Choosing a third-party logistics company (3PL) can be confusing and time-consuming. There are many variables that make it hard to know where to begin. And if you don’t get the right partner, you could lose customers. No one wants that. Here are six different tips for choosing a 3PL beyond freight rates needs.
Experience
Evaluate your 3PLs experience. You want to be sure your company is in excellent hands. This is by working with a 3PL that has been in business for a while. There are numerous methods for determining this. There are several ways you can gauge this.
- How long has the 3PL been in business? The longer, the better.
- How many clients does it have?
Don’t just look at how many companies use your potential partner’s services. Instead, look at how many customers are satisfied with their performance. If your prospective partner has only one or two clients, it may not handle your business needs.
Reliability
Reliability is the ability of a 3PL to perform its services on time and without interruption. Reliable shipping providers have established relationships with customers. The relationships allow them to deliver products and meet deadlines with confidence.
You can count on a reliable third-party logistics (3PL) provider. They should be able to deliver your freight as per your requirements. The delivery should happen when you need it, where you need it, and when you need it. Ensure unexpected delays do not catch you off guard. Besides, be on the lookout for higher expenses due to your 3PL partner’s poor execution.
As with any partnership, trust plays a significant role. It helps determine whether your company will be satisfied with the 3PL service. If a facility manager has received complaints, he may have reservations.
Flexibility
In the world of third-party logistics, flexibility is critical. A good 3PL will be willing to adapt to your business needs. They should be able to scale up or scale down as needed. They should also be able to handle last-minute changes without issue. It’s essential that they can accommodate multiple shipments at once.
Consider how much time is wasted when a single individual handles your shipment. By outsourcing all of this work instead, you’ll free up internal resources. You can also free external capital for other purposes like marketing initiatives. —all while improving operational efficiency by eliminating overlapping responsibilities within one department.
Technology
The more technology-enabled the 3PL, the more you can automate your processes. Plus, the more you can save time and money. Technology enables you to track your freight. Besides, it helps you manage your inventory and make decisions based on data. A transportation management system is a must for any 3PL (TMS). It will enable a company to help its clients reduce costs. This can be achieved by being more efficient in its logistics operations. – especially where it concerns global trade management.
A third-party logistics company that helps businesses and organizations with logistics. So, there are many reasons why you should consider technology when choosing a 3PL. Here are a few of the reasons:
1. Faster Deliveries. 3PLs have access to different technologies that help them deliver goods faster. For example, they can use modern systems to monitor the location of shipments. This can happen in real-time. This allows them to make changes as necessary and get your product where it needs to go as quickly as possible.
2. Reduced Costs. Using technology can help reduce costs in numerous ways. This may include reduced employee turnover rates due to improved working conditions. Other ways include better training programs and reduced overhead costs. Overhead costs are a result of renting or buying less space in warehouses.
3. More Efficient Processes. Technologies such as computerized inventory systems can help 3PLs manage their inventory efficiently. So, they don’t have excess stock taking up space during slow periods of activity. This would otherwise mean higher costs associated with storage.
Carrier Base
You want to ensure that your 3PL’s carrier base is broad, with various services and access to capacity. This will allow them to serve as an extension of your supply chain team. As a result, it provides exemplary service at the right time, based on their needs. The broadness of their carrier base will help them understand your shipping needs. They can also predict capacity needs and deliver more value-added services.
You should determine if they use reputable carriers. They should possess a strong reputation in customer service. Besides, look for other vital qualities like reliability, dependability, and safety standards.
Integration
This is another factor to take into account if you are concerned about freight rates. When choosing a 3PL, integration is one of the critical factors to consider. You need to know how well they integrate with your existing technology. Many companies don’t realize just how much integration is involved in choosing a 3PL.
For example, suppose you have an ERP system like SAP or Oracle. The system may not be compatible with your 3PL’s software. In that case, you will have difficulty communicating with them. It will also not be easy to get accurate information from one system to another. This can cause severe issues for your business if you’re not careful. So, ensure the systems are correctly integrated.
Your new 3PL partner must integrate your warehouse management software and accounting systems. These two systems are at the centre of any logistics operation. Plus, they will require regular communication between them for everything to run.
Also, read: Warehouse Automation Trends 3PLs Should Be Aware Of
Conclusion
Choosing a 3PL is not always an easy task. It cannot be straightforward, especially if you are new to the industry. When selecting a third-party logistics provider, freight rates are not necessarily essential. Other factors to put into consideration include:
- The type of service you need
- The size and complexity of your business
- How much control over your supply chain management process do you want?
Make sure that you’re getting great freight rates and excellent service and communication. Although it may cost you a little extra, going with a 3PL that knows your business will help you save money. You can also save time over the long run. For more details, contact sales support.