Choosing A Third-Party Logistics Provider: How To Go About It?

Thinking of optimizing your supply chain? Well, you won’t be alone, right? Like any other competent business firm, you must be thinking of partnering a 3pl logistics company.

In the past, 3PL indicated simply warehousing and transportation services. However, the term includes other sectors now, and your company can significantly benefit by outsourcing certain responsibilities within the supply chain operations to these third parties. Given that each 3PL specializes in its own geographic and logical areas, it is important that you collaborate with the right 3pl logistics warehouse.

Things to check while you choose the right 3PL company

Firstly, finding the best company for warehouse operations might be challenging. Based on hard data, you need to proceed with your decision. Focus on these three areas at the outset:

• The current audit performance and freight accounting of the company.
• Current costs, supply chain and freight logistics, along with an approximate cost per mile and weight.
• Evaluating the present carrier relationships and extensions that can be possibly made.

Now, look into the following aspects before making your decision:

1. Track record
   While choosing a potential third party logistics company, you need to go beyond mere finances. On evaluating their track record, you can get an idea about the kind of services they are likely to deliver. Also, have a look at their area of specialization. Check whether or not they have been dealing with several clients consistently on a long-term basis. The reputation of the 3PL partner would resonate their commitment.
2. Financial stability
   No company would want their 3PL partner to falter with their infrastructure and performance. This would have a devastating impact on your company. Therefore, your partner company providing 3pl warehouse operations should be financially stable. Failure to ensure this would bring your operations to a screeching halt.
   
   
   You might reach out to their partners and inquire about their experience and financial stability. In case you find any record of payment failure or lacuna, try to avoid these companies.
3. Scalability
   This is a must-check parameter before you collaborate with a third party logistics warehouse. They should be able to scale their services as per your business requirements.
   
   
   Look out for bi-directional scalability, as it has a direct impact on the efficiency of your supply chain. In reality, every business owner strives to grow their venture. However, ups and downs are a part of your business. Depending on the fluctuations and sudden spikes in demand, they should rapidly scale the processes as needed.
4. Networks and contacts
   The more extensive network your logistics provider has, the better choice of vendors you would enjoy. One of the best perks about collaborating with one of these companies is their ability to direct you to the right vendors. You need not waste your time or resources looking for the ideal service providers. Depending on your urgency, budget and specific requirements, the 3PL company would arrange the needful for you.
5. Range of services
   After a careful assessment of your needs, look out for the range of services that potential 3PL companies offer. Make sure to collaborate with a company capable of fulfilling all your requirements.

For instance, you might need a specialized hand in dealing with procurement, shipment collection, transportation, storage or order fulfilment. Again, at times, you would need support for reverse logistics. Besides, look out for the technical support and tools they provide to their clients. In the process, you can choose the right company to partner.

With too many companies providing third party warehouse operations out in the market, choosing the right one calls for experience and diplomacy. A calculated approach from your end would assure a productive collaboration.