Someone once said, “Do not settle for less just because it is available”. This saying is just as appropriate when choosing your 3PL provider. Choosing a 3PL (third-party logistics) provider, in a way, is a leap of faith, as it might have a significant impact on your business.
It is crucial that you choose the most fitting provider with the best prices that address and handle your company’s pain points.
For the peace of mind that your logistics operations are in good hands, there are some criteria and factors you need to consider when choosing your 3PL provider. Once you start establishing a partnership with a 3PL provider, it is also vital to understand ways to maintain the relationship effectively.
How should you go about choosing your 3PL?
Figure out your own needs
Before going on and looking for a 3PL provider, it might help to ask yourself the following questions to determine if you really do need a 3PL in the first place. Some questions to ask include:
- Do you and your team have difficulties when fulfilling orders?
- Are you having trouble finding space in your warehouse for goods?
- Do you find it challenging to deliver goods to customers overseas?
- Does your team have the capability to handle orders should there be a sudden peak in order volume?
- Are you spending a lot of resources on logistics operations but still find it operating inefficiently?
If you answer yes to most of the above questions, it might be a good idea to seek out a 3PL provider. As experts in their field with an established network, they should help you handle your logistics operations smoothly.
Now that you know you are in need of a 3PL provider, it is time to move on to figuring out what types of services you and your team might need. Not every 3PL provider offers the same services, so make sure you know which services are essential to your business and choose the 3PL accordingly.
- What are your expectations for an eCommerce partner?
- What are your company’s current priorities when it comes to packaging and shipping?
- In three years’ time, will those priorities change? If they do, what changes do you anticipate?
All in all, it is crucial to understand your needs before seeking a 3PL provider.
Do your research and ask the right questions
What is the 3PL’s reputation?
You should be confident in your choice of partner, as you are choosing to trust someone outside of your organization. How do you determine whether a 3PL is capable of providing you with reliable service? The following questions might help:
- How long have they been operating in the industry?
- What results have they been able to deliver to the customers?
- Are there any customer testimonials or case studies on their website? If yes, and you want to be extra sure, you can always reach out to them for further reference.
Additionally, you can always look out for credible affiliations such as: United Kingdom Warehousing Association (UKWA), International Air Transport Association (IATA) Cargo Agent, etc.
What industry does the 3PL specialize in? Do their services fit your needs?
Most 3PL providers operate in a variety of industries with a set of different services. Make sure your 3PL has the set of key skills and abilities that can meet your immediate and long-term needs so you can keep expanding and making supply chain enhancements. Go back to the list of your requirements and determine whether your 3PL can meet them. Are they good at managing sudden order surges during the peak season? What about their custom packaging?
Ask questions and determine whether they are a good fit for your business.
Do they have omnichannel expertise?
Simply said, omnichannel fulfillment is a strategy where firms utilize a variety of sales channels to process and ship client orders, independent of the channel through which the consumer originally made the purchase.
Online shopping has been booming – consumers are shopping online now more than ever before. Hence, in order to improve customer experience, your 3PL provider needs to have omnichannel expertise. It is now more important than ever for you to have a possible partner that can manage every facet of omnichannel distribution and fulfillment, including D2C e-commerce fulfillment, subscription box fulfillment, B2B retail distribution, and everything in between.
Check their technology
A good 3PL should have the capability to meet your demands regarding the business’ demands and changes. Their technology should:
- Streamline operating ơprcesses
- Automate manual, time-consuming tasks
Do check if your 3PLs provide you with the following:
- Technology integration: can their technology connect with your online platform or software systems?
- How will they handle your data for the most advantage?
- Does their technology provide you with WMS (warehouse management system) or EDI (electronic data interchange)?
- Will their technology be able to support your business’ growth?
You and your team should be given the space and time to focus on important, value-driven business objectives and strategies, and not constantly be on edge and worry if your partner’s technology is capable or not.
Customization capabilities and scalability
Each industry may have its own set of very specific demands when it comes to logistics operations. Your 3PL partner might need to provide you with particular customizations to fit your company’s requirements. Clearly communicate your expectations to your partner and make sure they understand what is it that you are looking for.
Additionally, your chosen 3PL partner should be able to support your company’s growth – which means they have the ability to scale their services. Not only does this factor allows your business to expand into new markets, but it also is an important element in sustaining a long-term partnership.
Stability
Long-standing 3PL companies have a wealth of expertise in offering top-notch logistics and supply chain management services. A 3PL with years of expertise reacting to changes in market advances can help you remain ahead of the curve because logistics is a field that is continuously developing.
Security
Choose a 3PL provider with a good safety record. Safety records change constantly, and it is important that your 3PL provider can keep up with them in order to avoid any expensive financial penalties. Of course, they should be able to take care of and ensure the safety of your own teams’ data and resources.
Accuracy
In your search for a 3PL provider, take a look at their accuracy rate and technology. Should their accuracy rate be low, or if they are using outdated systems – which might contribute to the fact that their accuracy rate does not meet your expectations.
If the accuracy rate is low, your customers might not receive the quality of service as expected. As a result, they might be disappointed and even return the items. This will not only have a negative impact on your reputation, but it also harms your bottom line – which is profit.
Therefore, make sure your 3PL provider ensures accuracy in orders, shipments, and inventory.
Responsiveness
How does your potential 3PL partner handle the crisis? Should there be a supply chain disruption, what would they do? What are the processes for tracking a returned item?
Responsiveness is not only determined by how they respond to your requirements or urgent needs, it is also determined by how they react during times of crisis. Asking some of the aforementioned questions allows you to better understand how the 3PL company handles unpleasant situations and whether they are fit to be your 3PL partner.
Performance Tracking
Another important, but often overlooked criterion when choosing a 3PL is their ability to track their own performance. Performance tracking is one way of them assuring you that their strategy is working and that your 3PL is committed to providing you with the best service.
By monitoring the accuracy rate, costs saved, and effectiveness, you will be able to determine whether you have chosen a trustworthy 3PL provider or not.
Always looking to improve their service
Opt for 3PL providers that are open to feedback and are willing to improve their services and operations. Partnering with a 3PL provider with the commitment to provide excellent service no matter the circumstances allows you to build and uphold a strong reputation and gain a competitive edge in today’s ultra-competitive market.
Last note
Now you know how to choose the most fitting 3PL for your business. Remember, you have the power to choose the right 3PL partner. Do not settle for generic, basic services. Their service might make or break your company’s logistics reputation. Choose wisely. If you need some help with determining a good fit for your company, let SCS Solutions team help you. Contact us via our website https://www.scssolutions.io/, Linkedin, or Facebook.