If you are wondering what a 3PL partner is, let’s break it down for you. 3PL partner refers to a third-party logistics partner. Third-party logistics partners or providers are companies to whom you can outsource your logistics operations such as warehousing, shipping, and other operational tasks.
Maintaining logistics operations all by themselves may not be easy for some businesses. Under such circumstances, these 3PL partners can be a big relief. They usually take care of all your logistics operations, starting from hiring warehouse workers, maintenance of equipment, keeping track of inventory and other things. And being experts in this field, the 3PLs can complete these tasks much faster and much more efficiently.
3PL partners can bring down your logistics and inventory costs by a huge margin, if chosen wisely. These third-party logistics providers work with sophisticated software to manage the storage, transport, and handling operations. With the help of 3PL software, they can easily develop a warehousing management and distribution plan to best suit the needs of their client companies.
Choosing the right 3PL partner for your business is not a cakewalk, though. If you end up choosing a partner that does not fit well with your business, it may be a disastrous experience for your business. You will end up losing time, money, and most importantly, your customers’ goodwill. Also, these are usually long-term contracts, and some scrutiny is necessary for such dealing.
Here are five ways to tell you how to choose the best 3PL partner for your business:
Identify their strengths and capabilities
Not all 3PL companies can handle all kinds of businesses. Like any other profession, logistics also requires specialized skills and knowledge. That is why it is important to find out whether the 3PL provider of your choice will be able to competently handle the specific areas that business deals in. Their capabilities must match with your needs. Just because they are excellent in one area, doesn’t necessarily mean they would be experts in your area of operations too.
Take your time and find a partner that will be able to give your business the right kind of logistics support it needs.
Understand their level of technological sophistication
The best part about hiring a 3PL partner is that you do not have to worry about the technology involved in logistics operations. But for that, you must ensure that your 3PL provider is keeping pace with the technological advancements in the logistics industry. Handling logistics operations with the help of latest 3PL software and automation technology will make the processes much faster and streamlined.
Make sure that your 3PL partner’s systems can integrate with your automation requirements for order routing and inventory management. You should not have to worry about these aspects of your business after hiring a 3PL partner.
Conduct an on-site visit
Not everything can be learned from a company’s documented data or client feedback. The real scenario will only be clear to you once you have inspected things physically. So, as far as possible, try and arrange for an on-site visit to any of your 3PL partner’s warehouses to see how well they manage their operations. Even if you have already hired a third-party partner to handle your logistics, visit the site to ensure that things are going as you hoped for.
This also gives you an opportunity to discuss and propose any changes that you might want in the processes, such as packaging or shipping of a new range of products. On-site visits help you understand the processes better and determine if the contract with your 3PL partner is helping your business.
Get to know their customer service
Customer service should be of foremost importance to any business. Find out what amount of priority your logistics provider gives to customer service. Good communication, responsiveness, and problem-solving are important aspects of good customer service. You will need your 3PL partners to be good at these once you start dealing with them.
This cannot be judged from their own claims, though. Get in touch with other businesses availing their services instead. Get feedback from their existing customers. This is your best source of getting information on the type of customer service the 3PL company offers.
Safety and claims handling
In an industry like logistics, accidents and losses are bound to happen occasionally. This cannot be an excuse for unsafe operations, though. Find out how much importance is given to safety by your prospective 3PL partner. Also, ensure that they follow all safety regulations so that they don’t land you in trouble at some point.
In case an accident does happen, and you incur losses, will your 3PL provider facilitate a claim? For the interest of your business, it is indeed essential to know. A good 3PL provider that is good with claims handling will agree to act as a liaison between you and the carrier and will try to facilitate a claim in case of losses or damage inflicted by the carrier. Some 3PLs already carry insurance so that they can cover for any losses caused by them or the carriers. So, get things sorted before you settle for a long-term 3PL partner.