3PL Central: 2022 Third-Party Logistics Industry Report

3PL Central has released the "2022 Third-Party Logistics Industry Report". Before the COVID-19 pandemic, many people took the supply chain for granted. In fact, many people didn't have much impression of the logistics industry. Now, manufacturers, warehouses, transporters, distribution centers, and retailers are mainstream topics. Times are changing, and so are supply chains.

1. Supply chain disruptions continue

Supply chain disruptions are not over yet. The Secretary of Transportation predicted that supply chain issues facing the United States will continue until 2022, citing demand as the largest contributor. The Ports of Los Angeles and Long Beach, which account for 40% of shipping containers entering the United States, have begun 24/7 operations to alleviate supply chain bottlenecks.

2. The rise of omnichannel fulfillment

Omnichannel fulfillment may be one of the biggest buzzwords of 2021. Pre-pandemic, 3PL Central was focused on the diversification of e-commerce, especially B2B suppliers taking advantage of the rise of online shopping. This surge is expected to continue through 2022, with retail e-commerce revenues expected to reach $502.5 billion.

Improving profitability requires considering distribution through multiple channels to remain competitive, making omnichannel fulfillment one of the biggest opportunities for companies looking to grow their business and scale.

3. The evolution of 3PL and 4PL services

The rapid changes in the market have made it increasingly difficult for many companies to navigate the intricacies of the supply chain. This has led many businesses to look to outsource their logistics needs to third-party logistics warehouses and transportation providers. In 2021, 40% of 3PL users' total logistics expenditures were related to outsourcing. This growth is largely directly related to the rise of the e-commerce industry. The global third-party logistics market is expected to be worth $1.1 trillion in the next six years. This will leave a lot of room for development for the 20,605 3PL companies in the United States.

4. Supply Chain Technology Transformation

Warehouse Management System (WMS) software once again topped the list of most implemented technologies by 3PLs at 84%. The top reason for implementing a WMS is the need for real-time inventory tracking and management (81%). Leveraging WMS technology is not new for businesses looking to improve their operational capabilities. However, there seems to be a digital transformation taking place in the supply chain toward cloud-based technologies. The WMS market is expected to reach $8.1 billion by 2028.

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