August 4, 2023

Is It Too Late to Find a Peak Season 3PL?

Is It Too Late to Find a Peak Season 3PL?

Supply chain professionals know that planning for the holiday peak season begins with the coming of the New Year. Retailers and manufacturers often return from the holiday break and begin gathering and analyzing data to see what went right and what went wrong.

Once a business has identified areas for improvement, it can identify the right solutions and partners to address them. Businesses that struggle to scale with peak season volumes will often turn to a third-party logistics (3PL) company for help. But how late is too late to onboard a peak season 3PL?

Finding a Peak Season 3PL

There are numerous reasons to get help from a 3PL before peak season. Maybe your data from last year suggests that your sales volumes have outgrown your in-house fulfillment operation, or perhaps you need to break up with your current 3PL because they can’t scale with your peak season needs. Whatever the reason might be, finding a suitable 3PL will probably take weeks at a minimum, so you need to get started right away.

The timeline for finding and onboarding a 3PL can vary widely based on your circumstances. Generally speaking, here are some things to look for in your new 3PL as you look for companies worthy of your Request for Proposal (RFP):

  • Tech-enabled. According to the 2023 State of Logistics Report from Kearney and the Council for Supply Chain Management Professionals (CSCMP), shippers currently prioritize 3PLs with “capabilities involving data management, visibility, and analytics.” That’s not to say all warehouses or fulfillment operations require advanced technology. Still, there is a tipping point in order volumes where you’ll need more tech to keep things flowing efficiently. The report also revealed that 3PLs invest in technology at a higher rate than shippers, so it’s likely that you could find a 3PL that offers benefits from solutions you don’t currently have.
  • Industry experience. You’ll want your new 3PL to have some experience working in your industry with the types of products that you ship. While 3PL could potentially cut its proverbial teeth in your industry and be fine, that doesn’t make it worth the risk to find out — especially going into a busy sales period.
  • Winning during peak sales periods is often a matter of scale. More orders mean you need more resources to manage those orders. One of the greatest benefits offered by a 3PL during peak season is its ability to scale its technology, labor, and carrier capacity to meet skyrocketing order volumes.
  • Labor retention. Given the labor shortage the logistics sector has struggled with for the past several years, it’s fair game to ask a 3PL what their warehouse associate retention rates look like. Your logistics partner should act as a solution to your labor shortage issues rather than contribute to them. Also, ask what the provider’s peak season temporary labor capabilities look like to help you understand its ability to scale up quickly.
  • Ability to ramp up quickly. If you’re still looking for a logistics partner to help you with peak season in the middle of the summer, you haven’t got much time left to get your warehouse in order. You will probably need at least a few weeks to find a 3PL, so you need to find one that can get fulfillment operations up to speed just as quickly. That could mean a 3PL with experience rapidly setting up new facilities or simply one with existing space for your fulfillment operation within one of its multi-tenant facilities.

Peak season can make or break your business. The efficiency and speed of your fulfillment processes can either win customers for life or turn dissatisfied shoppers away from your brand. Though time is short to find a peak season 3PL, make sure to do your due diligence. Your customers will thank you for it.

About Phoenix Logistics

Strategic Real Estate. Applied Technology. Tailored Service. Creativity. Flexibility. These fundamentals reflect everything we do at Phoenix Logistics. We provide specialized support in locating and attaining the correct logistics solutions for every client we serve. Most logistic competitors work to win 3PL contracts, and then attempt to secure the real estate to support it. As an affiliate of giant industrial real estate firm Phoenix Investors, we can quickly secure real estate solutions across its portfolio or leverage its market and financial strength to quickly source and acquire real estate to meet our client’s need.

Kurt Jensen is the Senior Vice President, Acquisitions & Leasing of Phoenix Investors, a national real estate firm specializing in industrial real estate based in Milwaukee, Wisconsin. He is a seasoned executive with over 25 years of entrepreneurial, management, and deal-making experience.

Frank P. Crivello is a Milwaukee-based developer and Chairman & Founder of Phoenix Investors.

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