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The Changing World of 3PLs

Third-party warehouses (3PLs) have historically provided companies with an invaluable service: the ability to store inventory and ship it out to customers around the globe. These warehouses are experts at packaging products to maximize order fulfillment. Many also have branches across the country to make shipping to customers in different geographic locations cheaper and more efficient.

Despite their long list of benefits, 3PLs have their shortcomings as well. For companies that experience seasonality or other fluctuations in inventory or shipping frequency, 3PLs can sometimes be problematic, especially if they aren’t staffed or otherwise equipped to handle sudden increases in activity.

Logistyx Technologies says that “[d]ue to the increase in shipping volumes attributable to the surge in ecommerce propelled by the COVID-19 pandemic, carriers enacted an unprecedented number of rate increases, surcharges, and fees in 2020.[1]” Accordingly, many 3PLs have also begun to cater to businesses that operate heavily in the ecommerce space. As such, companies that have a large volume of inventory and high turnover seem to be the ideal fit for third-party warehouses in this new COVID world.

Unfortunately, companies that are just starting out, that are in flux, or that have seasonal shifts in inventory cannot meet the minimum requirements of many 3PLs. That means that these businesses have to fend for themselves. They must opt to drop ship to customers or find an alternative solution for storing inventory and processing orders.

Fortunately, small-scale warehousing options do exist, even if they aren’t easy to find. We saw this exact gap in the market firsthand with our clients—foreign companies with strategic, lower-volume needs who didn’t fit the rigid model of traditional 3PLs. This is precisely why we built our own IBI warehouse in South Carolina.

It wasn’t an afterthought; it was a data-driven decision to provide the tailored, hands-on logistics support our clients couldn’t find anywhere else.

Read the full case study to see the data behind our decision and learn how our facility was designed from the ground up to solve this exact problem.

[1] Logistyx Technologies. “7 Logistics Trends That Will Radically Change the Manufacturing Industry in 2021.” Logistyx.com. 2021.
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