Pressure on warehouses isn’t new. But right now, it’s stacking up in a different way. Costs are climbing. Labor is tighter. Customers want more. And technology? It’s everywhere.
In our recent webinar, Glenn VanLandingham, VP of Solutioning and Implementation, and McCord Frampton, Solutions Consultant, shared what they’re actually seeing inside today’s warehouses, from conversations with third-party logistics operators to real-world deployments.
The Margin Squeeze Isn’t Easing Up, It’s Accelerating
If it feels like you’re constantly being asked to do more with less, you’re not imagining it.
Across the industry, labor costs are climbing, headcount is harder to maintain, and the price of transportation remains volatile. For most warehouse operations, labor alone makes up well over half of total operating costs, so even small shifts hit hard (BLS/FRED data; Eightx 2026 3PL Cost Index).
That pressure changes how teams operate day to day. As Glenn put it during the session:
“Everybody that works in supply chain…you probably have two jobs. You have your main job…and your second job is cutting costs all the time.”
That tension between running the business and constantly optimizing it shows up in almost every decision operators make right now.
Automation Is Shifting and Getting More Accessible
Automation isn’t new, it’s been a part of warehousing for years. What’s changed is how accessible, and flexible, it’s becoming.
Instead of large, fixed investments like conveyors or sortation systems, more operators are exploring AMRs (autonomous mobile robots). Not because they’re flashy, but because they solve a very practical problem: labor.
These systems can be deployed quickly, work within existing layouts, and with a subscription model you can scale up or down depending on volume. That matters in an environment where demand spikes aren’t predictable and hiring isn’t easy.
It’s also why we’re seeing adoption move beyond enterprise-level facilities. You don’t need to rebuild your warehouse anymore to start automating parts of it.
This shift matters. Because now, automation isn’t just for the largest operators, it’s becoming viable for mid-sized 3PLs looking to offset labor constrains and drive efficiency faster.
Growth Is Happening, But It’s Breaking Old Operating Models
One of the most interesting dynamics right now is that 3PLs are growing. They’re expanding into new services, new verticals, and new revenue streams.
But that growth comes with tradeoffs.
E-commerce, for example, isn’t just more volume. It’s a completely different operational model. You’re dealing with single-unit picking, returns, kitting, peak-season elasticity, and multi-channel inventory sync.
Life sciences and pharma bring their own layer of complexity, with strict GDP/FDA compliance requirements, serialization and validation processes, audit-ready documentation, and specialized storage needs.
And then there’s everything in between: kitting, co-packaging, customization, services that go well beyond traditional distribution.
They key takeaway: No one is just doing distribution anymore. And every new service requires a new operational model, not just more capacity.
The Next Bottleneck Isn’t Picking, It’s Packing
For years, the industry has focused heavily on picking efficiency. But in high-volume e-commerce environments, the next constraint is showing up downstream. Packing.
As order volume increases, manual pack stations struggle to keep pace. That’s why automated packing machines are getting so much attention. These systems build boxes to the exact size of each order, reduce wasted material, and significantly increase throughput. In many cases, they also cut down on repetitive motion tasks, which improves both safety and allows employees to focus on higher value work.
It’s about alleviating labor costs and increasing productivity on the outbound side.
AI Is Everywhere, But Most Teams Are Still Figuring It Out
AI is part of almost every conversation right now. But when you look closer, most organizations are still early in the journey.
Industry research shows that only about a quarter of supply chain organizations have a formal AI strategy, while the majority are still experimenting or trying to figure out where to start (Gartner, Deloitte).
That lines up with what Glenn and McCord are seeing firsthand.
So where is it working today?
- Optimization (transportation routes, slotting, orchestration)
- Forecasting and inventory management planning
- Analytics and reporting
As Glenn phrased it, the real question operators are asking isn’t what AI is, it’s “How is this actually going to help me?”
Where AI is Starting to Stick: Making Data Usable
One place where AI is delivering more immediate value is analytics. Not in a futuristic way, but in a very practical one.
For example, traditionally, getting useful insights out of a WMS required technical skills. You needed someone who could write queries, build dashboards, and interpret data. What’s changing is how accessible that process is becoming.
During the webinar, McCord walked through how this is being applied in practice. For example, inside tools like Datex Footprint Analytics, which allows users to describe what they want to see and have the system generate the output.
It’s a small shift on the surface, but it solves a real problem: getting answers faster without technical overhead.
This is also a good example of how Datex is approaching AI more broadly. Instead of positioning it as a standalone feature, it’s being layered into the platform in ways that support everyday work, from analytics today to more agent-driven workflows over time.
Why the WMS Matters More Than Ever For 3PLs
This was probably the clearest and most direct point in the entire session. A WMS is important for any warehouse. But for 3PLs, it’s foundational in a different way. As Glenn says:
I’ve been in WMS my whole career. And one thing is as true today as ever…in 3PL, regular WMS doesn’t cut it. A WMS platform just means way more to 3PLs. And if you’re working with just a traditional WMS and a 3PL, it’s probably a bottleneck.”
And that distinction is critical. Because 3PLs need more than core functionality. They need things like flexible billing engines, customer portals for real-time visibility, constant integration capabilities, and support for value-added services.
Because the job isn’t just running a warehouse. It’s managing customers, billing, integrations, reporting, and constant change. That’s where flexibility becomes critical. As McCord put it:
“Having a WMS that is flexible, that can adapt, that can meet new requirements and..take on all the challenges that your customers are going to throw at you is even more important.”
This isn’t theoretical. It shows up in real scenarios, like operators relying on reports instead of system logic to make decisions, or struggling to adapt workflows as new customers come onboard. At that point, the system isn’t supporting the business. It’s slowing it down.
Flexibility Is the Real Differentiator
If there’s one theme that ties everything together, it’s this: the operators that win are the ones that adapt fastest.
Not by chasing every new technology but by making practical decisions: adopting automation where it makes sense, applying AI where it adds value, and building systems that can actually keep up with change.
Because change isn’t occasional in 3PL. It’s constant. That’s why extensibility matters.
Final Takeaway: Focus on What Actually Works
There’s no shortage of innovation right now. But the 3PLs moving forward are focusing on what delivers:
- Automation that reduces real constraints
- AI that drives usable insights
- Warehouse management systems that flex as fast as the business changes
The question isn’t whether warehouse operations will become more complex. They will. The question is whether your WMS will make adapting easier or harder.
Want to Dig Deeper?
Frequently Asked Questions
What is the difference between a standard WMS and a 3PL WMS?
A standard WMS is designed for a single company to manage its own inventory. A 3PL WMS is built for multitenancy—it can manage inventory, processes, and billing for multiple clients within the same warehouse. Key 3PL features include automated 3PL billing, client-specific workflows, and customer web portals for visibility.
What is the most important feature in a WMS for third-party logistics?
While several features are critical, the most important is arguably the multiclient architecture and its integrated billing engine. The ability to manage distinct inventory, workflows, and business rules for each client—and then accurately bill for every single activity—is the core function that protects a 3PL provider’s profitability and enables it to operate efficiently.
How does 3PL software improve labor productivity?
3PL software improves labor productivity by optimizing workflows with system-directed tasks, reducing travel time with intelligent picking paths, and minimizing errors with RF scanning validation. Its intuitive user interface also drastically cuts down on training time for new employees, addressing the high attrition challenge.
