Third-party logistics providers, or 3PLs, are performing a complex balancing act: They need to delivering exceptional service to end customers while keeping costs under control.
With the rapid growth of e-commerce and rising consumer expectations for faster, more accurate deliveries, maintaining this balance has never been more challenging.
Fortunately, advances in robotics and artificial intelligence are paving the way for 3PLs to overcome operational hurdles, enhance competitiveness, and deliver unmatched value to their clients.
3PLs must meet expectations without driving up costs
Today’s consumers demand speed and reliability. According to Statista, nearly two-thirds of global consumers expect deliveries within 24 hours — a far cry from the days when multi-day shipping was acceptable.
Coupled with the e-commerce market’s projected 8.5% annual growth and online retail’s expected share increase from 6.4% to 23% by 2028, as reported by ECBD, the pressure on 3PLs to deliver at unprecedented speeds is mounting.
For logistics providers, scaling to meet these expectations is no small feat. Rapidly growing shippers require adaptable and scalable fulfillment systems, especially during peak seasons like holidays. But with finite warehouse space and labor resources, 3PLs must optimize operations to thrive under these constraints.
As one industry study suggests, “Shippers are looking for service providers that help them achieve reliable results.”
To meet these demands, 3PLs must not only maintain high-performance standards but also demonstrate a technological edge. It’s no surprise that 75% of shippers now consider a 3PL’s use of AI a key factor in selecting logistics partners.
Why robotic automation is a game-changer
AI-powered robotic automation offers transformative solutions to the challenges that 3PLs face. It can enable them to operate at the scale, speed, and precision demanded by the modern market. Here are some key benefits:
Efficiency and accuracy
Automation can streamline workflows by eliminating inefficiencies. For example, instead of associates walking up to 10 miles per day to retrieve items, autonomous mobile robots (AMRs) can deliver the correct racks directly to packers. This can dramatically reduce picking times and errors. Optimized routes further enhance throughput, ensuring faster and more reliable order fulfillment.
Here’s how it works: A 3PL’s warehouse management system (WMS) sends a request to the robotic management system (RMS), saying, “Please bring rack No. X with Side A facing Operator Y.”
The RMS selects the optimal robot for the task. The robot moves under the correct rack, picks it up, and delivers it to the designated associate.
This process minimizes the non-productive walking by employees, allowing them to focus solely on retrieving products without traversing the entire warehouse. In addition, AMRs and software can significantly decreases picking error rates. In a nutshell, it’s the right rack at the right time at the right spot.
Scalability
Automation allows 3PLs to grow alongside their clients — and enable their clients’ growth — without the overhead of hiring and training additional staffers. Robots enable faster picking and improve accuracy, making it easier to quickly scale operations without bottlenecks.
Flexibility
Order volumes often spike during peak seasons like Black Friday or holiday sales. Instead of recruiting seasonal workers, which is costly and time-intensive, 3PLs can deploy additional robots to handle increased demand. When activity slows, robots can be scaled back just as efficiently, ensuring optimal resource utilization year-round.
Reliability
Robots deliver consistent results, unaffected by fatigue or human error. This reliability is especially critical in today’s volatile supply chain environment, where disruptions can significantly impact client satisfaction. By reducing downtime and maintaining precision-driven operations, robotic automation ensures the dependable results shippers seek.
Real-world success stories
The benefits of automation are not just theoretical — they’re already being realized by innovative 3PL providers:
Nova Post sought to improve throughput and space efficiency while reducing labor dependence. The company implemented 12 advanced rack robots to automate a 666 m² area within its 10,666 m² (114,707.8 sq. ft.) fulfillment center. The results were transformative:
- 300% increase in order fulfillment efficiency.
- 20% boost in space utilization.
- 72% reduction in walking distance.
- 5x decrease in picking errors.
By optimizing workflows and adopting robotics, Nova Post “achieved new standards of speed and precision and reached peak efficiency,” said Oleksii Taranenko, chief business development officer at Nova Post. He added that it “ensured uninterrupted 24/7 operations without compromising productivity,”
Netrush had an e-commerce client that experienced a staggering 450% growth within 12 to 18 months after switching to a robotics-powered 3PL model. The client credited its success to enhanced technologies, faster picking processes, and reduced walking distances that enabled faster response times and greater accuracy.
By providing scalable technology, Netrush helped its client surpass its growth expectations and achieve new levels of operational excellence.
Know where to start
Some 3PLs may feel that robots will not be effective in their warehouse because their operations are unique. But, in reality, if humans are currently doing repetitive tasks at a logistics provider, robots can almost always boost productivity — regardless of how unique their processes may be.
To properly assess the return on investment (ROI) from automation, 3PLs should start by asking themselves:
- How many people are employed?
- What tasks are they performing?
- Which of those tasks are repetitive?
Automating these repetitive tasks lets associates work faster, automatically increasing throughput and boosting overall efficiency, regardless of how unique 3PLs’ operations may be.
So, if people work at a 3PL warehouse, robots will make a difference.
Embrace the future of fulfillment
Robotic automation is more than a tool for incremental improvements — it’s a transformative investment that positions 3PL providers as indispensable partners in their clients’ success. With faster, more reliable, flexible, and scalable operations, logistics operations can exceed today’s high performance standards and help clients tackle tomorrow’s challenges.
As e-commerce continues to grow and customer expectations rise, standing still is not an option. The future of fulfillment is here — and it belongs to those ready to embrace it.
Are you prepared to take the leap into the future of logistics? The time to act is now.