Date: July 8, 2020
You can’t watch the news without hearing of record-breaking increases in coronavirus cases, hospitalizations, and deaths. In some states and counties, government officials have halted re-opening efforts and warn of additional closures if the spread continues. While supply chain and logistics providers fall into the “essential” services function, what would a second wave mean to your 3PL warehouse? And, have you prepared for the implications that additional closures or delays in re-opening might have for your business?
As we reflect back on earlier this year when stay-at-home orders first emerged, 3PL Central saw dramatic increases in order volumes from third-party logistics (3PL) warehouses using our 3PL Warehouse Manager WMS, with some 3PLs increasing their order volume in excess of 5x. On average, 3PLs saw more than 81% growth year-over-year in ecommerce order volumes. Will this ecommerce volume continue at this level or could we face even higher numbers as the year continues?
As summer continues and coronavirus cases increase, we’ve seen 3PLs double down on two key strategies: harnessing the opportunity of ecommerce fulfillment and protecting their workforce.
While many companies saw the first round of stay-at-home orders negatively impact their business, many 3PLs used it as an opportunity to harness the increasing adoption of ecommerce and to provide services to retailers and manufacturers that lacked online fulfillment support. Many 3PL warehouses were forced to take a hard look at diversifying their fulfillment strategies to expand into ecommerce or omnichannel fulfillment and build scalability nearly overnight.
As we shared in our Special Edition: Ecommerce State of the Third-Party Logistics Industry report, consumer buying patterns rapidly shifted towards ecommerce in Q2, driving many unprepared retailers to close stores and in some cases declare bankruptcy. In fact, COVID-19 dealt a blow to brand loyalty, with 44% of U.S. shoppers having tried at least one new brand during the pandemic because their standard brand was either unavailable or took too long to deliver. This served as an opportunity for smaller businesses to step in where some of the larger retailers failed.
While some 3PLs have already adjusted their models to address higher volumes, others continue to evaluate how they can excel amidst a second wave of closures, potential labor shortages, and higher demand. Savvy 3PL warehouses continue to evaluate their strategies and ask themselves the following:
Ask yourself these questions to understand if you have truly prepared and thought through how to support and grow your business during the next wave of COVID-19. When you’ve considered these questions, ask yourself whether you have the right protections in place to prevent business interruptions and to ensure the health and wellbeing of your team. Check back later this week to hear the best practices our Customer Advisory Board shared about protecting the health and safety of 3PL warehouse workers.
To learn more about our WMS, 3PL Warehouse Manager, and how it can help your 3PL warehouse scale to meet increased ecommerce fulfillment demand, click here.
A modern marketer with a passion for blending analytics and creativity, Rachel helps companies grow their talent and prepare for the future. With more than 20 years of experience across Marketing, Product Management, Customer Success and Field Operations, she offers a unique and balanced vision to the business. As Chief Marketing Officer at 3PL Central, Rachel's responsible for strategic planning and execution of all marketing and go-to-market efforts.
3PL Central provides cloud-based WMS solutions for 3PLs so they can transform paper-based, error-prone businesses into service leaders focused on customer satisfaction, efficient operations, and growth.