Not a Third Wheel: Unveiling the Potential of Third-Party Logistics (3PL)
Welcome aboard Django Stars BizTech #9, embarking on a new informative logistic journey.?
This edition highlights the role of 3PL providers, with a focus on technology and the current industry picture. To make sure you don't miss out on future updates — check the ? Subscribe button at the top of the page.?
Once you're buckled up and ready, let's roll.
Reshaping Strategies with Innovative Tech?????
The Global Third-party Logistics (3PL) Market, valued at $1.5 trillion in 2022, is expected to grow at a 9.9% CAGR through 2028. This expansion is fueled by the e-commerce surge and the 3PL model's efficiency in asset utilization.
Shippers benefit from lower transportation rates and easier capacity access, yet face challenges like inflation and labor market pressures. According to Inbound Logistics, there's a notable shift in shippers prioritizing service quality over cost in 3PL partnerships, with poor service being a major factor for termination.
3PL providers are adapting to evolving demands by expanding their services, especially in last-mile delivery and warehousing. In particular, their primary challenge this year is investing in technology to streamline operations and leverage data for competitive advantage. Their second major challenge is managing rising operational costs and securing capital, indicating a greater struggle with business expenses compared to their customers.
Inside Django Stars: Reasons to Celebrate
→ We're excited about our partnership with WasteHero , enhancing household waste removal through their innovative platform that supports municipal services in efficient resource management and route optimization. ?? Contributing to improved urban living and sustainability, our joint international team looks forward to sharing the positive impact of this collaboration.
→ In his new article, UI/UX expert at Django Stars, Sergey Gladkiy , explores a unique TMS concept from his Behance portfolio, highlighting his creative approach ?? to making logistics management intuitive and user-friendly. This piece is a must-read for anyone interested in the convergence of design and logistics technology, demonstrating how UI/UX principles can simplify complex systems.
→ Warm season's greetings from the Django Stars team to our valued clients and friends. Reflecting on the year's end, we're thankful for your enduring support and partnership through both challenges and successes. Wishing you joyous holidays and a New Year filled with promising opportunities and continued growth. ? Happy Winter Holidays!
Blog Highlight: Effective Ways of Connecting Shippers and 3PL Providers
In 2022, 56% of US shippers used third-party delivery management systems, primarily for domestic shipping, warehousing, and freight forwarding. Most of them call their relationships with their 3PL providers successful. Of course, the process of connecting shippers and 3PL providers is under constant transformation and has its challenges, such as matching supply and demand, managing supply chains, and adapting to market changes. However, there are tangible benefits of 3PL in effective partnerships, including cost savings, expertise, scalability, and improved customer service.
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In his comprehensive guide, Serhii Kubrak , Backend Competency & Tech Lead at Django Stars, outlines how to establish secure and efficient partnerships between shippers and 3PL providers. He discusses the steps for choosing the right 3PL provider, explains the differences between connectivity methods like EDI, e-AWB, and API, and highlights important factors to consider when selecting a 3PL system.?
Learn more about how 3PL in supply chain management helps increase customer loyalty, as an immediate solution or a strategic partnership.
Industry News: The Django Stars' Perspective
Shippers are adopting a “training wheel” approach to origin management technology, collaborating with forwarders as co-pilots. This way, shippers can familiarize themselves with logistics software and better understand their supply chain management processes. This strategy allows them to gradually take over processes like procurement and order management, enhancing their control over supply chains and cutting costs.?
Yellow's bankruptcy, accounting for up to 15% of the US less-than-truckload (LTL) shipping market, has led to an overflow of shipments to its peer carriers, causing operational and financial stress for shippers. Experts note that shippers with strong relationships with carriers or 3PLs are better positioned, facing less severe price increases than those relying on purely transactional interactions.
Relationships between shippers and 3PLs have significantly improved in 2023, with 95% of shippers and 99% of 3PLs satisfied with their partnerships — despite past challenges like COVID-19, capacity issues, and labor shortages. Shippers increasingly seek 3PL expertise in technology, particularly in data quality and emerging tech areas like predictive analytics and warehouse automation.
Tips and Guides: More from the Blog