What does the future look like for 3PL's?

What does the future look like for 3PL's?

According to Statista, the global revenue of the 3PL industry is 961.8 billion dollars. Needless to say, that is a lot of money. 

But what is it about 3PL services that make this particular area of logistics such a lucrative field? And whatever it is, does it also mean that the 3PL industry is going to flourish even more in upcoming years? 

If you are excited to find the answers to these questions, as well as many other facts on the future of 3PLs – you have come to the right place. In this blog, we are going to venture deep into the world of 3PLs and learn more about what the future looks like for them. 

So, join us and keep reading!


  • What are 3PLs?
  • Why are 3PLs Becoming So Popular?
  • A Look Into the Future; What Should 3PLs Expect?
  • Conclusion

What are 3PLs?

If you were compelled to click on this blog, chances are that you already know what 3PLs are. But just in case you are new to this part of the logistics arena and want to deepen your understanding of 3PLs and what services they provide, let’s get some basic facts about 3PLs straight. 

3PLs, or third-party logistics, is a term coined to describe the process of outsourcing your logistical process to a third party, instead of taking care of them yourself. These processes include but aren’t limited to warehousing, inventory management, order fulfilment, and shipment. 

The need for 3PL support arises when businesses find themselves tackling more than they can efficiently deal with. As one would assume, this is the most common for small businesses, but is increasingly becoming true also for bigger establishments that want to improve their logistics and provide a better fulfilment experience to their customers. This is because no matter how small or big of a business you are, you will find that 3PLs can make your fulfilment journey pleasantly easy, smooth, and seamless. 

How? Well, think of it this way: you have been carrying really heavy weights for a very long time; perhaps even years. You can feel these weights taking a toll on your well-being, and you want to let go of them, but you also know that you can’t; there is no other way to achieve what you want. And then one day, someone comes in and offers to hold the weights for you, giving you a chance to breathe. 

As dramatic as it sounds, that’s what 3PL services are like for businesses. By opting for 3PL, you are essentially letting go of the burdens and responsibilities of logistics, which then frees up time and energy for you to focus on other elements of your business.

Canary7 - What does the future look like for 3PL's - What are 3PLs

Why are 3PLs Becoming So Popular?

Outsourcing logistics has been a thing, at least in the West, since 1970’s. But it has only now become extremely popular. Why is that? 

The thing is, logistics, as it is, is an aspect of fulfilment and business management that can be a cause of stress for even the most established businesses. This is because customers of the 21st century are a lot more advanced; they have higher expectations, and meeting these can turn out to be a challenging feat, to the point that a business, without external help, cannot even deal with it. 

So, that’s one side of the picture; customer demand. Outsourcing of logistics to 3PLs is actually preferred by businesses in comparison to other ways of dealing with logistics, so there has been a surge in 3PL activity in general, which has turned 3PL into a prominently dominant sector within the logistics industry. 

Adding to this, we have the case of digitisation. 3PLs, partly in response to customer demand and partly as a way to outsmart their competitors, are increasingly bringing digitisation to the centre of their operations. This has resulted in a complete revolutionisation of the 3PL industry; 3PL services are no longer what they used to be back in the day; they are advanced, efficient, and pretty close to perfect, which means that they are even a bigger temptation to customers. 

To sum it up; 3PLs are so popular because they are an advanced, much preferred way of dealing with crucial logistics processes, and are constantly improving to better align with customer expectations, thanks to a reliance on technology and digitisation. 

Canary7 - What does the future look like for 3PL's - Why are 3PLs Becoming So Popular

A Look Into the Future; What Should 3PLs Expect?

At this point, you’re surely thinking, “Right, I know 3PLs are doing great right now, but are they likely to be doing just this great in the future?” The simple answer is: yes. As far as statistics are concerned, 3PLs are likely to do pretty great in the near-future. In fact, by 2027, the 3PL market is expected to hit above the $1.75 trillion mark – which is monumentally better than what the market is right now. 

So, if you are a 3PL operating right now, all you have to do is persevere the next few years and you will be a part of one of the biggest, most lucrative global industries in literally no time. If you are deliberating whether you should become a part of the 3PL industry, then we recommend that you do!

However, in order to ensure that you are fully ready to deal with the future of the 3PL industry, whether you are already a part of it or are looking to become a part of it, it would be good to keep the following pointers in mind: 

Make it all about the consumer

When it comes to the future of 3PLs, you need to be very clear about the fact that it is going to be ALL about the consumer. 

Even today, in 2022, customers are used to instant gratification. Same-day deliveries, free shipping, no-cost returns, and many other perks associated with order fulfillment have become the norm. 

97% of those surveyed for a report considered same-day shipping to be fast. In addition, according to one research, 78% of Amazon prime members say that they have signed up because of free shipping, whereas another found that companies with free shipping have a 20% higher conversion rate than their counterparts that don’t have free shipping. This shows that customer expectations are, to be frank, quite brutal today. 

And this is only going to evolve as we move into the future. Businesses that are mindful of growing consumer expectations are likely to succeed, whereas those that fail to take the dimension into consideration will be left behind. 

As a 3PL, you must remember that your promise to your clients is to provide unparalleled logistical services that can impress their customers. For this reason, if you want to secure your place in the future as one of the top 3PLs, you must provide services that align completely with consumer expectations. Whether this requires you to invest in top notch warehouse management systems or shipping equipment such as electric delivery fleets and recycled packaging, you must do so for the sake of your success. 

Canary7 - What does the future look like for 3PL's - Make it all about the consumer

Strengthening your supply chain

The Covid-19 pandemic was a lesson for everyone; but the most for organisations across the world because it taught each one of us to prepare for and adapt to unfortunate, unseen, and unpredictable events beforehand. When it comes to 3PLs, this realisation has been even more stark. 

Currently, the 3PL supply chain is incredibly vulnerable to many risks. One example of this is the labour shortage. It was reported in a recent research that 73% of warehouse operators can’t find enough labor; and this figure is similar all over the world. Particularly in the UK, the labor shortage has led to warehouses having to pay up to 30% more in order to recruit staff. Based on these stats, it is understandable that labour shortage is a real problem, and it can prove to be a major sensitivity for 3PLs and other warehousing services. 

There are many other problems that 3PLs are currently facing as well; extreme weather events, supplier disruptions, and labour conflict. However, in order to build your place in the future and make sure that your 3PL services can successfully emerge from the other end of the tunnel, you must adapt your supply chain in a way that not only strengthens it, but also allows you to confidently deal with the aforementioned problems and prepare for any other possible issues as well. 

It may sound like it requires rocket science or perhaps a magic wand to get all of that done, but the good news is that achieving an optimal supply chain, in today’s world, is as simple as basing your business decisions on data-informed predictions. By prioritising the harnessing and leveraging of data, you can prepare your operations to deal with any and every crisis that comes their way. 

Canary7 - What does the future look like for 3PL's - Strengthening your supply chain

Using the latest, most modern technology

It should be obvious by now; but if you are a 3PL that actually wants the future to turn out in your favour, you need to start investing in the right technology right now. 

As discussed already, one of the strengths of the 3PL industry as a whole; the thing that makes it such a fan-favourite, is its reliance on modern technology and its focus on the digitisation of as many processes as possible. So, if you are a 3PL that is still out there relying on paper-based systems, you are far, far behind where you should be. 

In order to prepare better for the future, you must invest in advanced technologies. These will not only help you achieve the maximum amount of productivity for your 3PL processes, but it will also make sure that you are providing what the customers truly want. 

With the help of the right software systems, you can get your hands on data that matters. This data can then be used to improve not only one, but multiple facets of your fulfilment journey. 

So, what do we mean by modern technology? Anything and everything, basically. So, we have robots as a service (RaaS), tracking technologies like RFID, AI and augmented reality in warehouse, order, and inventory management systems, as well as interesting labour management technologies that employ innovative ways of engaging your team. Like we said; it’s anything and everything that makes your business better. 

Canary7 - What does the future look like for 3PL's - Using the latest, most modern technology

The Bottom Line

The future for 3PLs, at least from where we see it, is incredibly promising. If you keep in mind the industry shifts, trends, tips, and tactics that we have discussed above, you can build a strong place in the 3PL industry going forward. 

Want to solidify your success as a 3PL business? Take a look at Canary7 – the perfect fulfilment partner for 3PLs all over the world. 

Namrata Chawla

Namrata Chawla


UPDATED ON: 25th Nov 2022

Namrata Chawla, a professional writer, crafts compelling weblog content on warehouse management, inventory control, logistics, and beyond. With a wealth of experience in this niche, she's dedicated to delivering unique, informative, and top-tier posts. Her commitment to exploration ensures fresh perspectives in each insightful blog post.

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