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Omnichannel strategies drove faster growth. 18% of 3PLs performing omnichannel fulfillment saw a 50% increase in profitability over the prior year, which is 33% more than the average of other 3PLs. Successful 3PLs started to focus. This year, many 3PLs found success focusing on their strengths. For example, more 3PLs specialized in specific industries, with 3PL warehouses serving 2.9 industries—down from 3.5 industries last year. Labor shortage compounded by increasing labor costs. 48% cite finding and retaining workers as a top business challenge that was also magnified by 79% of 3PLs stating that their labor costs increased in 2022. Connectivity-led 3PL technology investments. EDI (51%), shopping cart (48%), and marketplace (25%) integrations showed major jumps from prior years as top technology integrated with warehouse management systems (WMS). More than half of 3PLs fulfill orders in less than 90 minutes. To meet growing customer expectations, 60% of 3PLs fulfill orders less than 90 minutes after receipt, up from 53% last year. Further, the speed of order fulfillment is linked closely with annual order volume growth. Nearly one- third fulfill orders in less than 30 minutes, up from 22% last year. 3PLs focusing on functionalities that drive profitability. The top functionalities respondents plan on implementing in the coming year include billing and invoicing (32%) and mobile barcode scanning (27%). Top priorities include acquiring new customers, e-commerce growth, and automating processes.
CAPACITY FOR SAVINGS: Cooper Standard Automotive & EASE Logistics Cooper Standard Automotive, based in Northville, Michigan, and with operating locations in 21 countries, is a global supplier of sealing and uid handling systems and components. “I had a speci c need for additional carrier capacity on a high-volume lane between two dif cult markets, says James Sites, transportation manager with Cooper Standard Automotive Sites turned to EASE Logistics. From there, the two companies have partnered on more dedicated full truckload lanes and expedited business. Cooper Standard initially onboarded using emails only. As the relationship has grown, Cooper Standard and EASE have begun using EDI to transmit information between the two companies’ transportation management systems. Additional implementation steps included alignment of billing processes. The most important pillars in transportation are meeting the customers’ expectations at a competitive cost, Sites says. By partnering with EASE, Cooper averages a 98% on-time delivery rate, Sites says. In addition, over the seven years the two companies have worked together, Cooper has saved about $5 million. “Loads are transparent, communication is fast, the value is evident,” he adds. “With tens of thousands of asset-based trucking companies, it’s dif cult for any one customer to effectively manage all these relationships,” Sites says. “Working with EASE Logistics allows us to lter this landscape and leverage their capabilities to nd timely capacity and at a competitive price.” Cornerstones of this relationship are, says Ben eld of EASE, “effective and transparent lines of communication, and execution of shipments daily.” n
TOP BUSINESS CHALLENGES FOR 3PLs Managing Costs Growing Revenue Customer Retention Finding New Customers Finding & Retaining Workers Operational Eciency 30% 17% 28%
53%
48%
47%
41%
Technology Implementation & Integration Finding and Acquiring Warehouse Space Customer Communication and Requests Inflation SOURCE: Extensive Third-Party Logistics Warehouse Benchmark Report 14%
35%
25%
While many 3PLs expect the positive momentum to continue in 2023, the top three potential challenges they see on the horizon include managing costs (53%), finding and retaining workers (48%), and operational eciency (47%). Last year, operational eciency ranked as the largest challenge and has dropped slightly based on costs and labor concerns. The most dramatic increase year-over-year came from finding and acquiring warehouse space, which jumped from 21% in 2021 to 35% in 2022.
120 Inbound Logistics • January 2023
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