There is often a temptation to save costs when it comes to 3PL or Third Party Logistics. There are obvious factors that will influence your decision making like budgets and proximity to 3PL companies. But ultimately, you have to understand that the right choice for a 3PL most suited to your needs may not be the cheapest option.
When starting out looking for a good 3PL provider fit, it is a good practice to self-evaluate and see where and what you are as a business. Why does your customer base choose you over the competition? What is your strongest suit - is it your service and value or is it because you are better at dealing with large volumes at speed. Mapping out a clear picture of what your company is providing and what it lacks, will help you choose a 3PL partner that is best suited to your needs.
Your company should be able to contract a 3PL company that allows you the room to grow. A good 3PL provider will also enable you to control costs while improving customer service. So, to make it easy for you, here are a few things you should look out for in a good 3PL company and service provider:
Types of 3PL Service Providers:
- Automotive Logistics
- Distribution and Warehousing
- Intermodal Trucking and Drayage
- Trucking and Transportation
Given that you will be looking for a 3PL provider that suits your specific needs, you have to look for certain things. Some services specialize in a few areas and are smaller in size. At the same time, others are better suited to handle the entire end-to-end execution of logistics and offer seamless integration with your business. Look out for key features when considering and comparing companies:
- Shipping and Receiving
- End-to-End Service
Pricing for 3PL Services:
When dealing with 3PL companies, a crucial point of negotiating will be the way the service is priced. It is ideal to find a provider who is aware of the pricing and packaging of different services, than one that will give quotes on the fly. Having a clear picture of how things are being charged will help you plan better. Generally speaking, the following things are what 3PL providers most commonly charge for:
- Receiving Inventory
- Pick and Pack
- Key Consideration
While costs are the primary consideration that most companies focus on, there are other factors one must think of as well, to reap the benefits of a partnership with a 3PL provider. The following are some we think are essential: Scalability
You may not be a good 3PL provider’s only client. The provider needs to be able to cater to the varied needs of multiple clients without requiring much additional investment whose burden they then shift to you. An increase in business and demands will have to be accommodated by the provider as they need to scale with your growth. Broad Range of Services
As we mentioned earlier, a provider that is capable of handling and providing the multifaceted needs of your business will ensure that there is a smooth and seamless supply chain. Up-to-date Technology
The symbiotic nature of business and technology is such that it is ever-evolving. So, a good 3PL provider should be able to not only power the business with up-to-date technology but also look to upgrade and offer more advanced technological solutions. Customization
A big part of 3PL is that the provider should be able to cater to your specific needs and not the other way around. Unforeseeable changes and postponement strategies will have to be dealt with by the 3PL provider without any disruption to service. Large Network
A competent and experienced 3PL provider will help you identify the ideal distribution center locations for your current and future business needs. They need to have facilities located that are most convenient for your business and while also maintaining the ability to open new locations for future needs.
The needs and ambitions of your business determine what you look for from a 3PL company. There are several advantages of working with an excellent 3PL company - they can ensure saving of time and good cash flow, which allows your company to grow and flourish. The right 3PL partner with experience and pedigree ensures stability and growth of its facilities, systems and equipment that are necessary for optimal logistics solutions. Ultimately the benefits reaped from a good partnership will help you troubleshoot issues like warehousing, shipping and other problems that are faced by every business.