When you’re outsourcing key logistics functions to a third-party logistics provider (3PL), it’s important to have a system in place to track and measure their performance. Whether they’re managing your warehousing, transportation, or entire supply chain from end to end, your company needs a 3PL that can keep up with your supply chain demands.
Third-party logistics providers (3PLs) can cover a wide variety of core warehousing services from fulfillment, transportation, and shipping. Regardless of what you’re looking for, leveraging a 3PL’s value-added services can help ease the strain of today’s demanding, fast-paced shipping pressures.
While it’s been established how aiming to be a Shipper of Choice has its fair share of benefits, it’s quickly become a relevant topic for many in the industry again. With such tight trucking market conditions and capacity issues continuing to surface, obtaining this sought-after shipping status has reappeared as the solution to securing carrier interest.
There are many different factors that affect shipping efficiency. Whether it’s a disorganized dock design, poor carrier communication, inflexible operations, or overly complex processes, inefficiencies have a way of catching up with you. Smart shippers understand the impact any potential bottleneck in their shipping operation can have and are constantly searching for ideas that keep their freight moving without delay.
It can be challenging to find a quality truckload carrier, but having trusted partners is a pivotal part of every shipper’s logistics operation. You must choose well as their ability to get the job done directly affects your company’s service to customers and your profitability – two crucial things.
Getting your products into customer’s hands is never as easy as it seems, and the logistics department of any shipper can attest to this. The reason is there are many different components of the supply chain that need managing, such as warehousing, inventory management, and transportation. Added to that are the many industry regulations, legal requirements, and potential uses of technology to be addressed as well.
It seems when you ask 5 people to define a 3PL, you can get 5 different answers. Not only is this confusing to those of us that call ourselves a 3PL, it’s confusing to our customers as well.
When we research the various projects that we quote in our desire to grow our businesses and expand our profit margins, intense scrutiny of the Scope of Work or Statement of Work is of utmost importance.
We obviously want to know how many product turns there will be, or what the seasonality of the freight volume looks like. We do know there is a certain fudge-factor of the +/- 20% on these numbers, but they give us a ballpark idea of what the prospective piece of business looks like.
One thing we often overlook in our excitement to solve the customers' problem is their need for custom reporting. Defining your reporting requirements to your 3PL during the scope of work will allow them to accurately estimate the upfront costs and reasonable amount of time to create them. Additionally, defining reports that are Want vs. Need will save you money in IT charges for reporting that doesn't provide value to your operations.
As a procurement or logistics buyer, it can be a daunting task to look for your first or even a new 3PL partner. To get you started on the right foot, we've put together a short list of 5 Characteristics you should look for when seeking a 3PL partner.
Selecting a third party logistics provider can be a cumbersome task. Whether you're looking to outsource the logistics functions you currently handle yourself or you're hosting another bid process to replace or validate the current provider, it is a large undertaking with many variables. The market for third party logistics partners is changing rapidly with the innovations in technology both in the warehousing and transportation arena. Developing a Request For Proposal (RFP) for a 3PL partnership should not consist of the same tactics as shopping for transactional items; your 3PL selection should be strategic as it is a complex and valuable purchase that will ideally turn into a long-term professional partnership.