A strong 3PL case study shows a prospective customer that you’ve already solved a problem like theirs. It explains the customer’s situation, what went wrong before, what your team did, and the measurable results. For warehousing and fulfillment buyers, who are trusting you with their inventory and their customer experience, that proof is often what moves a 3PL from “maybe” to the shortlist.
Most 3PL websites claim accuracy, flexibility, and great service. Case studies are how you prove it.
Why case studies matter for 3PLs
Choosing a 3PL is a high-stakes decision. Switching providers is expensive and disruptive, so buyers look hard for evidence before they commit. A good case study helps in three ways:
It reduces risk. Buyers see that you’ve handled products, volumes, and challenges like theirs.
It shows your specialty. A case study about a cold chain food brand says more about your capabilities than a list of services.
It gives others something to share. Consultants, colleagues, and internal champions can pass it along when they recommend you.
Case studies also matter for AI search. Tools like ChatGPT and Google’s AI Overviews favor specific, factual content. A detailed case study gives them concrete information to cite when a buyer asks for a 3PL with relevant experience.
What buyers want to see in a 3PL case study
Warehousing and fulfillment buyers look for details they can compare to their own situation:
The type of product, number of SKUs, and storage needs
Order volumes and seasonal peaks
The problem: missed ship times, inventory errors, a failed move from another provider, or rapid growth
Headline with the result. Lead with the outcome, not the customer name. For example, “How a growing supplement brand cut shipping errors during peak season.”
Summary. Two or three sentences and the key numbers, for buyers who skim.
The customer. Industry, size, products, and what they needed from a 3PL.
The challenge. What wasn’t working and what it was costing them.
The solution. What your team did: locations, processes, technology, and onboarding.
The results. Specific, measurable outcomes and how long it took to get there.
A customer quote. One or two sentences in their words, with their permission.
A clear next step. An invitation to request a quote or talk with your team.
How to get the details you need
The best case studies come from short interviews, not guesswork. Talk with the account manager and operations lead, then with the customer if they’re willing. Ask:
What made you start looking for a new 3PL?
What were you most worried about when you switched?
What changed after the first few months?
What would you tell a company considering us?
Pull performance data from your WMS so the results are accurate. If a customer won’t allow their name, describe them by industry and size. Specific results still carry weight.
Where to use your 3PL case studies
A case study only works if buyers see it. Put each one to work:
Your website. Link case studies from related service, industry, and location pages, not just a single results page. A well-structured website puts proof where buyers are already looking.
Sales follow-up. Send the most relevant case study after a first call.
RFP responses. Include case studies that match the buyer’s industry and challenges. See our post on warehouse RFPs for more.
LinkedIn. Share the story in a post from your company page and your executives.
Ads. Use case study results in paid campaigns aimed at similar buyers.
The customer’s situation, the challenge they faced, what the 3PL did, and measurable results. Specific details about products, volumes, technology, and timelines make it credible.
How long should a 3PL case study be?
Long enough to tell the story with real detail, usually 400 to 800 words. Add a short summary at the top with the key results for buyers who skim.
What if a customer won’t let you use their name?
Describe them by industry and size instead, such as a fast-growing supplement brand or a regional building materials distributor. An anonymous case study with specific results is still valuable.
Where should 3PLs use case studies?
On your website near related services and industries, in sales follow-up, in RFP responses, on LinkedIn, and in ads aimed at similar buyers.
A warehouse RFP (request for proposal) is how companies compare 3PLs before choosing a warehousing or fulfillment partner. It lays out the buyer’s products, volumes, and requirements, then asks each 3PL to respond with capabilities and pricing. For 3PLs, the most important part happens before the RFP is sent: whether you’re on the list of providers invited to respond.
This post covers both sides. First, what a warehouse RFP typically includes and how buyers score responses. Then, what 3PLs can do to get invited more often.
What a warehouse RFP includes
Most warehouse and 3PL RFPs cover the same core sections:
Company overview. Who the buyer is, what they sell, and why they’re looking for a 3PL.
Product and SKU details. Number of SKUs, product dimensions and weight, storage needs, and any special handling.
Volumes. Inbound receipts, inventory levels, orders per day or month, and seasonal peaks.
Services required. Storage, pick and pack, kitting, returns, cross-docking, or value-added services.
Technology requirements. WMS capabilities, integrations with ecommerce platforms or ERP systems, and reporting.
Performance expectations. Accuracy, ship times, and the metrics used to measure them.
Pricing template. A standard format so responses can be compared side by side.
Timeline. Deadlines for questions, responses, site visits, and the final decision.
How buyers score 3PL responses
Every buyer weighs things differently, but most evaluate some version of the following.
Criteria
What buyers look for
Locations and network
Proximity to customers, ports, or plants, and shipping zones covered
Capacity and scalability
Space available now and room to grow during peak season
Storage, handling, pick and pack, and accessorial fees, plus minimums
Onboarding and support
Implementation timeline, account management, and communication
Financial stability and references
Confidence the partner will be around, plus customers who will vouch for them
Price matters, but it’s rarely the only deciding factor. Buyers are trusting a 3PL with their inventory and, for fulfillment, their customer experience. When pricing is close, experience, technology, and trust decide the award.
How buyers build the RFP list
Buyers typically invite a handful of 3PLs. They find them through referrals, consultants, industry events, and online research, including search engines and AI tools. A 3PL that doesn’t show up during that research usually doesn’t get the RFP.
That’s why winning more warehouse RFPs starts with marketing, not proposal writing.
How 3PLs get on more warehouse RFP shortlists
Make your specialty obvious
Buyers want a 3PL that already handles products like theirs. If you’re strong in food-grade storage, ecommerce fulfillment for health and beauty brands, or oversized industrial parts, say so clearly on your website and in every piece of marketing.
Answer RFP questions on your website
Buyers use your website to decide whether to invite you. Locations, capacity, technology, integrations, and accuracy metrics should all be easy to find. A website designed for warehousing buyers answers their questions before they ask.
Show up in search and AI answers
When a buyer searches “temperature-controlled 3PL in the Midwest” or asks ChatGPT for fulfillment providers that integrate with Shopify, you want to be in the results. SEO and AI search optimization help your company appear in both. Learn more in our guide to AI search for logistics companies.
Publish proof
Case studies with real results give buyers confidence that you can deliver. They also give consultants and colleagues something to share when they recommend you. Content marketing turns your wins into proof buyers can find.
Stay in front of target accounts
Identify the companies you want as customers and keep your name in front of their supply chain and operations leaders. Account-based marketing coordinates LinkedIn, email, and ads so you’re familiar long before they start an RFP.
Tips for responding to a warehouse RFP
Respond only where you fit. A focused response to the right RFP beats a stretch response to the wrong one.
Answer every question. Incomplete responses are easy to set aside.
Use the buyer’s pricing format. Make comparison easy.
Back up claims with data. Accuracy rates and client references carry more weight than promises.
Prepare for the site visit. Buyers want to see a clean, organized operation and meet the team they’ll work with.
Many of the same principles apply in transportation. See our post on freight RFPs for how carriers approach the shortlist.
Frequently asked questions
What is a warehouse RFP?
A warehouse RFP is a document a company sends to 3PLs to compare warehousing and fulfillment providers. It describes the company’s products, volumes, and requirements, and asks each 3PL to respond with capabilities and pricing.
What should a warehouse RFP include?
Company background, product and SKU details, order and inventory volumes, storage and service requirements, technology and integration needs, performance expectations, a pricing template, and the timeline for decisions.
How do companies choose a 3PL from an RFP?
They score each response on locations, capacity, product experience, technology, accuracy, pricing, onboarding, and references. Site visits and reference calls usually come before the final decision.
How can a 3PL get invited to more warehouse RFPs?
Be known before the RFP starts. Make your specialties and technology easy to find online, show up in search and AI answers, publish case studies, and stay in front of target accounts with LinkedIn and account-based marketing.
To sell warehouse space, a 3PL needs to know exactly what it has available, who that space fits best, and how to reach those buyers before a competitor does. The operators who fill capacity fastest don’t wait for referrals. They define their ideal customer, make their space easy to evaluate online, and run marketing that keeps inquiries coming even when the building is full.
This guide explains how to sell warehouse space if you run a 3PL, fulfillment operation, or warehouse. If you own a building and want to lease it to a single tenant, a commercial real estate broker is the right call. If you run the operation inside and need customers to fill it, read on.
Capacity comes and goes. A large customer leaves, a contract winds down, or a new building comes online. Every empty pallet position costs money, and filling it under pressure often means taking on customers who aren’t a good fit. A steady marketing program changes that.
How to sell warehouse space in 7 steps
Step 1: Know exactly what you’re selling
“We have space” isn’t enough for a buyer. Before you market anything, get specific:
How much space and where. Square footage or pallet positions, by building, with the markets each location serves.
What kind of space. Ambient, temperature-controlled, food-grade, hazmat, bonded, or high-security.
What services come with it. Storage only, pick and pack, kitting, cross-docking, returns, or full ecommerce fulfillment.
When it’s available. Now, next quarter, or as a new building opens.
These details become the backbone of your website, your ads, and your sales conversations.
Step 2: Decide who your space fits best
The best customers for your space are the ones your operation already serves well. Look at your most profitable accounts and find the pattern. Common buyer groups include:
Ecommerce and direct-to-consumer brands that need fast, accurate order fulfillment
Manufacturers that need overflow, regional, or just-in-time storage
Distributors expanding into a new market
Companies moving away from running their own warehouse
Pick one or two groups to focus on first. A food and beverage brand, a medical device maker, and a fast-growing apparel brand all ask different questions. Speaking to each one directly converts better than a generic pitch.
Step 3: Make your space easy to evaluate online
Most warehouse buyers research online long before they contact a 3PL. If your website lists the same services as everyone else, buyers can’t tell whether you’re the right fit, so they move on.
A strong 3PL website makes it easy to find:
Locations, with the regions and shipping zones each one covers
Available capacity and types of space
The products and industries you handle best
Your technology: WMS, integrations with ecommerce platforms, and real-time inventory visibility
When you need customers soon, paid search is the quickest lever. Buyers searching for terms like “3PL warehouse in Dallas” or “ecommerce fulfillment for supplements” are actively shopping. Ads tied to your locations and specialties put you in front of them within days.
Keep campaigns tight: target the markets where you have space, send clicks to pages that match the search, and track which campaigns produce real quote requests. Our guide to PPC for logistics companies covers the details, and paid ad management can run it for you.
Step 5: Build demand that lasts with SEO and AI search
Paid search fills space quickly. SEO keeps inquiries coming without paying for every click. Location pages, specialty pages, and helpful content help your 3PL show up when buyers search, and increasingly when they ask tools like ChatGPT or Google’s AI Overviews to recommend a warehouse partner.
Not every good-fit customer is searching right now. Targeted outreach reaches companies that match your ideal profile before they start shopping. That might mean a LinkedIn campaign aimed at supply chain leaders at mid-sized ecommerce brands, or an email sequence to manufacturers in your region.
A lead generation program keeps your pipeline full so the next vacancy doesn’t turn into a scramble.
Step 7: Follow up fast
Speed matters. Buyers often contact several 3PLs at once, and the first provider to respond with clear answers has the advantage. Set up alerts for new quote requests, respond the same day, and have answers ready for the questions buyers always ask: rates, minimums, onboarding timelines, and integrations.
Frequently asked questions
How do you sell warehouse space quickly?
Know exactly what you have available and who it fits best, then reach those buyers directly. Paid search, a website that lists available capacity, and targeted outreach to ecommerce brands, manufacturers, and distributors that match your specialty bring in inquiries fastest.
Who buys warehouse space from a 3PL?
Ecommerce brands that need fulfillment, manufacturers that need overflow or regional storage, distributors expanding into new markets, and companies that want to stop running their own warehouse.
Should a 3PL advertise available warehouse space?
Yes. Paid search and LinkedIn ads can put available capacity in front of buyers within days, while SEO and content build a steady flow of inquiries over time.
Why do warehouse buyers choose one 3PL over another?
Location, capacity, technology, accuracy, and experience with their type of product. The 3PLs that make those details easy to find and easy to verify get more serious inquiries.
If you want to keep your customers satisfied, you need to keep things moving in your facility. Use these tips to keep up the pace and increase warehouse and distribution center efficiency.
Highlights:
Speed has become the name of the game when it comes to staying competitive in the global supply chain.
Keep your priorities in mind when organizing your warehouse, including your fastest-moving products.
Digital technology can take the guesswork out of inventory and warehouse management with employees scanning products every step of the way.
Things can always be faster when you work in a warehouse or distribution center. Speed has become the name of the game when it comes to staying competitive in the global supply chain. Major players like Amazon and Walmart have distribution centers all over the world, pumping out packages at lightning speed.
If you want to keep your customers satisfied, you need to keep things moving in your warehouse or distribution center. Use these tips to keep up the pace and make your facility as efficient as possible.
1. Keep your warehouse organized
Nothing stymies operational efficiency like a poorly-organized warehouse. Your facility should have a thoroughly thought-out floor plan that your employees can navigate with ease. The space should be organized so that your staff members can access products and packages without getting in each other’s way. Your employees may need to process different orders simultaneously, so they should have plenty of space to avoid stepping on each other’s toes. Today’s warehouses are much larger than they were in the past, creating more space for speed and efficiency.
Items should be clearly labeled on the shelf and organized in a way that makes sense for your facility. You can group packages by their contents, destination or point of origin. This layout should make sense to your employees, so they’ll be able find the items they need without having to look at a spreadsheet.
2. Prioritize fast-moving products
Keep your priorities in mind when organizing your warehouse. Every element of your chosen layout should favor your fastest-moving products. Bestsellers don’t tend to sit on the shelf for very long, so make sure your employees can easily retrieve them at all times. Your employees shouldn’t have to go all the way to the back just to retrieve a product, especially if it’s one of your most popular items. You can help everyone save time by moving these fast-selling products to the front of your warehouse. They should be kept low to the ground and close to the loading dock.
Your entire warehouse layout should focus on moving better-performing products to the front, while keeping the less popular products at the back. Go over your inventory and rate your products based on how often your employees need to retrieve them. This should inform your thinking as you change the layout of your facility.
3. Automate the data collection process
Running a warehouse these days is all about data. Digital technology can take the guesswork out of inventory and warehouse management with employees scanning products every step of the way. Your facility should collect as much data on your products as possible, including where they’re coming from, when they arrive, what condition they are in, where they’re going and when they’re set to leave. You can use this data to keep tabs on the location of your products. At any given moment, you’ll know exactly how many products are being stored at your facility.
But in order to improve efficiency, you need to automate the data collection process as much as possible. Your staff members should automatically retrieve this data as they go about unloading and scanning items that have just arrived at the facility and getting them ready for the last leg of their journey. You can use handheld scanners and radio frequency identification tags to simplify this process. Automating data collection also reduces costly errors like inaccurate data entry.
Warehouse automation technology is already a $1.9 billion industry, and it’s expected to balloon to $22 billion by the year 2021. If you want to stay competitive, it might be time to invest in automation. You’ll have all the information you need at your fingertips without adding any additional steps to your operations.
4. Use inventory management software
As you collect all this data on the shipping containers and products moving in and out of your facility, you can save time by sending that info right to your company’s inventory management software. This technology helps you make sense of all the data in a matter of seconds. You can quickly see how many products are on the shelf, when shipments need to go out and when new shipments are due to arrive. Software programs are synced to your data collection devices, so you won’t have to worry about entering that information twice.
Certain artificially intelligent software programs can even help you anticipate future outcomes like inventory shortages, delivery delays and other potential problems. They keep a log of the history of your facility’s operations to help better predict what’s going to happen in the future.
5. Save time with cross docking
If you have fast-moving products coming through the door, you can save time with what’s known as cross docking. Instead of putting these products back on the shelf only to have your employees retrieve them hours later, direct them to a temporary staging area for scanning and inventory purposes. This temporary staging area should be close to the loading dock. When the products are ready for the next leg of their trip, your employees can quickly retrieve them and get them out the door without having to look for them on the shelf.
6. Increase visibility with better lighting
The key to operational efficiency isn’t always as complicated as it seems. Sometimes all you need is better lighting. Warehouses tend to have tall ceilings, and lighting the space, including all those individual shelves, can be a challenge. If you want to be speed up your warehouse operations, everyone should be able to see clearly as they go about their business. Staff members should be able to read labels and use containers without having to squint. Keeping the lights on also helps your employees stay awake, especially if they’re getting a shipment ready in the middle of the night.
Working towards warehouse efficiency
Making your warehouse more efficient starts with having the right layout in place. Your products should be organized according to their popularity. You should automatically collect data on your products as soon as they enter the facility. And always make sure your employees have enough space and light to do their jobs. Follow these steps and you’ll get orders out the door in record time.
Tracking these logistics metrics can help you identify and tackle issues in your warehouse before they become a problem.
This guest post comes to us from Demetra Mallios at Catch-Up Logistics, a full-service provider of ambient and temperature-controlled food-grade distribution and warehousing services.
The supply chain plays an integral part in maintaining a well-functioning organization. A well-structured and organized warehouse will help you achieve your distribution goals and adequately analyze metrics.
You can think of it like when you are trying to decide what to make for dinner, but cannot remember what food you have in your fridge. If your items are organized and you are aware of what is in your fridge (the warehouse), then you can properly make your dinner decision (packing and preparing for delivery distribution).
While you may be aware of some metrics to track, you might still be missing others. But, that’s where we come in with our list of the top 10 logistics metrics to measure supply chain efficiency in your warehouse.
10 logistics metrics to measure supply chain efficiency in your warehouse
1. On-Time Shipping
A distribution center’s primary objective is clear in its name: It must accurately and efficiently distribute goods that are coming in and out of the warehouse. In other words, the correct product must be placed on the correct transportation method at the appropriate time. In order to complete this task, you must monitor late shipping departures to the warehouse and early completion of freight loading time.
Although it may seem that finishing shipment loads ahead of schedule is a good idea, in reality it could affect the departure and duties of other shipments. So, your business can be sure to monitor these shipment details via a 3PL system. You should also take into account the varying loading and transportation times needed to shift freights before out-bounding product. (Because delaying shipping can be just as bad as receiving the birthday present you ordered for your mom days later, timing matters.)
2. Warehouse Capacity
While there are measures out there to monitor inventory, it is essential that you complete manual observation as well. A distribution center needs to be aware of its ability to increase or decrease its loading times, create more storage space, and accurately track inventory. Currently, many distribution centers incorporate RFID measures to check inventory. However, you should not underestimate the need for manual observation in order to successfully analyze the listed criteria.
3. Accurate Order Fulfillment
Another highly important metric is, of course, the accuracy of the order picking processes. When your employee goes to retrieve a pallet of a specific product, you want to be able to measure how quickly and accurately that task is completed. However, realistically, human error will sometimes occur, which makes the tracking of the picking and moving process vital. A distribution center does not want to be in a situation in which it is unaware of lost, damaged, or misplaced product.
4. Properly Storing Incoming Product
This metric relates to the previous one about order fulfillment, in that it requires a similar tracking process. Accurate inbound storage is essential for accurate outbound deliveries. Without a well-organized inventory in the receiving end, the outbound end will have trouble accurately and efficiently fulfilling orders.
Additionally, the incoming product needs to be recorded correctly, so that inventory capacity can consistently be updated. Furthermore, incoming product and procedures can vary depending on the type of warehouse and storage facility you are operating. For instance, Catch-Up Logistics focuses on food storage. Therefore, it is essential that the product is placed in the correct freezer, cooler, or ambient temperature zone. If this is not done properly, not only will we ruin the product, but we will also lose credibility in our ability to provide high-quality warehousing services.
5. Peaks in Warehouse Capacity
Changes in product demand can, of course, influence the amount of inventory you are willing to hold in your warehouse distribution center. For instance, the holiday season will result in a peak in inventory, as companies need to store more seasonal product. With Catch-Up Logistics, Thanksgiving is a prime example, as our turkey inventory grows and distribution needs to be timely.
6. Total and Individual Cycle Times
In order to be sure that your warehouse is running efficiently, you should be tracking the cycle times. The total cycle time refers to the time needed to properly place the product in inventory from its time of arrival and then ship it from the distribution center. Individually, you can record the dock-to-load time, picking, packing, and preparing the freight for shipping times. This will enable you to see whether or not a certain process is underperforming and can be improved.
7. Damaged Products
You are bound to deal with damaged product at some point while either receiving inventory or moving it. Thus, it is important to record whether or not the product was already damaged upon arrival or if it was due to mishandling in the distribution center. Knowing this data and taking proper action to reduce such mishaps will help improve the efficiency of your warehouse.
8. Employee Turnover Rate
Because working in a distribution center can be exhausting, it is common for employees to search for other job opportunities. However, being able to minimize the turnover with incentives and an improved working environment can benefit the business. It is best to try and maintain employment, instead of consistently searching for new workers and spending the time and resources to train them, only to have them leave in a few months.
9. Accurate Tracking of Trailers
If your warehouse distribution center makes use of trailers for shipping product, it is essential that you are aware of their location at all times. (For instance, Catch-Up Logistics utilizes trailers for shipping.) A great method for tracking this information is through the use of a GPS tracking system.
10. Recording Temperatures
If you have a food storage warehouse facility, it is essential to install a temperature-monitoring system. At Catch-Up Logistics, we monitor the daily temperatures of all the freezers, coolers, and ambient temperature storage spaces to ensure the optimal temperature for proper food storage and health reasons. Additionally, such a system will notify you of any irregular changes in temperature so that you can immediately solve an arising problem before the food product becomes unusable.
There are many aspects to maintaining a well-functioning warehouse distribution system, as demonstrated from the list of metrics above. Although these tracking suggestions may at first appear excessive and time-consuming, they will help you improve the efficiency of your warehouse.
Being aware of potential issues will allow you to tackle the problem before it has a chance to further develop. So, what are you waiting for? If you have not already begun using these metrics, you should consider implementing them as soon as possible!
From the military designs of the early 20th century to modern commercial development in 2017, drones have been making their presence widely known in the market. While military drones may have paved the way for commercial drone development, they have quite different purposes.
Drones provide much value, where traditional alternatives (such as helicopters or planes) fall short. Drone usage in supply chain optimization is still in its infancy. However, I am not convinced that drones are the solution going forward.
Note: For my analysis, I will be focusing on commercial drone usage in the supply chain.
A Timeline of Major Military Drone Development
1918: Kettering Bug. First modern drone concept used as a “flying bomb.”
1935: DH82B Queen Bee. Used as target practice for anti-aircraft weapon training.
Drones provide many advantages, such as mobility, cost effectiveness, ability to move goods, and camera technology. Although drone development is rapidly advancing, many challenges currently exist. Limited battery life, constrained operational range, collision liability, proneness to hacking, and even invasion of privacy are all legitimate challenges.
Commercial Drone Fast Facts
Made of light composite materials.
Typically have two to five rotors.
Controlled by either remote control or GPS.
Flight time ranges, but generally falls between 12-27 minutes.
Battery powered.
Operational range varies from 200 meters to 7 kilometers.
Current Drone Usage in the Supply Chain
Large retailers such as Walmart and Amazon are already investing significant capital in drone technology. On December 6, 2016, Amazon successfully completed its first beta trial of drone package delivery, called Prime Air, in Cambridge, U.K.
Here’s how it works:
Customers place their orders online as usual.
The package is prepped at the regional fulfillment center.
Drones are then dispatched from the center with the package.
Customers place QR codes on their property to indicate the drop-off point.
The package is delivered at the customer’s address within 30 minutes.
The drone is operated by GPS and handles up to five pounds of cargo.
Walmart, on the other hand, is taking a different approach to managing their supply chain. Instead of focusing on package delivery, Walmart is testing the use of drones to monitor inventory in their warehouses.
Employees currently catalog merchandise with hand-held scanning devices and often need to use forklifts in the warehouse. Instead, the drone could move up and down the shelves cataloging inventory at a much quicker rate. Walmart claims that the drones “could help catalog in as little as a day what now takes employees about a month.” This program is expected to begin in at least one distribution center in 2017.
What about Legal Issues?
In the United States, commercial drone usage is still pretty limited. Below is a highlight of Federal Aviation Administration (FAA) commercial drone regulations.
Must have a Remote Pilot (no GPS allowed).
Must be less than 55 lbs.
Must undergo pre-flight check.
Must keep aircraft in sight.*
Must fly under 400 feet.*
Must fly during the day.*
Must not fly over people.*
Must not fly from a moving vehicle.*
*Indicates that these regulations can be waived.
Supply chain drone usage in the United States is currently limited due to these regulations. In the future, I expect many of these regulations to ease or change outright with advancements in drone technology. When this will occur is unknown.
However, other countries such as the United Kingdom are quicker to enact regulations by virtue of the Civil Aviation Authority (CAA). As a result, companies like Amazon have already been testing drones for supply chain optimization there.
Significant Hurdles
Although drone technology is gaining much media attention, there are legitimate challenges to drone commercialization in the supply chain.
While many legislative bodies attempt to develop drone regulations, concrete legislation is lacking in many countries due to fluid technological changes. In order for the market to fully develop, a legislative framework needs to be established. Companies will be reluctant to invest significantly in drone technology until legal parameters are established.
Another challenge is in regard to insurance and liability. With potentially thousands of (unmanned) drones flying only hundreds feet above the ground, insurance will surely be required. In the event of a drone collision with individuals, property, aircraft, or other drones, who then is liable? If the drone is piloted by a human, would he/she be liable? On the other hand, if the drone is GPS-enabled, would the technology be to blame? Surely some of these questions will be answered in contracts between insurance companies and suppliers, but with such uncertainty, premiums will undoubtedly be high.
Then there’s the question of rural vs. urban delivery. Amazon Prime Air is predominately testing drone delivery in rural areas. However, 80.7% of U.S. and 90.1% of the U.K. population live in urban areas.
Package deliveries in urban areas are via mailbox, left by the door, or hidden (to avoid theft). In other words, human judgement is used to deliver the package most appropriately. For customers in large apartment buildings, drone delivery is very limited. Perhaps these limitations could be offset with designated landing areas on rooftops, despite the fact that additional effort by the customer may be needed to retrieve the package.
Last, but certainly not least, is the impact of weather conditions. Wind, rain, snow, and extreme cold/heat all impact drone performance. Since current drones are not very heavy, any significant wind will 1) blow the drone around making it harder to control, and 2) use additional battery life to remain stable. Since drones incorporate many electronic components, rain and snow increase the chance of malfunction.
Furthermore, most drones utilize Lithium Polymer batteries — these batteries are prone to weaker performance in extreme cold and heat. According to Batteryuniversity.com, most Li-ion batteries stop functioning below -4°F. Additionally, battery performance is reduced 40% at 104°F and 50% at 113°F. The combination of all these weather conditions certainly provides logistical challenges for drone delivery and supply chain usage.
Is There Any Hope for Drones in the Supply Chain?
The short answer is yes, but in a limited manner.
With the logistical and technological challenges regarding drone delivery, I just can’t see e-commerce firms effectively managing the process outside of rural areas with optimal weather conditions. In the future, this could change, but it would require significant legal, technological, and customer adjustment for the process to be superior over the current state.
However, drones open other opportunities for supply chain optimization, such as warehouse inventory management (as with Walmart), infrastructure monitoring, surveying, or even security. For example, shipping firms such as FedEx or UPS could utilize drones to monitor traffic and optimize drivers’ routes based on real-time data. Additionally, energy companies could use drones — as opposed to helicopters or planes — to monitor pipelines. Finally, engineers could use drones to inspect dams, highways, and buildings more efficiently.
I have no doubt that the drone market will continue to expand. According to Visualcapitalist.com, by 2025, the U.S. economy is expected to see an increase of $82 billion and creation of at least 100,000 jobs. However, their impact to supply chain optimization remains vague to me.
About the Author
Matt Steckowych graduated from the University of New Hampshire in 2011, with a B.S. in Business Administration and is currently enrolled in the part-time M.B.A. program. He is a Salesforce.com Administrator at John Hancock in Portsmouth, NH.
