How warehouse automation for 3PLs improves efficiency and cuts costs

High turnover rates, an aging workforce, and shifting worker expectations have also made it more challenging to keep pace. For third-party logistics (3PL) providers managing a network of warehouses, these trends mean manual processes and outdated systems are no longer sustainable.

The solution? AI-driven job optimization and sophisticated warehouse management systems (WMS) like Logiwa IO. By integrating robotics, smart picking, and predictive analytics provided by these systems, 3PLs can reduce operational costs, increase accuracy, and significantly boost their bottom line.

This guide explores why 3PLs can’t afford to ignore automation and how warehouse automation for 3PLs unlocks efficiency. You’ll also learn why AI-driven job optimization is the next frontier for 3PLs and why you should partner with WMS Logiwa IO for advanced 3PL automation.

Why 3PLs can’t afford to ignore automation

Automation may seem daunting, especially for smaller providers. Still, 3PLs can’t afford to ignore it. Here’s why:

• Adapting to ecommerce dynamics: The exploding popularity of ecommerce has transformed logistics into a race for speed and accuracy. Consumers now expect same or next-day delivery with real-time visibility into their orders. To meet these requirements and remain competitive, 3PLs need supply chain automation tools that streamline picking, packing, and shipping.
• Navigating labor constraints: Skilled warehouse labor is expensive and increasingly scarce, due to the aging workforce, changing employee expectations, and younger generations’ preference for less draining work. Automation can address skilled labor shortages by reducing reliance on manual labor and reallocating employees to higher-level tasks.
• Gaining a competitive edge: Automation empowers 3PLs to differentiate themselves on price as well as fulfillment excellence. That’s because it enables faster order turnaround, fewer errors, and organized inventory management, all of which make a provider more attractive to clients.
• Overcoming traditional bottlenecks: Manual errors, slow processing times, and poor resource usage cut directly into 3PL margins, limiting scalability and customer satisfaction. Fortunately, 3PLs can avoid these pain points and transform traditional bottlenecks into opportunities by replacing outdated workflows with AI-powered automated workflows.

Request a free demo to learn more about Logiwa WMS.

Unlocking efficiency with comprehensive warehouse automation

The right warehouse automation software can unlock efficiencies in many ways. Here’s how this happens.

Boosting throughput and speed

Automated material handling systems, including conveyors, automated guided vehicles (AGVs), and autonomous mobile robots (AMRs), efficiently and safely transport goods throughout warehouses. When paired with a comprehensive warehouse automation system like Logiwa IO, these technologies streamline receiving, putaway, and shipping processes. As a result, you can ship orders faster and more accurately.

Enhancing inventory accuracy and management

Inventory accuracy and management quality can directly affect 3PL client satisfaction and the bottom line. The more miscounts, misplaced items, and inefficient storage you have, the slower fulfillment becomes. As a result, costly errors are more likely to ripple through the supply chain, chipping into your earnings and reputation. 

Fortunately, warehouse automation can address these pain points by providing:

• Real-time inventory tracking with barcode scanning: Integrated with Logiwa IO, barcode systems provide up-to-the-minute insight into stock levels and locations, eliminating blind spots.Cloud-based WMS platforms with real-time visibility allow operators to make proactive decisions, reducing errors and delays.
• Automated cycle counting: Automated robots and smart systems track stock levels with precision, reducing shrinkage and preventing financial losses caused by inaccurate counts. By removing the need for disruptive manual audits, warehouses maintain accuracy while keeping workflows running at full speed.
• Optimized space utilization: Intelligent slotting and directed putaway mean products are stored in the most efficient positions. As such, pickers and robots don’t need to travel as far to finish one order. This also makes the best use of every square inch of your warehouse.

Revolutionizing picking and packing

Order picking is one of the most labor-intensive tasks for 3PLs. Pickers often walk long distances, leading to fatigue, burnout, and costly errors that result in returns and margin loss. Warehouse automation can revolutionize picking and packing by providing high-efficiency picking methods and tools like:

• Batch picking, zone picking, and wave picking to fit operational needs
• Smart tools like pick-to-light and voice picking to reduce errors and boost productivity
• AI-driven smart-picking strategies that cut travel time and improve job sequencing

The central role of a robust WMS

The backbone of comprehensive warehouse automation is a robust warehouse management system (WMS), a software designed to control and manage daily warehouse operations. It serves as the company’s operational brain and centralized hub, coordinating warehouse robotics, smart picking tools, and automated workflows into one seamless ecosystem. In doing so, it ensures efficiency, real-time visibility, and scalability across every aspect of 3PL operations.

AI-driven job optimization is the next frontier for 3PLs

AI-driven job optimization helps warehouses work faster, smarter, and with less effort. Here’s how it delivers results.

The power of AI in job optimization

AI algorithms can quickly and accurately analyze massive datasets, including order volumes, SKU sizes, storage rules, and picking routes, to reduce unnecessary travel and optimize task sequencing for robots and employees. 

Case in point: Logiwa IO’s AI-driven job optimization has led to operational efficiency gains of up to 58% compared to traditional manual processes.

Smart picking and dynamic task assignment

Traditional picking methods often require pickers to travel long distances for small tasks, resulting in downtime, low efficiency, and high burnout. AI-driven systems speed up fulfillment by generating high-efficiency pick lists and optimized job waves. 

For example, with Logiwa IO, 3PLs can deploy advanced strategies like batch picking, which groups multiple orders into a single run to reduce unnecessary travel. They can also implement tote-based workflows, including single-item picks, identical order picks, and multi-item cluster picks, which make order consolidation faster and more accurate.

AI also brings adaptive learning—it continuously refines task assignments and picks routes based on real-time performance data, decreasing burnout and improving accuracy, efficiency, and throughput over time.

Beyond picking with predictive analytics and demand forecasting

Besides refining task assignment and execution, AI can anticipate future demand. By predicting order spikes and peak periods, 3PLs can right-size staffing, pre-position inventory, and allocate robotics where they’ll have the greatest impact. The result? Fewer stockouts and overstocks, smoother peak management, and long-term operational cost reduction.

Partnering with Logiwa for advanced 3PL automation

Now that we’ve explored how automation transforms 3PL operations, the next step is choosing the right WMS. Here’s how adopting Logiwa IO can help you unlock the benefits of advanced 3PL automation.

Real-time visibility and control

As a leading WMS, Logiwa IO unifies inventory, orders, and operational data in one hub. This visibility enables 3PLs to make data-driven decisions proactively, preventing bottlenecks from snowballing and safeguarding client satisfaction.

Multi-client management and customizable billing

3PL providers juggle multiple clients with different needs, which can complicate operations. Logiwa IO streamlines this process by making it easy to track each client’s activity, generate accurate bills, and provide clear, transparent reporting.

Seamless integration and scalability

3PLs need technology that grows with them without disrupting service. Logiwa IO integrates seamlessly with major e-commerce platforms, ERPs, and shipping carriers to ensure smooth connectivity. As a cloud-native solution, it scales up or down with market demand during peak seasons, client onboarding, and other critical periods.

Comprehensive automation rules

Logiwa IO’s built-in automation rules optimize every warehouse task, from inbound receiving through final shipping. As a result, 3PLs can handle higher order volumes with fewer errors, faster turnaround times, and lower labor costs while delivering consistent service to every client.

Supercharge operations with Logiwa IO

Powered by AI-driven job optimization and advanced WMS platforms like Logiwa IO, warehouse automation is transforming 3PL operations. By streamlining processes, reducing labor demands, and improving accuracy, warehouse automation helps providers work more efficiently, lower costs, and keep clients happier—things that are now essential for long-term competitiveness and fulfillment excellence. 

Schedule a Logiwa IO demo today to see how warehouse automation can supercharge 3PL efficiency and cut costs.

FAQs on improving 3PL’s efficiency with automation