3PL and Distribution: Key Trends and Challenges to Know

Third-party logistics revenue is growing at twice the rate of the US economy as a whole! 3PL revenue was estimated to be $727 billion in 2014, and it has only increased since then

Fremont, CA: Logistics has always been a critical component of any economy and business. However, because of globalization, many companies have outsourced their logistics functions to third-party (3PL) companies.

Six Significant Challenges in Third-Party Logistics and Distribution

Despite the massive growth of the 3PL industry, 3PL companies face several challenges when serving customers worldwide. Some of them are mentioned below:

Finding New Employees

This is one of the most pressing issues confronting the 3PL industry right now, and it requires immediate attention.

Most businesses complain that it is difficult to find qualified candidates for open positions.

A lack of qualified candidates leads to a loss of efficiency and productivity, and the 3PL industry has traditionally been a high-churn operation.

Inadequate Reporting Systems

They keep track of all shipments sent out in a mid-sized 3PL provider company. The task of asking vendors about shipments to create a monthly statement is a dreadful one. These tasks will be significantly simplified if a proper reporting system is in place.

A Greater Emphasis is Placed on Rules and Regulations.

Because most 3PL companies ship goods to multiple countries, they must adhere to the shipping regulations of each country and region. Each country has its own set of laws and regulations, and these businesses must stay up to date on all of them to continue trading without incident.

Lack of Cooperation

Although transportation providers and carriers play an important role in supply chain operations, management frequently overlooks the mundane aspects of physical distribution and transportation. The lack of collaboration among shippers, pages, and end customers can harm the supply chain's smooth operation.

Inadequate Infrastructure

This is a significant challenge for 3PL companies in most of the world's developing countries. Some of the issues encountered include poor road conditions, poor connectivity, insufficient air and seaport capacities, and a lack of advanced modes of transportation such as railways, roadways, and an inland water transport system.