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The pandemic sparked a 77% increase in e-commerce over February 2020, as online shoppers of all ages turned to e-commerce for ease, convenience and safety. To meet these logistics and fulfillment demands, third-party logistics (3PL) providers had to prove agility, adaptability and flexibility more than ever before. In this post-pandemic balance of 2021 and beyond, leaders face a fragile supply chain, an ever-increasing and demanding customer, as well as B2B e-commerce occupying a massive market share.

In 2020, e-commerce jumped to 21% of the country’s retail sales. Some industry experts theorize the pandemic accelerated the shift to online by roughly five years. Revenue from e-commerce in USA amounted to 431 billion US dollars in 2020. The Statista Digital Market Outlook estimates that in the next four years, revenue will increase to 563.4 billion dollars.

The supply chain and logistics industries are exploding right now while also being in the midst of a dramatic digital transformation. As of 2017, the logistics industry was valued at a staggering $8.1 trillion, but it’s projected to nearly double that valuation by 2023. Digital giants like Amazon, along with a whole host of startups, are exposing entirely new business models and using emerging technologies like blockchain, AI, IoT and many others to change the face of logistics going forward.

From self-driving trucks and virtual assistants to robotic-powered warehouses and drone delivery, AI enablement will change the face of logistics. It’s also a race to acquire these capabilities. According to IDC, “By 2023, driven by the goal to embed intelligence in products and services, one-quarter of G2000 companies will acquire at least one AI software start-up to ensure ownership of differentiated skills and IP.”

The Covid-19 pandemic has not slowed but accelerated digital transformation in logistics, which has already drawn large sums of venture capital and private equity. According to McKinsey, around $11.1 billion was created by startups offering last-mile delivery services to retailers and individuals. The global pandemic has had pervasive and deep impacts across material availability, labor support, asset tracking and security of logistics services.

With 93% of shippers and 98% of third-party logistics firms feeling like data-driven decision-making is crucial to supply chain activities and 63% of the largest and most impactful logistics organizations saying investment in predictive analytics is optimal to organize newly digitized fleets, it’s easy to say that data is the competitive differentiator.

CBRE Research showed that “$1 billion in incremental e-commerce sales generates 1.25 million sq. ft. of warehouse space demand.” This means net absorption is predicted to go up, reaching nearly 250 million square feet in 2021. For context, the previous five-year annual average for net absorption was 211 million square feet.

Analysts at Gartner wrote, “The global 3PL community is working hard to exceed customer expectations by working smarter and better leveraging their knowledge, assets, people and technology. Organizations that have dedicated supplier innovation and continuous improvement programs must also use these to engage with the broader 3PL community to maximize uptake of innovation and gain exclusive access to innovative solutions.”

For 3PLs to grow, they must emphasize what they do best and reinforce why the alternative is best for new clients. 3PLs allow manufacturers the ability to adjust to increasing seasonal spikes, which have never been more significant. Only when fulfillment demands are met can a manufacturer plan for exponential growth.

Every 3PL executive who understands the sales growth must interface with clients who leverage software across the warehousing campus for a competitive advantage. Acknowledging solutions to address the fact that supply chains are fraught with complexities also represents an opportunity to improve efficiency.

3PLs have been ahead of the curve in a wide range of technology solutions, particularly AGVs (automated guided vehicles). The assortment of products and clients made the cost-justification easier. Until recently, such technology meant long and expensive installations, many of which failed to deliver on their promises. Now in a matter of months, an AGV is up and running performing the work of hard-to-find fork truck drivers. The AGV has come of age, and in an aggressive B2C e-commerce environment, it’s a lifesaver.

3PLs offer a solution to run a tighter, more resilient operation, improve KPIs/customer satisfaction and reduce costs in warehouse operations.

TMP’s role

TMP focuses on the customer journey from start to finish, including the digital and physical management of products. TMP is able to provide around-the-clock service and support regardless of the ebbs and flows of traffic. This planning and preparation by TMP helps alleviate the stress of the client’s team and free the business of costly space requirements.