How a 3PL Can Help You Solve Your Transportation and Warehousing Labor Shortage Issues

The logistics sector has been dealing with a labor shortage for many years, but each year, those issues become harder to address with traditional approaches. Businesses are having trouble staffing up warehouses for peak season, while fleet managers are struggling to put drivers in seats. And despite HR teams’ best efforts, internal hiring alone can’t keep pace with the volatility of today’s market.

The answer always used to be “hire more,” or “hire temp labor,” but those solutions are becoming less tenable over time. After all, there are only so many available contract workers to go around, and a lot of shippers, manufacturers, retailers, and other businesses are competing for them. For many businesses trying to scale, the new answer is to rethink fulfillment and transportation models altogether.

This is where a third-party logistics (3PL) provider can step in to help, and not just to bolster your capacity, but to act as a strategic partner that helps you find ways to reduce dependence on a fragile and unpredictable labor pipeline.

Building a Flexible Work Model With Your 3PL

Agility is perhaps one of the biggest advantages a 3PL can bring to the table. Rather than maintaining a fixed workforce that is overworked in busy times and underutilized in slower times, companies can tap into shared labor pools that scale up or down and back and forth between the 3PL’s clients as demand shifts.

This flexibility is especially important because labor demand in logistics rarely stays steady. There are seasonal spikes, promotional surges, and unexpected disruptions that shift forecasts and cause wide swings in volume out of the blue. Trying to match all that with a fixed internal workforce will end one of two ways: overstaffing or overworked staff.

3PLs even out that volatility by spreading labor resources across multiple clients and facilities. That results in a more balanced and efficient workforce that absorbs these types of fluctuations without risking service levels. For the shipper, that means less scrambling at the last minute to fill shifts and more time to focus on other functions, such as marketing, sales, and product development.

Meanwhile, the reduced burden on the shipper’s HR department means they can focus more on workforce and culture development rather than being bogged down by the constant demands of recruiting, onboarding, and retention for the warehouse.

Reducing Labor Dependency Through Automation

The industry’s persistent labor shortage has also led to accelerated investment in warehouse automation technologies in recent years, and 3PLs often lead the charge on these trends as they try to streamline services for their customers. With autonomous mobile robots (AMRs), automated guided vehicles (AGVs), and smart picking systems, 3PLs can improve throughput with the workforce they have.

While shippers could also get this same benefit by investing in automation, the 3PL can spread the cost of that investment across its customer base while the shipper would have to shoulder the investment alone for one or more in-house facilities. This can be extremely cost-prohibitive, especially for mid- to large-sized businesses trying to grow.

It’s important to note that automation is not about replacing workers, but about augmenting them so they can do more. Automation handles most repetitive, physically taxing tasks, while humans handle exceptions, perform quality inspections, and optimize processes.

Because 3PLs operate at scale, they can justify and deploy these technologies much faster, with a shorter ROI timeframe. This creates downstream benefits for their clients, who gain access to more advanced capabilities without long implementation timelines or big financial risk.

In a tight labor market, the combination of fewer manual touchpoints and higher worker productivity makes a meaningful difference for any warehouse.

Expanding Access to Transportation Capacity

Carriers have been contending with a driver shortage, fluctuating gas prices, and rate volatility for the last several years. As such, they tend to drift toward customers who can provide them with consistent volume, reliable backhauls, and long-term contracts. While individual shippers can’t always guarantee volume, it is much easier for a 3PL to combine the volume of all of its clients to make those deals. As such, when capacity gets tight, 3PLs will often get prioritized by carriers.

Additionally, 3PLs tend to maintain broader carrier networks that wouldn’t make sense for a single shipper to build. Logistics providers leverage technology to optimize routing and load matching across a wider pool of overall capacity, ultimately enabling them to guarantee availability and flexibility even in tight markets.

Technology also plays a significant role here, enabling the provider to plan freight based on real-time intelligence, visibility, and predictive analytics. This means the 3PL can help to anticipate disruptions, rebalance loads, and reduce empty miles for carrier partners, ensuring they get the best use out of the drivers they have available.

Outsourcing Logistics to Create a More Resilient Approach to Labor Challenges

There is no magic button shippers can push to fix labor shortages. Addressing staffing challenges isn’t about fixing an issue that has plagued multiple industrial sectors for years, but about building flexibility and resilience into operations so they can adapt to volatility, whether it comes from labor, geopolitical events, inflation, or the next Black Swan event.

“The companies that will come out on top aren’t the ones still out here trying to out-hire everyone else in the market,” says Frank Crivello, founder and chairman of Phoenix Investors. “They’re the ones who put in the effort to redesign their operations so they don’t have to. A strong, strategic 3PL partnership gives you that leverage, whether it’s labor, technology, freight capacity, or whatever else you need.”

Labor constraints aren’t going away, so the long-term lesson here for shippers is clear: Build a flexible, scalable model that can adapt to changing conditions. That model is increasingly being built through 3PL partnerships.

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 logistics 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.