Over the last several years, freight carriers have increasingly realized the benefit of partnering with a third-party logistics (3PL) company. Several developments have contributed to this trend, and many of these are expected to drive further growth of the 3PL industry. But not every 3PL company is the same, and some offer a much broader range of services than others. As a result, it’s important to appreciate why 3PL partnering is beneficial but also essential for companies to know the extent to which a 3PL company can help them attain success. As one of the most comprehensive 3PL companies around, Fratogo partners with an array of freight carriers. And based on our own market research, the following highlights what to expect in the coming months to years.
The E-Commerce Factor
It’s no secret that the boom of e-commerce before and during the pandemic drove freight carrier demand sky-high. But as volumes and consumer expectations increased, many carriers found it challenging to keep pace. This is where 3PL companies attracted attention, since their services can greatly improve the efficiency and quality of services. By pursuing 3PL partnering, freight carriers could better meet fulfillment demands and streamline transit and last-mile delivery. And as same-day and next-day delivery became popular, the need for such partners increased even further. While e-commerce is not as “hot” as it was during COVID, it’s still well above pre-pandemic levels. Therefore, expect the use of 3PL companies and 3PL partnering to continue to expand to help meet e-commerce needs.
Globalization and Supply Chain Factors
In addition to e-commerce, another major driver of 3PL partnering has been globalization. Globalization expanded the density of networks of the supply chain and, as a result, made freight transit more complex. Because of this, 3PL companies were increasingly called upon to provide freight transit solutions. Companies like Fratogo expanded their services to include not only ground transportation but all types of transit avenues. Plus, with advanced tracking services, these systems offered carriers and businesses tremendous opportunities to improve efficiencies. While supply chains have improved greatly in the aftermath of the pandemic, they remain complex and have yet to normalize. Because of this, 3PL companies will continue to be essential partners for high-volume, globalized freight.
Advanced Technology Factors
With so much growth in the freight and logistics industries, it’s not surprising that companies struggle with being up-to-date. This has been most evident when it comes to the latest technologies. New technologies include those that provide real-time tracking, predictive analytics, machine learning, and artificial intelligence (AI). Likewise, most industries are seeing a rise in robotics, automation, and sustainability technologies like electric carriers. Understanding this, 3PL partnering offers a way to stay abreast of these developments and offer these services. Not only do 3PL companies like Fratogo provide expertise related to these areas, but they also reduce the financial investment companies have to make to ensure they have the latest and best technologies. This has been one of the most important ways 3PL companies aid freight systems and companies today. And 3PL partnering will continue to be a beneficial strategy in this regard in the years to come.
Customer Service Factors
As volumes of freight and product demand increased, so did the need for customer service. Within most logistics sectors, competition is fierce, and those with excellent customer service tend to outperform the others. In this regard, 3PL companies offer major advantages and can enhance the consumer experience. Fratogo and others naturally provide real-time package tracking and efficient customer communications. But they also offer additional personalized services, flexibility in delivery options, and package returns. In essence, 3PL partnering allows carriers and freight companies to provide consumers with a consistent, high-quality service experience. Combined with the other factors mentioned, this is why 3PL partnering will continue to be a common practice among these industries.