The world of supply chain and logistics management has transformed rapidly over the past few years. Disruption has been the name of the game since the pandemic hit in 2020, and third-party logistics (3PL) providers have been at the center of a shifting landscape.
Although the pace of 3PL gross revenue growth has slowed in the U.S. since its whopping 48.1% year-over-year increase in 2021, 3PLs continue to carve out more U.S. market share. Gross revenues grew 18.3% in 2022, the fourth-best year on record, according to data from Armstrong & Associates. 3PLs claimed the largest share of North American warehouse space for the first time, with 41% of big-box leases last year.
With such rapid growth and change, 3PL warehouses are under pressure to scale and adapt quickly. As labor and real estate costs rise, 3PLs must deploy storage and fulfillment solutions to maximize efficiency and make the most of their existing spaces.
Rather than jumping prematurely to a new warehouse or hiring more workers to fulfill orders within a preexisting but inefficient system, managers should consider dynamic storage solutions that can accommodate a wide range and sizes of SKUs and adapt as their business needs change. Unlike static storage, which limits layouts and picking options, dynamic storage solutions are uniquely suited to address the challenges facing 3PLs today.
With so many potential SKUs, a rotating cast of products and clients, not to mention the demands of omnichannel fulfillment, it has always been difficult for 3PLs to maintain consistent and efficient throughput. Four issues, in particular, have become especially pronounced in recent years.
Many 3PL warehouses struggle to manage storage space efficiently. Floor and shelf space is often wasted, and many facilities operate at over 90% capacity. This slows picking and fulfillment and often leads operators to prematurely seek additional space.
Accurate order fulfillment has always been critical for customer service, but it has become an absolute necessity in today’s 3PL warehouses. For instance, when planning for the holiday sales season, 40% of supply chain executives listed order accuracy as their top concern, citing issues like the costs of inflation, supply chain complexity, and more stringent customer expectations as primary drivers.
Labor shortages have been a major headline since the pandemic and continue to impact 3PL inventory management and fulfillment. As managers are forced to pay more for labor in a competitive market, efficiency becomes even more critical.
Seasonal surges affect any eCommerce business but can be especially challenging for 3PL warehouses. A massive influx of seasonal products and higher order volume puts a warehouse’s operational flexibility to the ultimate test.
These are some of the most prominent concerns for 3PL providers, but they’re by no means the only ones. Shifting regulations around product and storage safety, unique demands from specific clients, and the challenges of shipping and transportation logistics, create additional hurdles for effective inventory management for 3PLs.
These problems are exacerbated by many 3PL warehouse storage systems relying solely on static storage. While static solutions have their place in every warehouse, they can make for cumbersome fulfillment processes for many SKUs. In contrast, dynamic storage solutions allow for more adaptable storage and fulfillment. Here are just a few of the benefits of dynamic storage:
Implementing a dynamic system unlocks scalable storage solutions for 3PL warehouses, but finding the right partner is crucial to help you plan and design the ideal setup for your business. As an expert in space optimization, UNEX offers flexible storage options you can custom-fit to your warehousing and fulfillment needs. No matter how often your SKUs change or how your operations scale up or down throughout the year, our dynamic solutions enable you to adapt to fluctuating demands.
Here’s a look at a few of the best UNEX solutions for taking your 3PL storage strategies to the next level:
The beauty of dynamic storage is that you can mix and match solutions to suit your business’s needs. If your 3PL takes on a new client with unique storage demands, it’s easy to add more and customize your setup to accommodate them.
3PL storage strategies must be agile and scalable, able to adjust quickly to changing client demands or logistics challenges. By implementing dynamic storage solutions, 3PLs can maximize their warehouse space, increase speed and accuracy, and boost customer satisfaction while making the workplace safer for employees on the ground.
The 3PL landscape has never been more competitive, and companies prioritizing efficiency will stand out in a crowded marketplace. Don’t get stuck relying solely on static storage for your 3PL inventory management. Contact UNEX today to discuss the best dynamic storage solutions for your business.
