Integrated with an organization’s warehousing, fulfillment and transportation activities, third-party logistics providers (3PLs) support a wide range of logistics activities for companies across all industries. Most recently, these operations are being called upon to support the growing ecommerce sector, which is expected to get products from point of origin to a customer’s location without the support of a brick-and-mortar location.
David Buss, DB Schenker USA CEO explains, “With the right 3PL partner in place, organizations can effectively outsource tasks like order picking and packing; kitting and assembly; inventory management; returns management; rush deliveries; and other logistics-related activities.” From small online apparel merchants to midsized pet suppliers to large, Fortune 500 entities, the companies that can benefit from a reliable, experienced 3PL are many and varied.
6 Things to Look for in a 3PL
Like any business relationship, a strong bond with a 3PL starts with selecting a provider that understands your organization, its needs, its logistics challenges and the gaps that it wants to fill. By putting time and effort into the selection process, companies can be assured that they’re getting the best possible fit for their organizational and operational needs.
Here are six more things that all companies should look for in a 3PL:
- A solid industry track record. Because your 3PL will become a vitally important part of your business’ success, the relationship you form with this provider has to be built on trust. Global Trade Daily suggests asking these questions to learn more about your potential partner’s track record:
- Is it an established player in the market?
- Does it hold accreditations from recognized industry bodies?
- Can it provide case studies with example success stories working with companies similar to your own, and in your regions of interest?
- What results is the company delivering for those clients, and how do these compare with your expectations?
- Strong expertise. Logistics providers offer a variety of different services for a wide range of companies. One might offer a limited number of services but specialize in your specific industry and/or geographies of interest, Global Trade Daily points out, where another might offer an expansive range of services that may make your supply chain more scalable. “Consider your specific business needs and goals, understand how logistics will best support these,” the publication recommends, “and then you can work to understand what kind of 3PL provider and services you will need.”
- A wide network. The best providers maintain well-established networks that can uphold a seamless logistics operation across multiple locations—either regionally or globally. “One 3PL may have an unrivaled footprint in one state, but not be able to compete with others who specialize in country-wide services,” Global Trade Daily points out. “Again, consider your own needs and find a 3PL that can meet those requirements.”
- A company that takes safety and security seriously. Not only should your 3PL have all necessary safety training and compliances for its employees, but it should also ensure protection of your data and resources, the US Chamber of Commerce “Partners [that] have certifications including FDA, DEA and PCI — as well as HAZMAT,” it adds, “will take safety and security seriously.”
- Good customer service. A healthy, productive business relationship is always based on respect and good customer service. “3PLs with eager-to-help, creative problem-solving team members can save you money and provide an enjoyable working relationship,” the US COC states, noting that the right 3PL partner should not only meet all of your current and future business needs, but also maintain a positive reputation in the industry.
- Cares about your success. Logistics partners may not directly impact a customer’s perception of your products, but they can easily enhance or tarnish the reputation that you strive to develop with those customers. “For instance, it’s one thing for freight to be damaged or missing,” Sydney Wess writes in Inbound Logistics. “It’s much more severe when your company isn’t aware of the issue before customers complain.”
Meeting Customer Demands
As Wess writes, “Customers will associate any shortcomings with your brand, not their outsourced services. As consumers’ patience with delivery times wanes and desire for a wider array of products grows, transparency from your chosen carrier or 3PL is essential to maintaining and growing your customer base.”
Buss concludes, “Don’t forget that your logistics partner will be representing your company in its ability to transport and handle your products. This is just one of many reasons why it’s so important to put the time and energy into finding the right partner.”