Top 7 Things to Consider for Selecting a Third-Party Logistics (3PL) Provider

Top 7 Things to Consider for Selecting a Third-Party Logistics (3PL) Provider

September 19th 2019

“Nowadays, contracting out your Logistics needs to Third-Party Logistics (3PL) Provider is becoming beneficial. A top 3PL provider is a well-informed source of industry best practices and latest advancements, but what are the Top 7 Things to Consider in selecting one suitable for your business?”

Whenever it is time to outsource your logistics needs, you are possibly wondering how to begin tackling this hard decision. The delivery of Professional 3PL services by 3PL providers are very beneficial to business who seek to lessen time wastage, maximize profits, and boost customer satisfaction. With several 3PL providers to select from, picking the right 3PL suitable for your business model becomes crucial.

Several 3PL providers offer numerous flexible benefits that include offers like a one-stop-shop for distribution, transportation, and warehousing.  One thing remains essential, and that is seeking out offers that encompass key elements or total solution that covers customs brokerage, distribution, implementation process, transportation, and storage models suitable to your business needs. To assist your decision-making process and evaluation for selecting a 3PL provider, below are the Top 7 Things to Consider:

Business Culture and Value Suitability

Coverage of Strategic Locations

Custom-made Solution

Effective Communication

Experience and Established Track Record

Innovative Policies

Scalability Level

Business Culture and Value Suitability

The culture and value of every 3PL provider can make available an exceptional insight into what business type they prefer dealing with the business. With a little more consideration to the 3PL provider experience, knowledge, ownership, and structure, you can gain meaningful insight into their approach, people, social responsibility, and level of engagement to others.

The Business Culture and Value Suitability amongst two businesses can be the difference between a fruitful or failed partnership. A 3PL provider with limited scope and preference may not be something you want to consider, especially if you plan to use their services for an extended period.

If you consider the need for Business Culture and Value Suitability, it is essential to consider the following:

Company Structure and Key Employees of the 3PL provider.

Previous customer base can serve as a good indicator of their plans.

The Business Culture and Value Suitability of the shortlisted 3PL providers.

Coverage of Strategic Locations

The best 3PL providers make use of an extensive and well-established supply chain network to deliver excellence to its client base. Also, their relationships with sub-partners, guarantees all its clients get smooth logistics globally.

For instance, if you require a distribution network to specific areas and regions that might be too far for your current capabilities, it would only make sense to pick 3PL with facilities in such areas. Nevertheless, if your distribution requires the use of port services, a 3PL provider who offers port-centric logistics services may offer a better prospect.

With networks across countries, to select a prime 3PL provider with excellent global reach and Coverage of Strategic Locations, you should consider the following:

Consider future expansion plans and if 3PL providers intend to cover such areas.

Enquire about shortlisted 3PL provider’s network areas your business model has a particular interest in dealing.

The locations your business wish to move the goods to or from.

Custom-made Solution

Respectable 3PL providers do not deliver general solutions as services to clients. Most 3PLs start with consultations with prospective clients to understand their business model. After that, they make available, tailored solutions that are flexible enough to cover your specific business needs.

It is always a rare occasion to see clients with similar logistics request. So, instead of only acting as a supplier, top 3PL providers understand your logistics needs will become an extension of your business that requires support in growing your long-term strategies.

For better Custom-made Solution, it is essential to consider the following:

The offer of a standard “one size fits all” package is not a right approach.

Seek Insightful Case studies on determining how well to table your 3PL request concerning ultimate customer satisfaction.

Good 3PL providers are always happy about sharing and speaking with successful clients, leverage on that, and learn about their experience.

Effective Communication

Creating Effective Communication is vital to building an exceptional working relationship. Most top 3PL providers are keen about establishing suitable communication process with clients. Also, the world of logistics naturally faces circumstances beyond the control of 3PLs. Such inevitable events happen occasionally, and with things not going as planned, effective and prompt communication process becomes vital to the process.

For some, the ability to track shipments online may be considered a priority. Others may find the provision of Warehouse Management Systems that deliver total inventory control as essential. Well, most 3PLs offer a variety of systems suitable for their level of operations.

Placing considerations on the tools available will aid your communication process and provide data for analyzing performance. If you consider the need for Effective Communication for every delivery, it is crucial to consider the following:

Are the available interface systems provided in line with your logistics demands?

Are data sharing and real-time information available on products between distributors, manufacturers, and retailers?

Experience and Established Track Record

If your service delivery process involves trust, your logistics needs are better in the hands of a 3PL provider who share Experience and Established Track Record. Their approach and confidence in meeting your logistics demands can always get trust as professionally reliable. Indeed, the are some key indicators to help you gauge whether the experience shown is in line with your business needs. The following questions can provide a good starting point o test the credibility of 3PL providers:

How many years in operation does the 3PL provider have?

Is their enough experience in locations for your business markets?

Can you find relevant customer case studies or customer reviews?

Are the delivery results left by clients positive?

This data is key to understanding a 3PL provider capabilities to handling your business logistics. If your business model intends to perform international logistics, you must select a 3PL provider registered with top international bodies. It is a recognition that assures you of quality and standard approach to delivering better customer and logistics services.

Additionally, holding accreditations or memberships to top industry regulatory bodies shows a good sign in the standardization process. Some principal affiliate body to look out for includes:

British International Freight Association (BIFA)

IATA Dangerous Goods regulated agent

International Air Transport Association (IATA) Cargo Agent

The Institute of Chartered Shipbrokers

The Road Haulage Association (RHA)

United Kingdom Warehousing Association (UKWA)

Innovative Policies

To work with 3PL providers implies the demand for an effective and efficient drive towards business growth. A business in need of 3PL services requires a 3PL provider that identifies with the importance of technological and innovative policies. The growth of technological innovations across the business world is driving new and efficient transformations all the time.

Once you identify the need for 3PL services for your business, then the need for a 3PL provider who readily adopts innovative policies and technologies to help make cost-effective and efficient operations becomes essential. In addition to daily communication between both parties, you need to understand the benefits that accompany every innovative policy.

These considerations below can help your decisions in understanding their approach for continual improvement and how adaptable these processes are to your business models:

Can your business model accommodate new technological and Innovative Policies?

Do you get access to analytics and data about your business operations?

How can the systems provided by the 3PL provider communicate, integrate, and innovate your business process?

Will the processes be accessible online and in real-time?

Scalability Level

Most businesses prefer to work with 3PL providers in expanding operations or becoming a more efficient model. With these expectations, your logistics demands would enable your business growth and development. So, it is essential to select a 3PL provider that is agile and offers full flexibility that supports your business Scalability Level when demand increases.

To ascertain the Scalability Level offered, asking shortlist 3PL providers the following questions can provide a good starting point:

Are they willing to discuss future expansion and needs?

Is there precious record showing their capability and support towards the client’s growth?

Are there some credible customer examples to demonstrate how they plan to tackle similar growth and customer’s needs?

CONCLUSION

The use of Third-Party Logistics services is becoming a valuable service to consider for effective logistics solutions. But finding the right 3PL provider is essential as well. By following our Top 7 Things to Consider for Selecting a Third-Party Logistics provider, we are confident you would discover a dependable 3PL partner whose streamline process is beneficial to your business and logistics process. The benefits of using a right and recognized Third-Party Logistics provider with proper license and global certifications are essential to helping you solve outsourcing your logistics needs.

If you have further inquiries or seek the help of local specialists with outreach all over the UK, you can contact us today. We are more than happy to help and advise you on the best approach for your business to take in considering third-party logistics options.