Blog Posts More Companies Using 3PL for Fulfillment Services, Survey Shows

More Companies Using 3PL for Fulfillment Services, Survey Shows

While omnichannel is the new normal, that doesn’t mean it’s easy. Satisfying heightened demand for timely, cost-effective, customer-focused service with available resources and capabilities can seem almost impossible.

To address omnichannel challenges, many manufacturers, retailers, and ecommerce companies outsource some or all of their order fulfillment services, according to our recent study.

Learn more about their decision to seek external support, in this excerpt from our new whitepaper, Ready or Not: Omnichannel Fulfillment & Distribution

Outsourcing practices

A growing number of companies appear to recognize that the increasing weight of omnichannel operations is too much to bear on their own. Over a third of respondents (35.9 percent) currently use a 3PL, and an additional 12.8 percent say they plan to use or consider using a 3PL in the next 12 months.

What are the driving factors for outsourcing? Respondents offered a litany of reasons why outsourcing offers value, including:

  • “Adds flexibility and scalability”
  • “We don’t have a good inventory management system”
  • “Speed of delivery and cost reductions”
  • “Being seasonal, it enabled us to reduce staff due to improved processes”
  • “Additional capacity to assist with sales growth”
  • “Able to concentrate time and effort to other more critical parts of the business”
  • “Lack of expertise in house”

Those who are opting not to outsource offer a range of reasons, including having sufficient in-house resources and expertise, concern over outsourcing costs and the small size/scope of their operations.

Many of those companies that do use a 3PL to handle order fulfillment and distribution give their 3PLs high marks, with 57.2 percent saying their provider’s performance is “excellent” or “very good.”  Others say there’s room for improvement, as 17.8 percent report “fair” or “poor” performance.

Those who are disappointed in their provider say they’d most like to see better on-time shipment rates (60 percent). Other opportunities for improvement include order accuracy, order cycle times, proper documentation, customer experience and fulfillment costs.

“It is important to seek out a qualified provider with the resources you need, experience in omnichannel fulfillment, proven processes and a commitment to continuous improvement,” advises Perry Belcastro, vice president of fulfillment at Saddle Creek Logistics Services. “Doing your homework up front can help you avoid potential service failures and maintain the integrity of your brand.”

To learn more about omnichannel fulfillment and distribution trends, common challenges, the role of technology, outsourcing fulfillment services and more, read the whitepaper.