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3PL Market Update

21 July 2022, 2:50 pm

Made4net recently announced that Zethcon, a leading North American WMS software company with a robust cloud-based solution designed specifically for the unique requirements of the third-party logistics (3PL) market, has joined the Made4net family. With a multi-decade track record of delivering premier 3PL WMS solutions, the team at Zethcon has their finger on the pulse of the 3PL industry. We recently sat down with Account Executive, Errol Gonzales, for an update on the state of the market.

Q: What’s driving growth in today’s 3PL market?

A: The United States 3PL market is expected to grow at a CAGR of over 6% during the forecast period of 2022-2027. Growth is largely being driven by changes brought on by Covid-19, including growing demand for e-commerce and a general need to build supply chains that are more agile and resistant to shocks. Many companies had existing visibility and capacity issues that were laid bare during the pandemic. They didn’t know how inefficient they were and then things stretched and eventually broke.

As inflation soars and labor remains difficult to find, the cost benefits of outsourcing distribution to 3PLs is also boosting the growth of the 3PL market.

Q: What do today’s 3PLs need to do to capitalize on industry growth?

A: In the 3PL market, success always comes down to customers and order management, so keeping service top of mind is key to success. As a 3PL there is only so much storage you can get out of a facility and only so much productivity you can achieve. The key to growth is in finding new ways to serve your customers – offering value-added services and being a partner that people enjoy working with.

Q: What do today’s 3PLs need from a warehouse management system (WMS)?

A: First and foremost, today’s 3PLs need a software provider who is there for them. There are many WMS providers who can provide good functionality around receiving, putaway, picking and packing. And there are a few that do particularly well with unique features that are important to 3PLs, including multi-client billing, value-added services, e-commerce fulfillment and fast onboarding tools.

The differentiator is the level of expertise and commitment. The majority of prospects I speak with today aren’t necessarily dissatisfied with their technology, they are dissatisfied with the service they are receiving. Emails and calls go unanswered. There’s simply no urgency to getting things done and there’s a lack of shared commitment to mutual growth.

Q: Outside of support, what should a 3PL look for in a WMS?

A: I’m always surprised by the number of organizations that are still doing things manually, so, my first recommendation is to look for the ability to automate key processes. Make sure the system is set up for scanning and automated data collection. And, be sure you can automate billing activity. This means you have system that allows you to capture all the work you do for a client outside of storage and handling. The right WMS will prompt your associates to capture all their activities, such as shrink-wrapping product or performing other value-added services and tie that directly to a client invoice. Invoices should be auto generated and automatically sent.

Q: Outside of automation, what’s important?

A: Integration. Gone are the days of flat files and EDI. Today’s warehouses have more technology than ever before, meaning there’s a greater need for fast and smooth integration. API integration is critical.

Q: What about reporting?

A: Real-time data is essential to running an efficient and profitable operation. You want and need data on every aspect of your operation – from how your associates are preforming to how inventory is moving in, out and around the building. A tool like the Synapse WMS brings together data mining tools, analytics and configurable dashboards to prioritize the metrics and key performance indicators that matter to your operation in a comprehensive, easily digestible view.

 Q: What benefits can a 3PL expect from a WMS?

A: Our customers consistently tell us that with our WMS in place, they are able to grow. They can do a lot more with less. Labor has always been tough to find in this industry, and it always will be. Having our WMS in place allows our customers to reduce their labor needs. They also see an increase in accuracy and this enables them to capture more revenue opportunities. But most importantly, with us a partner, our customers get peace of mind. We have been in business for 30 years. We’re committed to growing alongside our customers, we’re their WMS partner, not their WMS provider.

If you’re looking to grow your 3PL business, reach out to see how Zethcon’s leading WMS solution quickly transforms paper-based 3PLs into service leaders who deliver customer satisfaction and operate more efficiently.