If you are handling the logistics of your business in-house, you may find that a lot of your time is taken up with tasks that could be easily outsourced to a third party logistics provider (3PL). There are a great many advantages to having a 3PL take care of the warehousing and logistics aspect of your business.
Many people are surprised to learn that third party logistics are more efficient and cost-effective than running your own in-house operation. The best part is you will be able to scale and focus your efforts on other aspects of the business. This can have a huge positive impact on the future of your company.
Here are some tips that will allow you to find the best 3PL for your needs. You need to make the right choice the first time. Just remember to do your research and learn as much as you can before committing.
1. Check out what technology they’re using
There are many ways to provide a third party logistics service. The means that there is a wide variety in the level of service that you can expect from one third party logistics provider to the next. Their level of technological sophistication is a good indicator of how good they really are. By making sure that your 3PL is taking advantage of the latest advancements and innovations in logistics management, you can rest assured that you have chosen the right 3PL for your business.
If a 3PL is still using a paper-based tracking system there is a much greater chance of human error or unnecessary delays in shipping. Asking about integration with their systems and yours can open up some very exciting opportunities for optimizing the process and making sure that deliveries are made on time.
2. Growing fast? Make sure the 3PL can handle your success
You want your third party logistics company to be both flexible to adapt to your changing needs and to also be able to scale effectively. The key here is to keep the lines of communication open. If you are able to accurately forecast your growth, then keep the 3PL in the loop and they will be able to help manage to increase in demand for your product with ease.
You need the third party logistics to be flexible especially if you have peak seasons that increase the demand on your business. A good 3PL will be able to confidently handle the peaks in your annual sales.
3. Have the 3PL been in business for some time?
This is a good question to ask any company that you are going to enter into a relationship with. If they have been successfully operating for many years you can have some level of confidence that they are secure financially. As you will be relying on the third party logistics to provide your business with an essential service, you need them to not have any cash flow issues and remain in business for the long haul.
Don’t be shy about asking tough questions to establish how well the business is doing. Investigate how many clients they have and how long they have had them for. Longstanding businesses relationships with others demonstrates a healthy bottom line and also that they deliver on their promises.
4. Does the 3PL have the right people
The best systems and processes in the business will count for nothing unless there is a highly trained and experienced team able to flawlessly use them. By making sure that the 3PL that you choose has the talent to meet the needs of your business you will be able to sit back safe in the knowledge that your customers will not be let down.