MHI Solutions Improving Supply Chain Performance
THIRD‑PARTY LOGISTICS providers, often known as 3PLs, play a vital role in the global supply chain, bringing much‑needed perspective to their clients. Shippers tend to be locked in on their own corners of the marketplace—and with good reason. 3PLs offer a broader view to consider.
“As 3PLs, we often see different industries and how one industry may have solved something and ask how do you leverage it in another industry?” Laura Adams, senior vice president of continuous improvement, technology, engineering, solutions and business process integration for MHI member CJ Logistics America, said. “So, when we’re working with our clients, they know their industry, but they don’t necessarily think outside of what their industry is doing. We bring that larger perspective. And that’s definitely heightened after the pandemic. We’ve needed to bring that outside‑the‑box thinking.”
In a rapidly evolving supply chain landscape, 3PLs often are at the center of the storm. Evan Armstrong, CEO of Armstrong & Associates, which provides 3PL consulting and market research, noted that the shifting tariff environment in the United States has created the biggest ongoing challenge for the 3PL industry and its clients in 2025, particularly due to uncertainty.
“The whole unknown part of that has kind of gripped the industry,” he said.
Fortunately, Armstrong said 3PLs, in general, are “very responsive.”
“These things make the demand uneven,” Armstrong said. “You have these spikes prior to tariffs going into place, and then once tariffs are in place, you see a drop in volume. But you can plan for it, and 3PLs are good at planning.”
A DIVERSITY OF PROVIDERS
Shifting supply chain trends can change how shippers view 3PLs. For instance, an emphasis on global visibility has prompted some larger shippers to lean toward working with a single 3PL rather than teaming with multiple providers, Adams said.
“I think there’s a lot of that for 3PLs, where one manufacturing client is looking for one provider to work with instead of four or five along the way,” Adams said. “They say, ‘I just want one company that can align with my strategy, give me that end‑to‑end visibility and understand my whole supply chain.’ With globalization, I think you’re seeing a little bit more movement toward those larger partnerships.”
Armstrong said the marketplace continues to support regional and smaller 3PLs alongside larger ones, noting the demand for warehousing is especially strong. He said that warehousing revenue growth is surpassing warehouse square footage growth as automation makes warehouses increasingly productive and efficient.
“There are a lot of companies that are doing trucking, and they have some warehousing, or they’re doing freight brokerage, and they have some warehousing,” Armstrong said. “As long as you can build a good relationship with a shipper or provide good service, there is an opportunity in warehousing. If you’re a small, regional provider, you might be running an operation for a large Fortune 500 company, or you might be working with more of a local company in a dedicated warehousing situation.”
Armstrong pointed out that “we’re definitely seeing growth in multi‑client versus dedicated operations.”
“Multi‑clients are growing faster, and a lot of that’s being driven by ecommerce,” he said. “Overall, though, there is plenty of opportunity for 3PLs of every size because the industry is still fairly fragmented.”
Armstrong said he anticipates steady merger and acquisition activity in the 3PL space, particularly among larger providers.
“We just expect more and more merger and acquisition activity,” Armstrong said. “That’s one of the mega trends that’s going on. So, if you’re a shipper, it’s important to have those continuation clauses within your agreements. If you’re a 3PL, it’s important to know what you’re acquiring and what your customer base is.”
SCALABILITY, FLEXIBILITY AND RISK MITIGATION
Adams said the 3PL field has placed greater emphasis on scalability and flexibility in recent years, particularly amid occasional demand surges. That has led to the use of more multi‑client facilities versus facilities dedicated to one client.
“Responsiveness to the unknown is key right now,” she said.
Central to increased scalability and flexibility is greater predictive power, Adams said.
“How do we help our customers become more predictive of things based on the past data? How do we use the information to provide better visibility of what may happen so we can react and be responsive?” she said. “There’s responsiveness and proactivity in there.”
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