One of the most significant 3PL challenges is staffing. Attracting and maintaining top talent is one of the biggest issues today. 3PL providers, therefore, are under increasing pressure to invest in automation and, at the same time, must realise a quick return of investment.

One of the side effects of exponential e-commerce growth is that 3PL providers run out of space. Although real estate prices are not cheap, a 3PL that fails to offer adequate capacity risks damaging its reputation.

Returns in the fashion industry are the highest of all consumer returns (40-60 percent of all items purchased online are returned), putting a significant and labor-intensive demand on the 3PL provider. There are two models for returns and the setup will depend on the service level agreed with the customer – next-day, or 2-3 day delivery – and how it impacts the returns management solution.

The systems employed by 3PL providers are typically designed for an order profile. Changes in the order structure profile can cause detrimental performance effects and this is challenging in conditions where the number of items per order for retail and e-commerce change all the time.

3PLs need to be able to serve more than one customer on the same system. Their WMS must be able to manage multiple customers for inventory, invoicing, handling and so on at the same time, whether the customer is in clothing or household appliances.

Adapting to client growth is a part of the business and scalability is a big challenge for 3PLs moving forward. 3PLs must be able to scale up and down to match the size of the 3PL operation.

This is a major challenge for 3PL companies in most of the developing countries of the world. Some of the problems faced may include bad road conditions, poor connectivity, inadequate air and sea port capacities and lack of developed modes of transports such as railways, roadways and inland water transport system.