Third-party logistics (3PL) providers offer services to customers who have outsourced logistics for part, and sometimes all, of their supply chain management functions. According to a recent article by PYMNTS.com, gone are the days when 3PLs only distributed goods from the distribution warehouse to their respective stores. Today, the dynamic has shifted to include individual consumers, with items going directly to their homes.
The Changing Face Of 3PL
The dynamics of 3PLs are changing in other ways as well, with those focusing on brokerage now offering more value-added services. In fact, the big 3PLs have taken steps to move into the brokerage field to help supplement the higher-level services they offer.
In essence, both individual brokers and big 3PL companies are learning to adapt by broadening their services. Another trend is for smaller companies to be absorbed by larger 3PLs.
Mobile Technology Instigates Change
Also adding to this drive for change is the advent of tablets and other mobile devices in the booking process, effectively cutting out the middle man and the costs attached to them. And while this basically boils down to fewer choices for shippers, they should receive a higher quality of service as the bigger providers absorb the smaller 3PL companies and individuals who do not conform to the new way of doing business in the logistics field.
This consolidation of the 3PL market also leads to increased prices for services, according to Jett McCandless in a recent Forbes.com article. “Of course, fewer players with greater market power leads to higher rates, but that trend is already evident,” McCandless comments.
How Do These Changes Affect Value-Added Resellers (VARs)?
As 3PLs add more and more services to their repertoire of offerings, they could move into a part of territory mainly occupied by VARs or IT solution providers. The 3PLs evolving role will adapt as they seek other avenues of service offerings to try and entice customers in a more competitive market.
Solutions Providers can use the changing landscape for 3PLs to their advantage. The article in our archives, “Set Your Sights on 3PL Providers,” explains that along with dealing with another company’s inventory comes the need for 3PLs to track details of every transaction, such as shipping, receiving, picking, and packing. Data, analytics, management solutions, hardware, and infrastructure are necessary to accomplish the services they provide — creating opportunities for solutions providers.