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How 3PLs can use automation to succeed in a growing e-commerce economy

Highly fluctuating e-commerce volume, global staffing challenges that include current workers not showing up, and rising labor costs, automation is key for 3PLs.

Prompted by the pandemic, ecommerce is the fastest-growing market segment for third-party logistics (3PL) providers – and it shows no signs of slowing down. In fact, a recent report reveals retail ecommerce sales in the second quarter of 2020 reached $211.5 billion, a 31.8% increase from the first quarter of 2020 and a 44.5% increase from the second quarter of 2019. That trend is only expected to continue.

To meet increased demand, highly fluctuating e-commerce volume, global staffing challenges that include current workers not showing up, and rising labor costs, automation is key for 3PLs. Not only does it improve an organization’s speed and accuracy, but it also provides predictability in meeting consumers’ requirements for quick – often next-day – delivery.

With automation, employees are better equipped to handle increased throughput. They embrace technology, whether it’s a pick-assist or goods-to-person robot as these solutions make their jobs easier, safer and more efficient. Technology helps make employees happier and more productive since it allows them to process higher volume more accurately.

At the same time, those investing in automation gain a platform enabling them to scale to meet omnichannel fulfillment and other unique logistics challenges that will come their way. In fact, technology could be the key to extending short-term contracts into long-terms ones, which will increase organizational stability and most likely revenue.

Why a technology investment pays

Mobile automation such as automated mobile robots (AMRs) and voice-directed technology are two solutions that enable 3PLs to deliver predictable, scalable results by making manual movement activities like picking and put-away more efficient.

AMRs improve operational efficiency by handling, for example, time-consuming, repetitive tasks that include goods-to-person, bulk-material movement, piece or pallet picking and sortation. Similarly, voice (and vision) technology let warehouse workers keep their hands and eyes free so they can better focus on required tasks. They can get more picking, replenishing and other duties done in less time and with greater accuracy.   

Further, in the 3PL world, a crucial advantage of AMRs is they’re portable. This allows you to cost effectively move a robot from one site to another to meet higher volumes within a region. A robotics workforce that is fluid enough to meet demands enables you to grow and thrive, particularly when staffing challenges persist.

Let’s take a closer look at a use case in which goods-to-person technology has eliminated time-consuming, unproductive activities – and has been well worth the investment for both parties.

Automation enables highly efficient picking

One of our long-time European 3PL clients that ships wine invested in an automated storage and retrieval system that picked 130,000-plus bottles a day – or 50 million bottles per year. In addition, a rotapick station enhanced system productivity and improved pick rates for slower-moving SKUs by using a rotating system that simultaneously handled multiple open orders.

Long-story short, the automated technology streamlined operations, enabled the company to better plan and predict the flow of goods as well as supported the consumer trend of next-day deliveries.

Could the 3PL have met the same demands without automation? Not without increasing the workforce. And with today’s staffing challenges, rising labor costs, dependability of staff returning to work and predictability of shipping goods on time, automation was the only viable solution. The investment has been a collaborative win-win for both the 3PL and the ecommerce company that ships millions of bottles of wine yearly.

Choose the right solution, regardless of e-commerce contract

If you want to grow in an era of booming e-commerce, you can’t just throw people at it, particularly since you likely lack enough workers to do the job. Rather, consider how a long-term solution will set you up for strategic growth. Technology comes at a cost. But what’s the cost of not investing in automated solutions?

Automation provides flexibility and adaptability to support efficient operations, regardless of the time frame of your contract. And the right technology provider will be able to point you in the right direction – toward a solution that can be used whether you deal with shoes, apparel, small appliances or any other commodity. And whether you’re dealing with pallets, units or cases.

Solutions that include robotics and voice improve efficiencies in supply chain logistics, regardless of the time of your ecommerce contract. You must have the right technology provider by your side – one that has multiple robotic solutions that are fit for your use, depending on your situation at hand.

Perhaps it’s time to talk to a supply chain solution company that offers different types of mobile automation, so you are confident the recommended solution works for you, regardless of contract or goods you currently ship out the door.

If you are interested in how we can help you thrive during an era of unprecedented ecommerce growth, visit here.

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