A third-party logistics provider has many additional opportunities to keep up with personal business goals. A 3PL has also the ability to track available loads quicker and find a cheaper rate then one could find on their own. Using a 3PL can reduce fixed and variable logistics costs along with reducing inventory costs as well. The way that these 3PL companies are able to reduce such costs is due to the level of technology they implement that allows to fulfill the needs of each shipper and carrier they partner with. When choosing to partner with a 3PL you want to be positive you are selecting the 3PL whose services align closest to your businesses’ goals.
What level of technology is this 3PL using?
It is important to asses the level of technology that the chosen 3PL is using. If they are a company that is working with lots of brokers, carriers and shippers then the equipment their using should be top of the line to stay in competition with their competitors. Take a closer look at how much this company is spending on new equipment to advance their current capabilities. Ask yourself, do these capabilities integrate with such prerequisites that you require to maintain if not grow current inventory and tools?
Is this 3PL aligned well to stay on pace with your current growth?
Flexibility and scalability are critical as the selected 3PL needs to handle existing requirements as well as take on new responsivities to advance the level of growth of your current business. You want to identify a 3PL that can immediately help advance the growth of your current operations. Growth opens the opportunity to expand to new markets and partnering with a 3PL that can help expand with you will allow for clients, carriers, shippers alike to understand the specific goals and deliver in response to support services. A good 3PL will be able to assist a company amidst peak seasons and holidays to ensure that all supply has been delivered efficiently.
How does the 3PL rank financially?
A 3PL is a capital-invested business that has a lot of costs in relation to operating expenses. A 3PL must be financially stable as well as focused on their own economic situation as well as potential business situations. For a 3PL to be classified as financially stable they will have their own resources, their own carriers and their own shippers, illustrating they are successful at running and operating their own business. The 3PL should be in the position to take on their own capabilities along with the services and capabilities to provide the desired service. It might be worth while to ask the 3PL you are considering to provide you with a P&L over the past few years so you can identify any positive trends and or concerns. This will also disclose positive relationships amongst their chosen carriers as well as the strength of leadership at the 3PL.
What is the 3PL plan in the event of a serious issue?
The disruptions supply chains experience can have an impact on a company’s bottom line. It is critical to know how each 3PL partner is prepared to deal with an issue from a logistical standpoint. Things to consider are labor shortages, accidents that occur while in route delivering freight. It will be incredibly beneficial to ask these questions to determine how the selected 3PL is prepared to handle an issue of this level.
What is the highest level of skill set at this current 3PL?
Perhaps the biggest issue for both 3PL and clients is that there is a limited amount of supply chain and logistics talent in the industry. When selecting a partner for a 3PL the amount of knowledge and available skillset will help transform the business. Looking closely at the talent of this 3PL what additional ideas and offers can they provide that you were unable to obtain at a different location. What is the level of planning that the 3PL has to ensure a smooth and successful delivery across all modes? What kind of investments are they making to advance the growth and knowledge of their team members?
What kind of business intelligence is available beyond the basics?
With the constant advancement of technology how are the perspective 3PLs offering business intelligence to their clients through industry leading practices and trends? What kind of services are they using? Is it reputable? Are you familiar with how to operate the specific software’s? If this 3PL is completing additional market research, are they disclosing their findings with you? How easy is it to contact and collaborate with the team at your 3PL?
Where do their metrics rank?
Prior to deciding on a 3PL take a deep dive into potential objectives against the metrics that are most important to you and your business. Ask critical questions such as how will they handle a products location if a recall has been issued? What is their response time based on order volume and rate quotes? How often do they experience issues with double brokers? What kind of improvements are they making to make them the most desirable 3PL? Do they have the experience and flexibility to accommodate the needs specific to your individual business?
Overall, a 3PL can save you lots of time in the process of transporting goods and services, as well as help grow your business to new heights now that some of the additional stress is removed. While partnering with a 3PL has many benefits it is important you select one that has the most potential to improve your business.
TIPS FOR IDENTIFYING THE IDEAL 3PL FOR YOUR CARRIERS NEEDS