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3PL Distribution Must Match the Network Design Revolution

by | Oct 28, 2025 | Supply Chain

3PL

The Right Partners Can Unlock Service and Cost Advantages

Supply chains are in the middle of a network optimization revolution. And 3PL distribution could be your key to success.

For decades, supply chain planners targeted facility locations and inventory levels. The Tompkins team routinely cut costs by 7‑15% and improved service and 20‑30%. Clients were happy, and business was good.

However, advances in technology and understanding yielded the insight that planners paid scant attention to how freight charges change and how demand spikes.

That’s all changed. In today’s market, design is not a one‑time exercise; it is a long‑term strategy that must ensure optimized and secure operations and rely on real‑time data.

Businesses that fail to adjust their network infrastructure may miss savings. Even more importantly, their customer experiences will suffer.

And plugging into the right 3PL distribution network is one of the easiest ways to build a new network. Matching companies with the right ecosystem is a Tompkins Ventures specialty.

Why Transportation Matters in 3PL Relationships

Transportation takes up the bulk of a network’s supply chain costs. Therefore, transportation drives most of the savings. For companies that don’t want to maintain their own warehouses and transportation fleet, third-party logistics (3PL) providers come to the rescue.

Many third‑party logistics providers are more than warehouses; they manage carriers, transport modes, technology, labor and shipping costs across the supply chain. Some 3PLs rely only on operational knowledge, while others depend solely on technology.

Both approaches struggle to handle disruptions and meet business requirements. The best providers blend operational expertise with advanced tools like control towers and flexible labor apps, delivering the resilience needed in a volatile world. Control towers deliver real‑time visibility, synchronize supply and demand and use artificial intelligence to manage exceptions. A 3PL with strong network managing skills can ensure optimized network performance and help businesses run efficiently.

The Price of Choosing the Wrong 3PL

At Tompkins Ventures, we’ve watched companies make the wrong 3PL choice time and time again. And companies can pick the right 3PL but face problems because of unclear requirements.

If the RFP details that the 3PL needs to handle 2,000 pallets a day and store 20,000 pallets, that’s what the client should get. Unfortunately, those nice average numbers don’t dovetail with reality.

Because the client actually needs the 3PL to handle 3,000 pallets a day the first week of each month, and the 3PL doesn’t have enough receiving doors. And inventory could range from 12,000 pallets up to 28,000 pallets.

Knowing that, the 3PL needs to ensure its yard can handle those extra trailers – and that the client is OK with trailers sitting in the yard for four or five days.

Scope is a second problem. Nobody sees the future too well, but sharing the right information can help partners prepare.

Sure, the client reps clearly explain that the 3PL must handle a range of 1,000 to 3,000 pallets a day, along with 10,000 to 28,000 pallets of storage. But they don’t let the 3PL know that they plan to buy another company, an acquisition that requires processing another 1,000 pallets a day and storing another 10,000.

Client mindset can trigger a third set of problems. Often, clients don’t build in the right communication links, thinking they can just throw their problems over the wall.

But after a few months of smooth sailing the warehouse starts fulfilling huge amounts or orders that combine a book and a shirt. Productivity drops because nobody told the 3PL that the client ran a special – buy this shirt, get this book for free.

Proper communication would have let the 3PL put in a fast-picking station that combined shirts and books.

Behind Every Great 3PL Are the People Who Make It Work

People make up a fourth and a fifth issue – a stable workforce and continuous improvement.

Do clients really know who they’re hiring? They’re not hiring the sales staff that buys your drinks and takes you to hockey games. They’re buying the people on site.

It’s wise to either visit the site or have a partner like Tompkins Ventures who knows the right 3PLs. While on site, it’s a good idea to ask as many employees as possible how long they’ve worked for the 3PL. If most have only been there a few weeks or months, keep shopping. Because by quarterly review time, the client won’t know anybody who has been in the building.

And those people are the ones that drive continuous improvement. Clients might want to write in 5% annual productivity gains. That’s reasonable.

After all, what is management doing if they cannot improve each year? But if they don’t have a stable workforce, they’re going to spend their time training new workers, not continuously improving.

These examples illustrate how the wrong 3PL can sabotage a network optimization project. They also show why a “one size fits all” approach fails. Whatever a company’s strategy or business plan, 3PLs must have the processes, technology and expertise to execute.

What to Look for in a 3PL Partner

Choosing a 3PL is about more than capacity. It’s about aligning with the broader design strategy and ensuring efficient operations. Tompkins Ventures’ global network can help businesses thrive in this design revolution:

  • Tailored solutions across any vertical. 3PLs are not identical. Tompkins works with partners specialized in direct‑to‑consumer fulfilment, industrial distribution, cold chain and more. A tailored solution is the only way to lower transport costs and increase service levels.
  • Cost‑effective savings. A good 3PL network can save 10% or more by optimizing the flow of goods and continually improving. With transportation and demand‑variability modelling, total savings can reach 15‑25%. That protects the bottom line.
  • Real‑time visibility and accuracy. Effective providers offer 100% real‑time inventory visibility and 99.9% inventory accuracy. This data is vital for meeting business requirements and adjusting routes quickly.
  • Speed and diversified options. Some businesses need same-day, next-day or two‑day delivery capability. All need the ability to mode shift – less‑than‑truckload, full truckload, rail, ship or air. Options help reduce risk and serve both B2C and B2B needs.
  • Innovation and scalability. Tompkins’ partners use supply‑chain technology and AI to make decisions. Customers can switch or combine 3PLs as they grow, cutting dependence on a single node and enhancing resilience. This flexibility supports long‑term growth while maintaining network security and cost effectiveness.

Mastering the complexities involved in choosing a 3PL distribution network is difficult. Tompkins Ventures makes it easy. We partner companies with the right providers, the ones with control‑tower visibility, AI‑driven decision support and flexible resources.

Success stories include a European apparel company that cut seven‑ to nine‑day delivery times to two days. And then there’s the furniture accessory maker that consolidated from seven fulfilment centers to three, trimming inbound cycle times to 48 hours.

Planning for 2026 with a New 3PL Strategy

Companies are rethinking their supply‑chain footprints because of volatile freight markets, labor constraints and changing consumer expectations. Executives need to align design efforts with 3PL selection. They should ask:

  • Does the current 3PL model enable consolidation and mode shifting, or is it locked into static routes? Failing to optimize transportation can lead to false positives in design.
  • Can the 3PL use real‑time data to react to demand swings? Tompkins integrates seasonal and real‑time modelling into simulations, so partners must have technology to keep up.
  • Do you have the flexibility to add or change providers as your footprint changes? Tompkins emphasizes flexibility and risk reduction, helping companies reconfigure without major capital costs.

If your approach feels stuck in the past, reach out to Tompkins Ventures. We can help reassess your 3PL distribution landscape. We know the firms that blend expertise with innovation. And we’re not afraid to work with multiple 3PL providers to build the right mix of capacity and resilience.

These steps can help companies manage the design revolution confidently. Because competitive advantage stems from cutting shipping costs, improving customer experiences, ensuring efficiency – and growing business.

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