Third-Party Logistics Warehouse Benchmark Report

Where Does Your 3PL Warehouse Stand Against the Competition?

Welcome to the second annual Third-Party Logistics Warehouse Benchmark Report.

Using aggregated responses from 200+ logistics professionals who own or operate third-party logistics (3PL) warehouses, 3PL Central has created the first and only report 100% focused on the third-party logistics warehouse industry. Download the complete report for insight on 30+ industry-specific topics including analysis of best practices for growth opportunities, the labor shortage, technology integration, and trends 3PLs need to know to remain competitive.

Find highlights and 3PL industry trends below from each section of the report.

Growth Opportunities

Labor Shortage

Space Limitations

Technology Integration

Success Measurements

The 3PL Landscape

On average, 3PL warehouses serve 3.5 industries—up from 3.3 industries last year—showing that some are expanding and diversifying their offerings to service more industries. The largest industry concentrations include bulk goods, retail, and dry storage. Pharmaceuticals and nutraceuticals showed the most growth with nearly a 65% increase year over year.

industriesServed_horizontal_extraWide

Diversifying 3PL Services

Inventory management and order pick, pack, and ship remained the top services yet more warehouses are looking to extend their offerings in 2022. Download the full report for a complete list of fulfillment types and services that drive growth and profitability for 3PLs.

Growth Opportunities

This year marked a year of tremendous opportunity for most 3PL warehouses, with 71% indicating new customer acquisition and 48% indicating ecommerce ordering as primary drivers of their growth. Diversifying fulfillment types and new customer acquisitions showed the largest increases from 2020, while fulfillment of essential goods showed the largest decrease from 2020.

improved profitability

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Programs to improve profitability continue to be a priority for 3PLs in 2022—especially as levels of increased competition grow.

Learn more about what drove growth for 3PLs in 2021, including the top new business channels, the most pressing challenges faced by 3PLs, opportunities for improved profitability, and how to find the best opportunities for growth in 2022.

Labor Shortage

With finding and retaining workers ranking in the top three challenges for 3PL warehouses, labor emerged as a considerable area of concern this year. Nearly every supply chain publication has highlighted concerns about supply chain disruption and the worker shortage. It’s no surprise that this has impacted the 3PL warehouse industry severely. Fifty-seven percent (57%) of 3PLs cite that labor makes up 40% or more of their total costs, while 18% say it accounts for 60% to 75% of total costs.

Largest Warehouse expenses

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Costs for rent, lease, or facilities compound the concerns around warehouse capacity. With warehouse space making up the single largest expense for most 3PLs, adding space can take a toll on the bottom line—especially as rent costs have gone up an average of 2.5% in 2020.

Learn more about what 3PLs ranked as their largest expenses by downloading the complete Third-Party Logistics Warehouse Benchmark Report.

Space Limitations

Last year, warehouse real estate dropped to near all-time low vacancy rates. Compounded with increasing lease and purchase prices, this leaves many 3PLs struggling to find space to expand. Concern about warehouse space limitations has continued. This year, 45% of 3PLs identified adding warehouses in new locations as one of the most significant opportunities in the coming year, while 21% identified finding available warehouse space as one of their biggest challenges.

Warehouse Capacity Challenges

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With increasing ecommerce volumes pushing more volume through 3PL warehouses, 3PLs have become strapped for warehouse space and capacity. Find out what warehouses are doing to address capacity limitations.

See how your warehouse capacity compares to other similar warehouses..

Technology Integration

As the 3PL warehouse industry continues to grow and service more order volume every year, technology adoption and integration have become even more important. Volume increases, compounded by the challenges in the labor market, have led to greater adoption of technology to reduce manual workloads and enhance process efficiencies.

This year, warehouse management systems (WMS) ranked as the most (84%) implemented technology
for 3PLs, followed by mobile barcode scanning (53%) and order management system (52%).

leveraging WMS technology

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While WMS software offers significant benefits to 3PLs, many are using integrations to help with increased order volume, expand their system reach, and provide a better customer experience.

Download the full report to learn how much time your competitors saved using a WMS and what other technologies they implemented or are planning to implement in 2022.

Success Measurements

As consumer demand puts pressure on companies to offer more same and next day delivery options, that pressure passes on to 3PLs to expedite their pick, pack, and ship processes—making time to fulfill crucial. In fact, 53% of 3PLs fulfill orders in less than 90 minutes.

Seventy-two percent (72%) of participants who reported fulfilling orders within 30 minutes experienced medium to high profitability growth, indicating a high level of optimization of their processes.

Improve performance visibility

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As the third-party logistics industry scales to support increasing volumes and rising consumer expectations, understanding the metrics and measurements that drive success has become even more critical.

Download the complete report to compare your performance and metrics for revenue, order volume, worker productivity, and operational costs.

Conclusion

This year marked a unique time for 3PL warehouses—both an exciting and challenging time. Exciting because 3PLs overwhelmingly grew order volumes, profits, and customers. Challenging because most 3PLs were operating at or above warehouse capacity and couldn’t find new space as a result of some of the lowest warehouse vacancy rates in history, unending supply chain backlogs, and a workforce shortage that left many with higher labor costs and fewer people to address the higher volumes.

Despite these challenging dynamics, 3PLs have thrived, innovated, and diversified to support growth and harness the market opportunity. From building out more robust training and talent management programs to optimizing warehouse space, building out 4PL networks, and implementing new technology, this induvstry has shown that it can and will evolve as new market dynamics arise.

In conclusion, the outlook for 2022 remains optimistic for both customer acquisition and order volume growth. By implementing the best practices recommended above and focusing on continuous improvement, 3PL warehouses can build long-term scalability to position themselves for growth, success, and greater profitability.

Download the Full Report

About 3PL Central

3PL Central is the leader in cloud-based warehouse management system (WMS) solutions built to meet the unique needs of the 3PL warehousing community. Serving as the backbone of our customer's operations, our platform quickly transforms paper-based, error-prone businesses into service leaders who can focus on customer satisfaction, operate more efficiently, and grow faster. Offering a comprehensive warehouse management platform, we make it easy for 3PLs to manage inventory, automate routine tasks, and deliver complete visibility to their customers. As the proven industry leader for over a decade, 3PL Central accurately manages billions of dollars in inventory and processes more than 1 million orders a week from any of our customer’s and their customers’ systems.

Interested in learning how 3PL Central can help your warehouse implement a comprehensive WMS platform and share our expertise in building best practices across your warehouse in 2022?