How To Choose A 3PL Provider You Can Count On

As your business grows, you may be thinking of hiring a third-party logistics partner. Here’s how to choose a 3PL provider you can count on.

Increasing demands on your logistics needs will eventually lead to a partnership with a 3PL service. As a specialist in supply chain management, a well rounded and responsive third party logistics provider can allow you to move your products through the supply chain as your business expands.

Choosing A 3PL Company That Fits

Choosing a good 3PL provider will help to increase your business’ efficiencies, control costs and allow you to concentrate on keeping your customers happy.

Here are the key points to follow, and the characteristics to look for that set the better 3PL providers apart:

Understand Your Own 3PL Needs

Without a clear vision of exactly how you see your business growing, and how your products will need to move through the supply chain, choosing the process of choosing right logistics provider becomes less of a calculated decision and more of a gamble.

Forecasting sales and projecting future shipping volumes should be less guess work and more science as dictated by your known business trends.

In other words, having a better idea of where you expect to be will enable you to choose a logistics company that can grow with you.

Research 3PL Provider Options

With a better understanding of your own business needs, you can filter through the various services and specialized expertise offered by third party logistics providers.

As a shipper, you can use an RFP (request for proposal) to find the best 3PL provider to meet your needs. Better companies will have a track record of reliability, proven processes and stable ongoing relationships with carriers.

Pick A Provider That’s Compatible

Just as individual people have their own personalities, so do businesses – every business’ culture is a product of those who created it. Picking a 3Pl company that aligns with your values will help foster trust and allow better communication.

Between shippers and logistics partners, having a good working relationship from a similar cultural standpoint will certainly prove beneficial when tested.

Know Your Provider Can Accommodate All Your Needs

Rather than spreading your logistical needs across multiple services, better efficiency lies in streamlined touch-points.

A single 3PL provider that has a broad range of capabilities will have greater flexibility in customizing solutions to fit your particular needs, and be able to handle the changes that happen as your business scales up.

Make Sure You Have Compatible Technologies

Over time, the very nature of technology is fluid and changes quickly. Most notably, the logistics industry has seen massive benefits in shipment tracking over the last few short decades. With advancements in WMS (warehouse management systems) and EDI (electronic dat interchange) systems, the movement of products through the supply chain is both sophisticated and streamlined.

Working with a logistics company that can integrate with your systems is a major bonus towards growth and efficiency. Moreover, a good 3PL provider will not only be using current technology you can leverage as you grow, but provide business intelligence on your shipments that helps you make smarter decisions.

They Have the Ability to Scale

A good 3PL service provider will also have the room and means for you to grow along with your shipping needs. Sharing space is a common practice that reduces overhead costs for both parties, but when your own operations scale up make sure your logistics partner has the room and capability to accommodate you accordingly.

They’re Committed to Improvement

Choose a 3PL provider that takes the long view towards improving their own operations and has adopted an attitude of continuous development. Quality management and a commitment to provide excellent client service are assets that will allow you to thrive against the competition.

They’re Agile

Because not every widget that makes up the whole arrives exactly on time every time, there has to be room for contingency. The days of sitting on idle warehouse stock are long gone, replaced by optimizing inventory levels for just-in-time manufacturing and build-to-order solutions.

By leverage postponement strategies, your 3PL partner can help with production flow-throughs and also help reduce inventory carrying costs.

They Have Omnichannel Logistics Capabilities

As mentioned previously, technology is changing the nature of logistics at all levels. Because of the need for shipping transparency, omnichannel logistics technology is unifying inventory tracking , logistics and distribution across sales channels.

Choose a provider that understands the intricacies of omnichannel commerce and how to deliver the best customer experience – preferably with experience with your business or industry category.

They’re Financially Stable

A 3PL company that has a long history of hanging in is one thing, a 3PL company that has a history of growth through reinvesting in equipment, facilities, manpower, systems expertise and financial stability is another.

The results of good management carry a business through the harder times, and as we’ve seen in the last few years anything can happen. The types of third party businesses that continually invest in themselves are the ones you want to do business with.

They Have Location Diversification

Having multiple locations and types of facilities provides a high degree of ability to handle your current and future shipping needs effectively. Thus, a better choice in a 3PL partner will be one that has set up a network of strategically located facilities and warehouses that are already a good match for your shipping criteria.

Focus on Customer Service