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Home » 3PLs investing in WMS integration technologies, survey shows

3PLs investing in WMS integration technologies, survey shows

Logistics providers seek to protect business gains of 2022 as labor pool dries up, Extensiv research finds.

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October 27, 2022
Supply Chain Quarterly Staff
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Third party logistics providers (3PLs) have grown their revenues in 2022 even as they invest in new technologies to cope with stormy economic conditions and a questionable forecast for next year, according to a survey from Extensiv, an omnichannel software vendor formerly known as 3PL Central.

Ninety-one percent of 3PLs grew their order volumes in 2022, up from 85% the year prior. And 81% claimed higher profits this year, a slight increase from 79% last year, Extensiv said in its “Third-Party Logistics Warehouse Benchmark Report.”

They have also accelerated operations on the DC floor, with 60% of 3PLs fulfilling orders less than 90 minutes after receipt, up from 53% last year. And nearly a third fulfill orders in less than 30 minutes, up from 22% last year.

Some of that success came from an increased specialization in niche sectors, the study found. More 3PLs specialized in specific industries in 2022, with 3PL warehouses serving an average of 2.9 industries — down from 3.5 industries last year.

Despite those strong results, 3PL are wary of changing conditions, highlighted by a growing labor shortage. Extensiv found that 48% cited finding and retaining workers as a top business challenge, and 79% said that their labor costs increased in 2022.

To cope with those challenges, 3PLs are investing in new technology. Many businesses are improving connectivity through new integrations between their warehouse management systems (WMS) and EDI (51%), shopping carts (48%), and marketplaces (25%). And looking into next year, respondents plan on implementing new functionalities like billing and invoicing (32%) and mobile barcode scanning (27%) in pursuit of improvements like acquiring new customers, e-commerce growth, and automating processes. 

"3PLs spent significant time integrating shopping carts and marketplaces to optimize their businesses in 2022, and connectivity is a theme that will continue into 2023,” Rachel Trindade, chief marketing officer at Extensiv, said in a release. “We found it interesting that 3PLs generally remain optimistic as they continue in an uncertain economic environment. Fifty-three percent of 3PLs are concerned about managing costs next year and 25% are concerned about inflation. They plan to face economic headwinds by finding greater efficiencies.”

 

Warehousing
KEYWORDS Extensiv
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