4 Questions You Should Be Asking Your 3PL ProviderWritten by Paul Forand
If, like a lot of businesses today, you're finding that partnering with a Third-Party Logistics (3PL) firm makes sense, it opens up a new question: Which one to choose?
As freight prices have gone up and carriers have gained more power over their pricing, the 3PL market has grown accordingly. In fact, it's grown substantially since 1996!
In a booming industry, that necessarily means there will be a lot of players who lack the experience, the expertise, or the connections to be effective at assisting you in controlling your overall cost and creating value. To see the true benefits of a 3PL partnership, you need a 3PL who's up to the task and focused on truly partnering with your company.
Four Key Questions To Ask Before Choosing A 3PL
1 - How long have you been in business?
This is probably the first question to ask, and if they've been around for less than 5-10 years, be leery. Some of the oldest firms in the industry have been here for several decades, and besides the experience difference, they're going to have proven value propositions.
The 3PLs who've been around the block will be known as reliable customers to their own carrier partners, and that can bring additional benefits to you, the shipper.
2 - What references / case studies do you have?
A credible 3PL should have no difficulty producing testimonials or hard numbers to demonstrate their effectiveness. And the more numbers, the better. The choice to partner with a 3PL is ultimately a bottom-line decision, so they need to show bottom-line results and value.
Pay special attention to the longevity of those results. It's easy for some consultants and experts to enact short-term fixes or tweaks that produce quick returns, but won't show steady results over time. Good 3PLs bring benefits that keep producing results.
3 - What other services do you offer?
Today's top 3PLs are about more than simply acting as your broker. They want to work with a company to improve their internal processes, their technological capabilities, and continue to look for ways to streamline their operations.
In most cases, these upgrades also translate into an improved customer experience: better customer management, faster shipments, and often lower overall cost.
These are some of the services a 3PL can provide:
- Inbound, outbound and third party expense control
- Freight bill auditing and reporting
- Rate stabilization
- Web-based integrated CRM / Transportation systems
- E-commerce solutions
- Dedicated customer service teams
4 - What experts do you keep on-staff?
A good 3PL knows the industry and has good connections. They will have experts on-staff experienced in areas such as: contract negotiations, freight bill administration, customer service resolution, IT support and account management.