Supply Chain and Technology Trends for 2020
Third-party logistics (3PL) is an industry that is rapidly on the rise as companies look to increase the efficiency of their supply chains by allowing someone else to handle the logistics for them. In fact, 3PL revenues are projected to exceed $1.1 trillion in 2020.
Here are the biggest 3PL trends to look out for in 2020.
Overall Use of 3PL Companies is Continuing to Grow
More and more companies are utilizing the services of 3PL firms. In the last two decades, Fortune 500 companies using 3PL services grew from 46 percent in 2001 to 90 percent in 2018. In addition to the added value provided by businesses in the 3PL industry taking care of the shipping logistics for a business, many 3PL companies have advanced transportation management systems which only enhance their clients’ business and shipping operations.
The Basic Definition of “3PL” is Ever-Changing
When 3PL businesses were first emerging, they were largely viewed as a way to “export” the shipping needs of your business to someone else. The 3PL firm would procure the trucks to get the freight where it needed to go.
This is no longer the case. As the technology continues to evolve, 3PL companies can do more and more to add value for their clients. From transportation management and all aspects that come with it — real-time tracking, route and load optimization, and driver management all included — 3PL is no longer just in charge of “getting the trucks,” and their role will continue to expand in 2020.
The Emergence Automation and Artificial Intelligence
A major technology trend across many industries in 2020 is Artificial Intelligence (AI). The 3PL industry is a prime candidate when it comes to the benefits of AI. An industry typically slow to adopt new technology, 3PL is slowly but surely coming into the “digital age.” Embracing new technology like AI is the key to staying ahead of the competition. The companies that implement AI the quickest will make giant strides and experience major growth.
There are enormous implications for quickly gathering and evaluating huge amounts of data for 3PL companies. Artificial Intelligence can be used for sourcing materials, inventory decisions, warehouse management, transportation, and more. Specifically, AI can evaluate transportation data to help companies consolidate shipping to save money.
By involving automation into a 3PL business, the benefits of better workflow include faster execution and fewer mistakes, all while improving overall operational efficiency. The main goal of a 3PL business is to increase efficiency for a client, and one of the best ways to do this is through automation.
Capturing the Use of “Big Data”
Big Data is a “big miss” for small and mid-sized companies. Larger companies are actively harnessing data from a wide variety of sources including e-commerce sites, customers, vendors, cash register, and social media because they recognize it as the lifeblood of their future business strategy.
Google, Amazon, and Facebook have all figured it out. Small companies will need to figure out how to tap into this pipeline of information or they will be fighting an uphill battle. Regarding the 3PL industry, big data results in more efficiency and cost savings, less variation, more responsibility, and a better understanding for increased production.
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