Why Your 3PL May Change in 2025

The start of each year gives businesses new opportunities to reach milestones, explore emerging markets, and strengthen brand identity and customer relationships. But for many ecommerce brands and retailers, 2025 has felt like the winds of unlimited success have been taken out of their sails. What’s behind the tepidness? A lot. From pending tariffs to fading consumer confidence, today’s economic hurdles may take a toll on businesses throughout the year.  

WSI’s Matt Schroeder and Peter Davis decided to take the subject on and discussed the what-to-expects on February 4, 2025, with host Sarah Barnes-Humphrey, during a Supply Chain Brain webinar. The topic, “Why Your 3PL Partner May Change in 2025” addressed the challenges companies face today and the perspectives essential to overriding them, while finding resiliency in the process.  

Tariffs, Time, and Rethinking Strategies

Up until U.S. President Trump’s formal announcements regarding new tariffs on imports, small and large companies were focused on increasing innovation and growing their business. But now may be a good time for industry leaders to take a pause, look at their own situation, and consider what initiatives can wait. 

From the time the global pandemic first disrupted supply chains, retailers are challenged with navigating the back and forth of demand cycles, going between Just in Time and Just in Case inventory strategies. But now that companies are hunkering down and focusing on profits, just in case may prevail in the short term.  

The Cost of Change

Scope is shifting quickly for many companies; WSI VP|GM Fulfillment & Chemical, Davis believes that from a 3PL perspective, the primary concern is how economics will impact business, which is centered around the customer experience. And to protect the customer, he says “you want as much slack built into the system as possible to increase flexibility,” which means adding additional resources.  

Establishing a 3PL partnership that includes ongoing communications can help customers get through the rough patches common during turbulent economic times. This open dialogue, according to Schroeder, helps a 3PL acknowledge customer pain points and offer solutions.  

Many businesses believe they are customer-centric, but in reality, many don’t know how to put it into practice. Expectations are easily met when times are good, business is plentiful, and customers can check all the boxes on results from their 3PL. It isn’t until customers’ profit margins shrink, or cost-savings disappear, eroding partnership trust and testing the relationship that customer question if continuing with their 3PL is worth the cost and effort. 

How Far Will They Go to Keep You?

From a business standpoint, assessing the strength of a 3PL has a lot to do with their willingness to make things right. With the increasing costs of doing business, “ecommerce brands and omnichannel retailers are going to need extra attention to help them get through new regulations and adjust to extended shipping times. That could mean changing expectations on expedited deliveries and who is going to bear that cost,” Schroeder suggests.  

Discovering the Right Level of 3PL Expectations

Supply chains and logistics companies are forced to evolve or step aside as business requirements and customer satisfaction bear dynamic conditions. The same flexibility essential to ecommerce growth is best supported by a 3PL provider that has the same amount of leg room and the chops to go explore other markets.  

During the interview, Schroeder recalls a younger beverage brand, that didn’t know the full breadth of their market potential, and unknowingly “found a product market for 70-year-olds hitting retailers heavily.” The business needed to pivot quickly to “meet those customers in their retail journey or miss out on those sales,” he says. Working with a 3PL that has the bandwidth to “roll with the punches” helps ecommerce brands expand into other markets, without hesitation. 

Defining Partnership

Misunderstandings can also arise between 3PLs and their customers if the term partnership is left unclear. Without a two-way understanding of expectations, assumptions are made leading to disappointments. 

Davis gives caution to companies that assume the services they want from a 3PL are going to be included, adding that, “If it’s not baked into rates A, B or C, chances are you’re not going to get it.” And without clarity, customers could also wind up paying for services they don’t need.  

Exercising thoroughness when working through 3PL-to-customer contracts helps logistics companies stay on top of expectations and avoid missed opportunities. Because 3PL providers don’t typically operate with high margins, there’s a slim chance of getting paid for service items not part of the initial contract.  

Assessing Scale

When selecting a 3PL partner, Schroeder shares a couple of ways to distinguish what makes the best fit.  

1. “Being the big fish in a small pond can be very helpful, because there’s more wiggle room on price. But if you beat them up on price too much, the whole business can go under.” 
2. “For single-location legacy warehouses, it’s good to know the size of their storage footprint and how many square feet your business will take. That ratio gives a clue to how much the 3PL would cater to your specific needs too.” 
3. For ecommerce brands ready to leap from one warehouse location to two, it’s like asking the 3PL to bet on the success of your business. What ecommerce brands and retailers should be asking is whether the 3PL provider has the bandwidth, slack, people, and scale to roll with the growth. 

KPIs That Walk the Talk

Transparency and visibility are everything to keep supply chains operating well. Finding trust in a new 3PL provider can be challenging, because there’s no established track record between the partnership, yet. To gauge performance and make necessary adjustments takes real-time data reporting shared by both parties. 3PL-generated metrics provided regularly, and cadence meetings conducted often, give both parties the opportunity to discuss the analysis and construct solutions. 

There’s power in the transparency of metrics, and 3PL companies with customer dashboard platforms give visibility on another level. If there’s a glitch in the system or a red flag pops up during the customer’s user experience, it’s an open window to seeing a logistics partner’s true colors.  

• How long does it take to find a point of contact to discuss the issue? 

• How long does it take to resolve the issue? 

The longer it takes to address the problem and move past it, the more costly to production, brand reputation, and customer retention. 

3PL Provider Stability Can Mitigate Adversity

Ultimately, ecommerce brands and retailers grow exponentially when their 3PL is financially stable. “WSI is fiscally responsible, we don’t have external financing or take in a ton of leverage,” Davis says, adding that ensuring your 3PL is “cash-flow positive” is a good place to start.  

Businesses that value accountability operate with growth strategies that include 1-, 3-, 5-, and 10-year action plans. Working with a 3PL partner intent on being in business for at least 5-to-10 years helps provide ecommerce brands and retailers solid footing to go forward, despite unforeseen yet necessary pullbacks to come. 

To learn more about the discussion on this Supply Chain Brain webinar, watch it here. 

To find out if 2025 could be the year your 3PL partner may change, consult with a trusted, experienced warehousing, fulfillment and logistics expert at WSI now.