3PL Markets Demand Speed – But Too Many Are Standing Still

Short-Term Thinking and Slow Adoption Are Leaving Providers Behind

Over the past several months, I’ve had long conversations with CEOs, chief supply chain officers and executives across nearly every industry. And one theme keeps coming up again and again: the requirements to succeed in the 3PL market are changing, and faster than most people realize.

The world of logistics never stands still, but today’s pace of evolution is different. We’re operating in a business climate defined by policy swings, geopolitical volatility and supply chains that shift shape almost weekly. Shippers are asking for help with cost, speed, flexibility and resilience.

3PLs are trying to keep up while balancing their own challenges. Their top concerns center on rising operating expenses and tougher competition for customers.

But the biggest worry I hear, many leave unsaid. Most 3PL leaders are not investing in the tools that I think will determine who wins the next decade.

And that is a problem.

The 3PL Market Is Evolving … in the Wrong Direction

Every executive I talk to tells me a similar story: the demands placed on 3PLs are growing. Shippers want more strategic support, not just transactional 3PL services. They need visibility, consistency and the ability to react when the next disruption hits.

Yet, even as the environment becomes more complex, some 3PLs are pulling back on technology investments. That may help margins in the short term, but it hurts supply chain operations in the long term.

Automation adoption is slowing when it should be accelerating. People treat digital platforms as optional when they should serve as foundational elements. Labor strategies remain stuck in models that no longer work.

This lack of investment comes as 3PL companies are enjoying improved profitability. Executives know the top challenge remains the same: rising operational costs. If you don’t address labor, automation and scalability right now, those costs will make today’s successes tomorrow’s regrets.

Why Technology Investment Declines Worry Me

The decline in technology investment runs counter to what shippers expect. The world is shifting to networks that must operate through ongoing disruption. You cannot deliver resilience with spreadsheets and clipboards.

Automation, AI-driven planning, advanced visibility tools and flexible platforms for onboarding new customers are not “innovation projects.” They are table stakes.

And when technology adoption drops, something else inevitably rises: costs. Whether it’s labor, capacity or process inefficiency, a tech-light 3PL will lose ground to those who build smarter, digitally enabled networks.

This becomes even more critical when we talk about labor.

Labor on Demand: A Competitive Advantage 3PLs Cannot Ignore

When I talk to 3PL leaders, I tell them plainly: the labor model you choose will either solve your operational cost challenges or deepen them.

Traditional temp agencies still send warm bodies. But warm bodies don’t drive productive logistics operations. They don’t reduce risk. They don’t stay long enough to deliver consistency and added services.

That is why labor on demand has become one of the most important capabilities for modern 3PLs. Tompkins Ventures has partners that deliver W2 workers who are vetted, trained, supervised and aligned with a client’s culture. The tech platform makes it a snap to scale up or down based on demand.

This approach tackles profitability, risk management, scalability and sustainability head-on.

When a 3PL can fill a shift with fully trained workers in hours, not weeks, the business becomes more resilient. 3PLs that operate with labor fill rates of 99.2% have a competitive advantage over those who fill 70-80% of open positions. Likewise for those that operate with turnover rates of 16.5% vs. 50% or more,

Operations stabilize. Customer service improves. Margins rise. Risk declines. And retaining new customers becomes easier.

These are the foundations of a strong, cost-effective and competitive 3PL value proposition.

The Biggest Competitive Gap in the 3PL Market

And that will help you win in what matters most: getting and keeping customers. Because most executives in the 3PL market tell me that’s tougher than ever,

Why? Because shippers are thinking differently.

Service sometimes outweighs price. Resilience outweighs legacy relationships. And speed outweighs promises.

3PLs that embrace automation and labor on demand push their cost curves down and their service consistency up. They create a flywheel of better execution, better customer experience and better retention.

Those that delay will watch the gap widen.

Where the 3PL Market Goes from Here

We are in the early stages of a new era in logistics. It is defined by:

• Supply chains that shift faster than budgets
• Customers who expect far more value
• Technology that enables scalable solutions
• A labor model that must adapt to surges, seasonality and unpredictability

The 3PLs that thrive will be those that make the right investments now. Automation. Digital platforms. Labor on demand.

Those are the backbone of future competitiveness.

I have been in this industry for five decades. And I can tell you this with certainty: when disruption becomes permanent, adaptability becomes the strategy.

If you are a 3PL executive trying to navigate this changing landscape, let’s talk. Tompkins Ventures can help you connect with automation partners, AI-driven platforms and labor-on-demand solutions that let you scale with confidence.

The 3PL market is shifting. The winners will be those who shift with it.

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