For brand owners and operators, here's my 2024-2025 3PL state of business health prediction and how I refuse to get on that bandwagon.
E-commerce and the economy in general are downward trending. Many 3PLs are losing volume due to natural customer attrition and a downward-trending economy.
3PLs are proposing pre-2020 rates. Post 2020, unfortunately, and factually, insurance, lease, employment cost, hardware, software, and materials have all increased in cost by as much as 50% in many categories, unlike the published B.S. 8%.
3PLs proposing ridiculously low numbers will realize unprofitable results in the next 6-12 months. 2-3 things will happen then:
1?? 3PLs will reduce attention/service on unprofitable accounts because they'll realize their numbers in a few months.
2?? Service will suffer from the brand's perspective creating a never-ending loop of "3PLs suck" because of outsourced 3PL customer service, staff reduction, and skipping vital receiving and inventory management processes.
3?? The 3PL will part ways with the brand, or the brand will look for a "better" 3PL to move to.
It's VERY important to realize that both brands AND 3PLs contribute to this unfortunate, tainted, 3PL reputation of "3PLs suck" in general.
Dear Brands, sorry but not sorry; you get what you pay for. My 3PL friends, let's be more realistic. Every industry has experienced cost inflation, including the 3PL industry, by A LOT, but the proposals are deflating. I love hearing, "We apply economies of scale, we renegotiated this/that, and our process has improved by X%." Sure, all small marginal stuff. Comparatively, Brands want to hire a VP of Operations at the cost of an Operations Coordinator and expect experienced VP-level results.
Sales tactics will always lure and convince. Operations will show what's real.
I left a VERY successful career to scale my operational abilities and amplify my work across many brands out of a passion for operations management and leadership. I always say, "Fulfillment is a byproduct of operational excellence!" As long as I lead Ops Engine, we will always:
- Stand by high-quality work and dedication, treating each brand like ours!
- Propose realistic numbers that are mutually feasible and beneficial, yet a fraction of the cost compared to running your own warehouse.
- Provide unmatched qualitative experience, including training the brand's internal operators on best practices, reducing manual input/work through standard workflows and processes, and hyper attention to detail, almost OCD levels.
I don't know how to do it any other way! I don't know how to train any other way! Always going ABCD (see previous video), thinking in solutions, and resolving growing pains for brands.
A successful Brand x 3PL partnership = personal and product connection, strong operational experience beyond "portfolio."
Operations = A way of life!