In our last post we explained what a 3PL is, why you would choose to hire one and key factors to consider when selecting yours. Here we will discuss the eleven factors in more detail and talk about how to maintain a productive ongoing relationship with your chosen third party logistics provider.
Eleven factors to consider when selecting your best 3PL
Service: Does the 3PL provide the services required? Services vary from one 3PL to the next. The best logistics firms will offer a complete selection of services including LTL, Full Truckload, Ocean, Air, Rail and temperature-controlled, to name a few. Do they offer assistance with such things as selecting the best shipping method and carrier? Will they guide you through the shipment and paperwork preparation? You want to be sure to select a 3PL that can do everything you need or want them to do.
Experience: Does the 3PL understand or have experience with your industry shipping requirements? Select a logistics company that knows what you need and how to efficiently deliver appropriate service, and you’ll come out ahead.
Technology: Does the 3PL have the technology required to perform the tasks required? This allows for basic efficiency improvements, the ability to integrate cleanly with other solutions within your company and outside of it, security concerns, etc. It’s also a good predictor for a company’s general willingness to improve the service it provides.
Financial Fitness: Is the 3PL financially sound? You want to be sure that your 3PL isn’t going to go bankrupt or shut down shortly after starting your partnership.
Equipment: Is the 3PL equipped to handle shipments to the geographic locations where you ship? Be sure to ask this if you are looking for one supplier to meet all your logistics needs. 3PL’s don’t need to “own” the equipment – as long as they have access to the equipment you need when you need it.
Flexibility: Does the 3PL have the flexibility to respond to changes? You’ll want to select a provider that can accommodate your potential requirements as you grow and evolve.
Costs: Are the costs of the services detailed? What fuel surcharge & accessorial charges apply and were they included in the quote? How long is the pricing valid? Are there any fees not detailed in your agreement that would impact your costs?
Customization: Are they willing to customize a solution to meet your specific needs? One size does not fit all. The right 3PL provider should be willing to customize a solution to meet your individual requirements.
References: Are the customer references acceptable? Seeing what current customers have to say about your prospective 3PL is one of the easiest ways to find out how they will treat you as a customer.
Culture: Is the 3PL a good cultural fit? A 3PL is an extension of your organization. Make sure they fit with your culture for the best relationship.
Penalties: Are there any penalties for using carriers outside of your program? Or for failing to use the proper paperwork? You don’t want any unpleasant surprises!
Consider all factors (including BBB rating and any other tools at your disposal, evaluating the plusses and minuses, to make a selection and start your 3PL relationship.
Maintaining a successful relationship with your 3PL
After selecting your third party logistics provider (3PL) you’ll want to maintain a good working relationship with them. Here are a few pointers to help you do so:
Develop a Partnership – You and your logistics provider need to establish and maintain a healthy partnership. It is best for both parties to share their expectations clearly so you work effectively as partners. Doing this at the onset will help make things run smoothly from the start.
Treat them like an employee --Your 3PL functions as an extension of your company. Treating their employees like your own will lead to an effective relationship. Invest time in the relationship as you would with your own staff.
Identify and communicate goals – Work with your 3PL to set and communicate goals. Doing so at the beginning of your relationship will help assure you are on the same page and increase the odds of success.
Determine roles – Laying out clear roles and responsibilities for both your company and your 3PL will help things run smoothly from the start.
Communicate -- It is essential to the quality of your ongoing relationship that you maintain continual communication between your company and your 3PL.
In the long run, the more you invest in your relationship with your 3PL the better it will perform.
To learn more about American Group contact us at 1- 866.553.6608. We help to make Shipping.Simplified.