when logistical companies very much depended on paper for recording data and for communication, not anymore.
Everything is in electronic mode nowadays. The electronic storage of the data and the electronic communication not only provides for quick and easy communication, but also for preserving the integrity of the data. In effect, you will be able to store your vital data safely, securely, and exchange it as and when required.
Inventory managed by the vendor, where the inventory of the buyer is monitored by the supply chain vendor for making resupply decisions as and when required, will be a common practice employed by even the smallest 3PLs, through portals that are web based and via access to the 3PL's systems.
2. Increased usage of mobile apps
There was a time when a customer had to be in the office or home to access his/her computer to order a product or check the status of a shipment. Not anymore. Mobile apps have changed the way of doing business. Everybody does everything on the go. By 2020, everything will be focused around agility via mobility. Mobile devices and efficient mobile apps will be commonplace, and they will be a part of all the 3PLs.
With the potential for Radio-frequency identification (RFID) enabled devices to store data/information so that the products carry information with them, potential customers will be able to place an order, as well as process freight shipments anytime, from anywhere. Just imagine the potential of a customer just logging into an app and finding out exactly where his/her shipment is. Increased customer service is another area that a 3PL can optimize with the help of mobile apps.
3. Implementation of advanced software and hardware devices
3PL companies will reap the benefits of investing in advanced software, and smart devices, that have the capacity to deliver a quick Return Of Investment (ROI). Software, like TMS (Transportation Management System), will not only help to save time and operational costs, but also help to reduce errors and inconsistencies. Voice recognition will be standard in the supply chain process, like freight tracking and stock inquiries.
Advanced speech recognition software will enable the employees or workers to communicate better with the WMS (Warehouse Management System) for improved stock recording, and reduce the training period of new joiners, thus providing for increased productivity.
4. Potential of Big Data
Big Data will have a greater impact in the logistics industry. The new age of Big Data will be embraced by the 3PLs as well. 3PLs will be making use of the Cloud-based technology. The cloud system will ensure that the 3PLs will not have to stop their business because of a natural disaster or something like that, they will be able to remain operational 24/7. It will also enable the clients to access their systems, which will in effect improve efficiency in areas associated with seasonal trends.
Data sharing will also help to trace an item in the supply chain. It is estimated that by the year 2020, the amount of big data in existence will have grown from 3.2 to 40 zettabytes. Data/information can be obtained easily, however, not all data/information is worth for the company. The idea for a 3PL or for that matter, any company, is to focus on their KPIs (Key Performance Indicators). Mastering the Big Data will help a 3PL to process the data/information to optimize its operation.
5. Globalization of the Economy
The economy of the world will be more integrated by the year 2020. This means the 3PLs will have to work on a larger scale, with a more pronounced global outlook. The supply chain process will get even more complex with operations extending all over the world.
This means that the 3PLs will have to be on top of their game to even be in the game. If a 3PL is willing to embrace the new technologies available in the market today, then it will have no trouble staying on top of the game, because technology is what is driving the world economy today. With the help of technology, you will be able to keep abreast with what is happening out there.
Just like every business sector out there, the 3PL industry will also face many challenges in the future. It is also a fact that by 2020, the 3PL sector will be seeing a massive growth, mainly down to the large expansion of emerging world markets. The change will happen quickly, as, over the coming years in the 3PL industry, a lot of acquisitions and mergers will happen. You will also be able to see the standardization in the expectations of a lot of clients (supply chain managers and Shippers).