March 29, 2023
Logistics is a rapidly-growing industry with no sign of slowing down. According to Statistica, the size of the global logistics market was worth 8.4 trillion dollars in 2021 and is expected to exceed over 13.7 trillion dollars by 2027. This surge is largely due to the increased use of 3rd Party Logistics (3PL) to fulfill e-commerce orders. In 2021 alone, the 3PL industry's total revenue soared to 347.9 billion dollars in the US, and this number is expected to continue to climb.
To learn more about 3PL, check out our blog post, “Are You Ready for 3rd Party Logistics?”
As 3PLs continue to be highly sought-after by e-commerce sellers, it is crucial that they provide efficient services that aid customer growth. For this reason, 3PL providers need to modernize their operations by integrating software into their business models. For 3PLs that are looking to enhance their operations, we recommend utilizing a warehouse management system (WMS).
At its core, a warehouse management system (also referred to as “warehouse management software”) is a type of fulfillment software designed to optimize a 3PL’s operations. A WMS provides transparency into the 3PL’s day-to-day tasks, simplifying fulfillment and inventory management.
Each 3PL will differ on what additional WMS features they prefer, such as data analytics or labor management. However, there are core offerings that every 3PL should require of their WMS. So, what are these features, and why are they essential for a 3PL?
It is essential that WMS can be quickly and easily implemented by the 3PL. If the software requires a significant amount of time to implement, it could interfere with current business operations. In a similar vein, it is crucial that the WMS is user-friendly and easy for the 3PL to use daily. For example, many WMS providers offer a mobile version of their software. This makes it easy for 3PL employees to utilize the WMS as they move around the warehouse.
A 3PL’s warehouse management system should have the ability to integrate with other software. By integrating with storefronts and marketplaces, the WMS can have an accurate reading of each business’ inventory and orders. Shipping carrier integrations can also make it easy for 3PLs to find the most efficient and cost-effective shipping provider for every order.
3PLs should look for a WMS that comes equipped with a number of automated features. Automated features work 24/7 to simplify order fulfillment steps and make smarter business decisions. Some examples of automated features a WMS might provide include an auto-batch feature and smart shipping packaging selection.
Many WMS providers include billing features such as billing management, invoices, and payment processing. These features exist to help remove the stresses of manual management and help reduce human error. Additionally, 3PL customers will appreciate having their billing information readily available.
Overall, 3PL owners should look for a warehouse management system that can support their business as it evolves. Many 3PLs will eventually decide to expand their warehouse network or incorporate new fulfillment services. 3PL owners should look for a WMS with a team that is capable of guiding and supporting 3PLs through these changes.
Soapbox’s WMS is designed to streamline 3PL operations. With multiple integrations and automated features, we’re here to support your 3PL’s growth however we can.