Top 3 Industries That Depend on 3PL Services
Third-party logistics providers (3PL) drive growth in many of the country’s top industries.
Companies turn to logistics partners when they are preparing to scale their operations. Instead of managing their new warehousing and fulfillment needs in-house, they outsource some or all of their logistics to a 3PL. A successful 3PL partnership gives companies teams of experts, networks of assets and decades of experience, all at their disposal.
Though a wide range of businesses depends on 3PL services, outsourcing warehousing and logistics is increasingly necessary in three industries.
1. Manufacturing
Downtime is deadly in the manufacturing industry. Without all of the necessary personnel and parts, the whole supply chain can quickly fall apart, causing detrimental losses in revenue and retention. Third-party partners keep production on schedule and budget by ensuring materials and product get from their points of origin to their final destinations. With nationwide footprints and expansive asset-networks, logistics providers have the capabilities to tackle manufacturing projects of any size.
Manufacturing companies also rely heavily on the expert project managers and crews that a 3PL provides to overcome recruiting challenges. In March 2021, national manufacturing activity reached a 37-year high, according to Reuters, but an industry-wide labor shortage accompanied this growth. A study by Deloitte and the Manufacturing Institute predicted that 2.1 million manufacturing jobs will be unfilled by 2030. Logistics partners have provided relief for many manufacturing companies by eliminating overhead costs and lessening the need for in-house personnel.
An agile 3PL gives manufacturing companies access to an experienced workforce that can scale up or down as demand changes. A third-party partner stores parts in their warehouses, transports items in their vans and delivers everything with their crews. Instead of battling the labor shortage to gain their own assets, many manufacturing companies instead choose to take advantage of a 3PL’s asset network.
2. Hospitality
The U.S. had more than 85,000 hotels and motels in 2021, according to data from IBISWorld. The industry continues to experience steady growth, and logistics partners keep hotels competitive by playing key roles in new constructions, renovations and refurbishments.
A 3PL drives a successful renovation by coordinating the deliveries of a hotel’s operating supplies and equipment (OS&E) and furniture, fixtures and equipment (FF&E). As the hotel or its procurement partner orders new products for each room, a 3PL receives, stores, transports and installs those furnishings on an as-needed basis. Logistics partners can also add value to the renovation process by providing services such as kitting — grouping furniture and materials together by room for organized delivery and installation — to make a hotel project smooth and painless.
Additionally, hotels often need logistics partners to perform quality checks as they receive items to their warehouses. The 3PL verifies the conditions of all shipments so the hotel can stay focused on on-site operations. When the site is ready for the furnishings and equipment, the hoteliers don’t have to worry about sending items back at the last minute because of prior damages.
3. Retail
Seasonal demand leaves retail companies in a constant state of flux. The National Retail Federation reported that winter holiday sales make up 19 percent of annual retail sales on average, forcing companies to hire up to 575,000 temporary workers to meet the demand. Internally managing the logistics for these changing customer trends can be unnecessary and unrealistic for some growing companies.
Instead, many retailers enlist third-party logistics providers to handle their warehousing, inventory management and fulfillment. Third-party providers have expansive asset networks, allowing them to efficiently scale their operations to meet the needs of retailers. Warehousing partners also have the technology and resources to keep retailers informed about their inventory at every moment and any location. As a result, retail companies can stay ahead of demand without worrying about running out of stock.
Retailers also depend on third-party partners to maintain high customer-satisfaction ratings. A recent report by Microsoft found that 58 percent of customers have stopped engaging with a company because of poor service. A 3PL ensures that retailers exceed the expectations of their customers by providing efficient, convenient and reliable service with every delivery. For retailers with high-value products like server equipment or exercise bikes, a 3PL can even lend their expertise to the installation process by providing white-glove assembly services.
Armstrong – Houston offers a wide range of logistics and warehousing services to deliver efficiency and peace of mind to growing companies. As part of a sprawling asset network across the country, Armstrong – Houston has the capacity to keep your production, orders and projects on track. Call our experts today at 281.897.1118 to get started.
