David L Buss, CEO of freight-forwarding giants DB Schenker USA shares his expertise on finding the right 3PL partner for your business.
A third-party logistics partner can make or break your business. The right partner can help you control costs, improve efficiency, and deliver superior customer service, so it’s important to find the ideal logistics partner that aligns with your brand and mission. Here are 10 considerations to support you with choosing the best third-party logistics partner for your business.
Do Your Research
Logistics providers are popping up all over, so it’s important to do your research to ensure you’re choosing the best partner for your business. If you’re switching from a previous provider, consider what you liked and disliked, then look for a provider that satisfies those needs. If you’re looking for a new provider, it’s important to seek out partners with the capabilities and resources you need to succeed.
Ideally, third-party logistics providers should have the capability to integrate into your current systems or the know-how to find a solution that satisfies both of your needs and goals. It’s also important to consider the provider’s financial history, industry experience, and brand stability. You may want to research the provider’s operating regions, owned vs. rented assets, and compliance history.
Don’t stop after speaking with the provider – conduct external research to gain an understanding of the company’s reputation and customer sentiment. Look for customer reviews and see how the company’s past customers feel about their experience. You can also ask the company to provide references from past customers, which shouldn’t be a problem if they’re proud of the service they provide.
Technology Solutions
Technology is the future of the logistics industry, and you want to be sure that a logistics partner has the IT infrastructure to help you succeed. It’s important that the provider owns and operates the technology needed for their services, such as fleet tracking systems, warehouse management systems, inventory analytics. You may want to seek out providers with additional technology solutions, such as theft or damage management and fleet tracking using RFID.
More and more technology is making its way into supply chain management and logistics. Companies who don’t embrace digital transformation may be left behind, so it’s vital to find a provider who shares your approach to technology.
Diverse Services
Logistics providers may have broad services or may specialise in certain services, such as industry or commodity services. The options may include transporting, shipping, sourcing, customs management, and other individual services, as well as full-service options like multi-function supply chain management. In addition, some providers may specialise in certain aspects of the supply chain, rather than end-to-end.
If you can find a provider that offers additional services, you can get a lot of value from your partnership. Some of these amenities include quality control, rush order, product kitting, reverse logistics, IT asset management, and returned material authorisation agreements. The services you want depend on your individual needs, but consider how value-added services can help your business when choosing a third-party logistics provider.
Omnichannel Experiences
The modern business world is realising the value of omnichannel retail to improve the customer experience. Third-party logistics providers should have a good understanding of omnichannel commerce and how to enhance the customer experience to ensure your business goals are met.
Search for logistics providers that have proven industry performance, in-depth understanding of your industry or business type, or repeatable business models. It may be valuable to have a provider who specialises in one aspect of the supply chain, or perhaps you need full supply chain support. Consider your options and which works best for your current and future needs.
Optimised Distribution Networks
Before you partner with a third-party logistics provider, ask about their warehousing asset ecosystem. An effective partner should have a strategic network with optimised distribution networks. Your products may need storage on domestic and international routes, and if you choose a provider who doesn’t own these warehouses, your stock may be vulnerable to theft or quality control issues.
You should also learn more about the facility sizes and capabilities, their location, and the volume the provider typically handles. For example, are the warehouses close to transit stops like airports and railways? What is the typical volume per day, week, month, or year? Is the provider equipped to handle the high volume and potential delays during busy periods or port congestion?
Customisation Options
Some industries may benefit from a partnership with customisation options. An effective provider can help you with your business processes by giving you options to optimise inventory and provide rapid service to customers.
Brand Alignment
Partnerships reflect on each other. You should find a logistics partner who shares your brand values to ensure you’re represented the way you want. Some things to consider include compliance history, financial stability, and a dedication to improving systems and processes according to the market shifts and trends.
You don’t want to search for new logistics partners all the time, so partnering with the right one from the start ensures you’ll develop a relationship you can grow into as your business scales.
Exceptional Service
Logistics providers can have a huge impact on the processes and customer service in your business. Your provider should be just as committed to your success as you are. The right logistics partner will be committed to delivering exceptional service to you and continuously improving their own systems and services.
If a new solution holds potential for better processes or systems, your logistics partner should be on board with working to find ways to improve. While not every solution is right for every business, a forward-thinking logistics partner will consider the options instead of staying stuck in the ways things have always been done.
Consider the future
When choosing a service provider it is important to consider your plans for the future. If you plan to expand your range of services, want to add new products, services or locations of sale, you need to ensure your chosen partner can support you to achieve this. During the vetting process be open with them about your strategic aims and how that could impact on the relationship with them. This should be a positive discussion as more business for you, would in turn mean more revenue for them.
Find Your 3PL Partner
Third-party logistics companies are popping up everywhere in response to the market boom, but that doesn’t mean they’re the best choice for your business. Not all logistics providers are created equal, and it’s vital to find the right partner to help your business succeed. Be sure to do your research and thoroughly vet your possible partners to find the 3PL that offers the most promise for your business, an interest in a long-term partnership, and a commitment to success in the future.
Author Bio: David L. Buss
David is CEO of DB Schenker USA, a 150 year old leading global freight forwarder and 3PL provider. David Buss is responsible for all P&L aspects in the United States, which is made up of over 7,000 employees located throughout 39 forwarding locations and 55 logistics centres.
