Within a short span, the logistics industry has made tremendous progress. Though innovations have always been an inevitable part of the industry, things only accelerated in 2020.
Customer expectations regarding timely home delivery, constant tracking, and personalized services became more stringent. Top giants like Amazon and eBay have set the bar too high, especially with delivery solutions like next-day and last-mile deliveries.
As the last-mile delivery network becomes more diversified, with Amazon bolstering its in-house logistics capabilities, other companies (both small and large) are compelled to outsource competitive logistics services.
So, what key trends is the 3PL industry looking up to in 2023? This article will talk about the top trends to keep an eye on for this year and beyond.
1. Last-Mile Delivery as the Game-changer
The global last-mile delivery market is growing at a CAGR of 16.7%! No matter the distance, customers are expecting their products to be delivered within 3 to 5 business days. However, even this bar is low when compared to the latest same-day delivery options.
3PL partners will need to increase labor towards a solid last-mile delivery strategy in 2023 and beyond. They are facing the massive challenge of pleasing customers who will abandon a cart simply if the estimated delivery time is too long.
This is why companies like Red Stag Fulfillment ensure a same-day pack and pick-up, where the customer receives the “Your order is shipped” email the same day. The industries where last-mile delivery needs are growing the most include food and beverage and pharmaceutical drugs.
2. Higher Demand for Analytics from 3PL Providers
More and more customers are looking for accurate, real-time updates on their orders. This gives them a sense of peace and assurance that the order will be delivered on time, preferably earlier.
Even companies receive an end-to-end view of their supply chains. So, 2023 is a year to solidify supply chain capabilities through real-time data analytics. Besides customer convenience, analytics of customer buying patterns are needed to maintain proper inventory stock.
It is also useful in offering robust last-mile delivery. For instance – A UPS truck heads to downtown New York with a GPS sensor. The driver stops at their destination, parks the vehicle, and carries the package on foot to complete delivery. The GPS on their phone continues streaming data.
The package is successfully delivered a few minutes later. Everything, right from the delivery time to customer review, can be recorded. This will help companies optimize future deliveries. It’s a win-win situation for the company, the customer, as well as the 3PL provider.
3. Urban Order Fulfillment Centers
A Capgemini delivery innovation report made the shocking disclosure that at least 55% of customers were willing to switch to a competitor brand in case of slow order fulfillment. This is why 2023 will see a hike in urban order fulfillment centers.
An urban order fulfillment center acts as a storehouse close to the customer for faster delivery of products. Though the idea behind it is intelligent, the execution may not be as easy. The main reasons are the high costs of real estate as well as the struggles involved in building a close-knit transportation infrastructure.
Tech Juggernauts like Amazon can make this possible due to their capacity for huge investments, but how will small and mid-sized businesses compete? Crowdsourced delivery services will help smaller retailers keep up with this 2023 trend.
4. Delivery Productization
At least from 2023 onwards, product delivery services are no longer an afterthought. In fact, they are turning into a powerful product of their own. This means brands that promise a faster and more accurate product delivery process hold a better chance over others.
This study found that customers are willing to pay more for same-day deliveries.
This is undoubtedly an evolution of what is called the Amazon effect. This is one company that has ended all scope for lackadaisical delivery approaches. Over the years, Amazon listened to its customers and offered what they needed – faster, safer, and more affordable delivery. The only difference today is that customers expect the same from every business in the market.
5. Greener Supply Chains
Another key trend that will impact 3PL services in 2023 and beyond includes a more sustainable supply chain. In a conscious consumer era, people are demanding faster, greener delivery.
NielsenIQ and McKinsey conducted a combined study in which they found that 78% of US consumers stated that a sustainable lifestyle was of utmost importance. As such, they favor brands that give importance to eco-friendliness.
Some ways that third-party logistics services are keeping up with the green trend include –
- Use of recycled and up-cycled materials for packaging
- Minimizing inventory as much as possible
- Optimizing transportation
- Discovering and dealing with pain points in the supply chain
- Keeping sustainability KPIs as the key focus
According to Gartner, the future of the supply chain hinges on four crucial shifts – an increasing human-centric design, the need for real-time decision-making, authentic sustainability, and commercial innovation.
Moreover, as the world gradually shifts towards a greener future, third-party logistics services would unleash electric fleets and carbon offsets. Uniquely positioned in the supply chain, 3PLs help build resiliency, meeting customer expectations through innovative technologies.
And with the key trends of 2023, they will only bridge existing gaps for faster and safer deliveries.