Outsourcing Operational Logistics Will Soon Become an Industry Standard

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Operational-Logistics

The global economy has been making very erratic market movements in the past few weeks. While many would like to assume that we’ve reached some form of balance and support, the brutally honest truth is that everything is still up in the air for uncertainty to decide. As a result, while many industries have been doing their best to combat the challenges they face, several businesses are still grasping at straws, trying to make ends meet.

However, one well-established market is expected to benefit from all this shift in demand. As more companies migrate to online platforms, it’s only natural for them to rely on the one service everyone will need — freight courier, shipping, and distribution. But first, let’s explore the recent developments and news that lead to this opportunity for 3PL companies to shine and whether these speculations are reliable market trends to follow.

Job Growth Sharply Declines

If you’ve been actively following the news, then it’s almost certain that you’ve come across the recent jobs report for April that marked a disappointing 266,000 jobs over the forecasts for more than a million. And if these numbers continue to stagnate at such a low level, then this will continue to reflect in the stock markets and a weaker dollar overall because businesses are unable to accelerate job creation back to pre-pandemic numbers.

Of course, while the opposing end argues that the stock market is misreading these charts and there’s still a trustworthy outlook for a more bullish recovery, only time will tell as the true story unfolds. However, what we can guarantee as a fact is the lack of jobs and the slow rate of job growth, meaning that companies are still overloaded and require more time and resources before they can create more livelihoods.

Supply Lines Still Near Capacity

Until today, the heavy strain of Covid-19 on global supply lines is still near capacity and causing many industries to suffer from extreme shortages and backlogs on production orders, most notably the chip shortage affecting our everyday smart appliances, handheld gadgets, and the entire auto industry. What’s worse, even packaging costs are higher, which only worsens the already burdened supply chains as they now have to deal with increased expenses.

As of current, there appears to be no sign of this problem going away, and the plans directed to address the supply chain issue are all long-term, meaning that these challenges won’t be resolved for at least a few more years. Therefore, it will be tough for many industries to realize their full potential if they have to navigate logistics problems while focusing on core operations.

E-Commerce Continues To Spike

Last but not least, the mass migration to the online platform sparked the surge in e-commerce, and even though we’ve seen steady growth in the online market, nobody expected the sudden spike created by the global pandemic. However, while an increase in demand is normally a good thing for industries because they can offload more products and generate more income, the same concept doesn’t apply to our current situation. And since warehouse operations and inventory management can’t operate at full capacity, a large portion of the demand will remain unrealized. 

Why These Are Opportunities For 3PLs

Overall, after considering all the economic news affecting the entire global market, it’s relatively safe to say that each of these issues boils down to logistics and shipping problems. Therefore, many of these exist as opportunities for 3PL companies to resolve and utilize their expertise in the industry to innovate current solutions. 

  • Cost Savings: Firstly, businesses from all industries would be ecstatic at the opportunity to outsource operational logistics because these would net them advantageous cost savings. A third-party logistics company would allow them to free up more of their resources and help transfer more of their budget to core operations. And while the extra bit of liquid cash won’t resolve the lack of jobs, the benefit will accrue over time and prove impactful in the long term.
  • Scalability Of Business: Secondly, many businesses can’t afford to upgrade and scale up their operational logistics infrastructure because it would spread them too thin and demand too much for minimal gain. Sure, extra warehouses for more inventory would alleviate some supply issues, and better distribution would help lock in more profits. Still, a lot more could be done if spent otherwise. 3PL companies can scale their business much better because it’s the service they specialize in and offer.

An Economic Turning Point

We are on the brink of an economic turning point, and all it would take is for one more global event to dictate where the rest of the year 2021 will be headed. And while there’s only so much we can speculate amidst all the economic uncertainty, an increased need for better logistics is guaranteed, and the demand for more proficient 3PL companies is expected. 

 

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