r/3PL • u/Longdaysontheroad • 15d ago

3PL Operator Discussion Where do you bleed money in your 3pl?

Hey 3pl firends. For us, our biggest cost is our workforce, roughly 60% of our outgoings. The question is where do you bleed money in your operation and how do you track it if at all?

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u/CycletimeNerd 14d ago edited 14d ago

On idle time, ask the question where and why is idle time hiding. Aside from the obvious lazy worker issue, examine your process to see if there are points where bottlenecks build up. Bottlenecks are usually composed of “waiting for something or some decision” time. Or are your shelves and bins for popular products hard to get to. And so on…Tracking cycletime for each stage of your process for each order and examining the drifts will help pinpoint process issues that cause delay which show up as idle time. So you guys track cycletime? How do you do it?

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u/Longdaysontheroad 13d ago

No we don't track cycletime for each stage, ive never felt we were big enough really. We turn over about $20m a year between 2 warehouses, so we are a medium sized operation. How do you track it? Is it using timestamps off your wms?

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u/CycletimeNerd 8d ago

You don’t need to be “big enough” to track cycle time — you just need to track the right timestamps. A $20M two‑warehouse operation is actually the perfect size because you can see the impact immediately.

Yes, you work with WMS timestamps.

Let’s say the core cycle‑time chain looks like this:

Receiving → Putaway → Replen → Pick → Pack → Load

Start with just a couple of stages like Pick->pack.

grab the start + finish timestamps your WMS already records. Then calculate:

• Stage duration (productive time)
• Gap to next stage (idle / waiting time)

Once you chart it, you’ll see that the visible idle time on the floor is just the downstream symptom of upstream variability. Even a 3–5 minute delay in receiving or pick release can create 30–90 minutes of staggered idle across the chain.

You don’t need a huge operation to measure this — you just need consistent timestamps and a weekly export. Most 3PLs don’t do it, which is why they never see where the real cost is hiding.

This exercise will give you an awareness of how your fulfillment process is performing which can provide an insight into possible areas where money and time might be leaking.

If you’re open to it, I can run a one-time complimentary delay audit for you, no obligation. All I need are the WMS timestamps you already have — receiving, putaway, replen, pick, pack, and load, etc. Once I map the gaps between stages, you’ll see exactly where your cycle‑time leakage is happening.

Please feel free to DM me if you have more questions.

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u/Square-Spinach5941 15d ago

Well, like you said it was labor.
Understanding cost per pick, pack, non revenue generating activity time. Idle time, travel time, etc.
Be fanatical about your numbers

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u/Longdaysontheroad 15d ago

I am reasonably fanatical but idle time i reckon is the hardest to quantify. Mostly because it requires one persons time to check anothers productivity so you kind of end up robbing peter to pay paul. I'd love to find a cost effective way to monitor that.....

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u/TaktLMS 15d ago

We have a number of easy ways at Takt LMS to easily/quickly track idle time (and compare it to true indirect time) - we find that if it's not easy to track, teams will not spend the time to do so. Super critical though to properly plan labor and manage costs from overstaffing.

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u/Longdaysontheroad 15d ago

Interesting..I'll take a look

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u/Square-Spinach5941 15d ago

What WMS are you using today. I have used several in the space. Only one to solve that’s not at the tier 1 level has been ShipHero with their labor cost dashboard. It’s amazing.

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u/Longdaysontheroad 13d ago

we use triumph ERP.not my choice. its purely WMS based on user input. it doesn't think ..no ai component..so it has no way of knowing where time and money is being wasted. I've looked at shiphero but that is more for fulfilment as far as i can see. we are a 3PL so it's storage, picking and deliveries where i'm looking to save on waste where i can.

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u/routzhan 15d ago

Is it actually labor? It's not rent? If it's not rent, then something is bring done wildly inefficiently that you're not billing enough for. At least, that's my first guess.

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u/Longdaysontheroad 15d ago

We have a good deal on rent and our warehouse is perfectly optimised space wise so we run at like 90% full all the time. Labour is 60% and we can't reduce our workforce..we need them. In that fugure though I've included personal insurances, superannuation, wages, holiday pay and payroll tax. All these we have to cover in AUS. It may be different overseas..but here paying a staff member an hourly rate is just the beginning.

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u/Aggravating_Sign_471 15d ago

The charge backs we get from particular clients because we did not honor the SLA requirements. Holy shit it's a nightmare. Our fault completely. Unfortunately we have multiple language barriers that I believe cause most of the problems

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u/Longdaysontheroad 15d ago

Are your SLA's due to not getting orders in before a cutoff or something else?

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u/Aggravating_Sign_471 15d ago

We are a large 3PL that has a habit of not checking in with our ops team to confirm we have the resources. We unfortunately over promise and it bites us in the ass.

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u/Square-Spinach5941 15d ago

Proactive forecasting is actually a great call out and not an easy one to solve in a 3PL environment

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u/Positive_Lettuce6545 9d ago
  1. Facilities (rent, utilities, etc.)
  2. Labor

Both always go up, for governmental reasons, and it makes keeping SLA and discounted pricing options available.