How to Select the Best Third-Party Logistics Provider
Making the switch to outsourced logistic services is a big step for any commercial enterprise, especially if you are used to handling these kinds of things internally. However, while enlisting the help of a third-party logistics company can be beneficial to your business, retaining the wrong 3PL provider could end up giving you a poor return on your investment. Figuring out how to select the best third-party logistics provider is often a matter of figuring out which company could help with the unique logistics challenges that your warehouse faces.
3PL Should Specialize in Warehouse Weak Points
Focusing on core competencies and using them to differentiate their services from the competition is how many successful businesses maintain their success, and a lot of 3PL companies operate exactly the same way.
Any warehouse manager looking to outsource third-party logistics is generally looking for third-party assistance with a particular problem area, so it stands to reason that they should retain a 3PL provider who specializes in that particular area. After all, hiring the 3PL company that provides the best truckload shipping services will not do a warehouse any good if they primarily need help with another area of operations. Accordingly, part of the research process prior to making a 3PL decision should involve identifying problem areas and exploring what provider could help address them with unique, creative solutions.
Look for Technological and Financial Stability
Another key factor to consider when selecting the right third-party logistics for a particular warehouse is what technological capabilities each provider could bring to the table. A good 3PL provider can help keep the wheels of a business turning, but a great 3PL provider could ensure their client is consistently up-to-date on automated tracking updates, inventory counts, productivity metrics, and more.
Additionally, it can be helpful to ensure that a 3PL company’s software solutions are compatible with those already installed in your warehouse. This can greatly reduce the risk of information and orders getting lost in translation between incompatible systems. Depending on a warehouse’s specific needs, data analytics may also be a crucial service that some 3PL companies do a better job of providing than others.
Finally and perhaps most importantly, consistency is key when it comes to third-party logistics. While a new 3PL company is not necessarily a bad one, a strong track record of financial stability puts an older 3PL company in a strong position to keep up with market trends and provide the best possible service for their clients.
Consider Customer Service and Customer Feedback
Of course, specialized services and technological superiority look great on paper, but if the company providing them does not do so with good character and great customer-facing support, the experience and final outcome may not be worth the cost. Before making a decision about which third-party logistics company to select for your warehouse, it is always worthwhile to check with other businesses that have worked with them in the past to see what they thought of the service they received. A dependable 3PL company should be able to provide customer references to support their marketing copy, and once they are retained, they should be as dedicated to the success of your business as you are.