Post Covid Changes in Logistics & 3PL Industry

 

Around the world the term “3PL” (third-party logistics) is encompassing a wide range of services and shipping solutions. These solutions include the likes of Less than truckload (LTL) and truckload brokerage, intermodal, transportation management, freight forwarding, value-added logistics, warehousing, reverse logistics and final-mile. 3PLs also service a wide range of businesses, both large and small. But the main takeaways are that not all 3PLs provide all services, and for every facet of the supply chain, there are 3PLs that offer shipper and carrier solutions.

For the emerging trends within the industry it is difficult to separate “current trends” and “technological trends” within the standard and third-party logistics space. The e-commerce trend is driving faster, more efficient shipping, high inventory turnover and inventory staged in forward locations near consumers. There has been a huge influx of 3PL providers to help support this incredibly complex supply chain, providing a wide range of service. As a result, ecommerce has amplified the importance of the supply chain function in almost every business that ships physical goods, while many others are looking to 3PLs to outsource the function. 

The impact of COVID-19 and how it is transforming the logistics and 3PL industry

The shock to international supply chains since the pandemic broke out has been unparalleled. In April, global air freight capacity was down 38.7% year-on-year as passenger flights were taken out of commission, causing air freight rates to surge.

Since the outbreak of COVID-19, the pandemic has certainly been testing the global supply chain, highlighting the importance of innovation. It’s not only about improving supply chain resilience, it’s also about driving innovation at the same time. Companies that double down on innovation now will maximize their chances of emerging from the pandemic in good shape. As a result of the pandemic, we have seen the deployment of robotic process automation (RPA) and autonomous vehicles for moving and storing products accelerate further. Warehouses that use robots may not only be more efficient but might be less likely to shut down if workers get sick.

The future of 3PL logistics in a post COVID-19 world

This has been the most difficult shipping environment for supply chain and logistics professionals in our observed history, but as an industry, it’s continuing to produce and deliver the essential goods that it needs to survive.

Technology has a key role to play here. Advanced data analytics will prove pivotal in helping firms gain more visibility into their supply chains and better mitigate anticipated disruption. When dealing with primary suppliers, it’s important to properly understand where they source from and any supply chain risks associated. This may mean diversifying your supply chain by proactively developing relationships with alternative manufacturers, allowing you to shift operations more quickly in response to disruption.

It concludes that while we are in the depths of one of the worst economic environments in modern history, we will recover, and we don’t believe it will be in the distant future.

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