Did you know that 90% of Fortune 500 companies rely on the logistics of 3PLs? It doesn’t matter whether you are a global enterprise or a smaller, local manufacturer, you need to be able to react to customer orders promptly and efficiently. Your reaction times have a direct impact on your customer retention and loyalty, which has a subsequent impact on your earnings.
Freight management is becoming more complex, and technology driven logistics have businesses of all sizes turning to a 3PL company to help them to manage efficiency and make cost savings. It’s important to have a successful relationship with a 3PL company and it comes down to choosing the right provider from the start.
Choosing the Right 3PL
You need to be able to thoroughly vet the right company to make sure that you are bringing on the right 3PL. You have to look at their operational structure and communications, the carrier relationships, their insurance coverage and financial strength, and their capabilities with technology. To be able to understand how to choose the right 3PL we’ve broken this down for you below.
If you look at the way the provider treats its customers, you’ll be able to tell the operational structure and communications. Are they working with a broad team of experts? Can they handle all of the transportation scenarios that your company is concerned with? These are important questions that you need to be able to answer, and it’s a big part of looking for the right 3PL.
When you are looking for the right 3PL, you have to evaluate the current carrier network. How do they treat the carrier base? How did they handle assessorials? To understand how easy it is to conduct business when you are looking for the right 3PL, you have to evaluate the current carrier network.
If you want to know that the 3PL of your choice is stable, you need to ensure that they have a solid and financial track record. Do they have strong profitability? Are they growing effectively? An effective 3PL company has to be financially sound. This is to ensure that carriers are paid quickly. Many 3PL is look to invest in their own business operations and solutions, and if this is the case then the 3PL company that you are looking at may be in the best financial position to take advantage of innovations.
The last thing to consider is their capabilities with technology. Your supply is going to be reliant on the advanced application of technology, and this can help your company to become much more efficient and increase your productivity levels. All of this will ensure that you can get a competitive advantage. The 3PL that you would align with has to provide a robust technology capability statement so that you can see that they are going to be the right one for you.
Your business is going to rely on a 3PL, so if you’re looking to choose the right company, you should consider the right 3PR company first. Doing your research is so important here.