Choosing a 3PL Provider: How to Pick the Best Partner for Your Business

In today’s economy, businesses need to be efficient in all branches of operation. The only way to survive and gain advantage over the competition is to spend time and money to improve core competencies. Outsourcing logistics needs to a third party logistics (3PL) provider can help companies save time, streamline operations, reduce costs, increase space, and gain expertise. However, due to the amount of variables involved in choosing a 3PL, this process is full of pitfalls and it may actually hurt your company if you select the wrong partner. Here are some tips to help you choose the right 3PL.

Know What You Need

When selecting a 3PL, it is important to know what your customer’s demands are and to make sure these priorities are in sync with the same capabilities your potential partner is bringing to the table. This means you will need to have a specific understanding of why your customers buy from you. Do you have unique product or service that is in high demand? If so, you will need to maintain the quality of everything related to that product or service.

If you are selling a commodity that is not unique, you will need to provide some kind of incentive to separate your business from the rest. Choosing a vendor who is consistent and reliable can give you an advantage over your competitors.

Once you have decided what is most important to your customers, you will need to seek out which partner can best provide those services.

Check Their References

Start by exploring the company’s website and reading their mission statement.  Then, look for case studies or testimonials by satisfied customers. For example, FreightCenter reviews, testimonials, and company info can be found easily on our website.

Second, look to see if the company has won any awards.  A company that puts more emphasis on broker deals than building relationships will probably not have many awards to their credit.

Finally, look at their experience and see where they stand with partners and drivers. A company that has been in business longer will probably have more experience adapting to industry changes. You can also reach out to your professional network to see what their opinion is about the company. You’ll also want to ensure they have good relationships with their drivers which is important during the current nationwide driver shortage.

Meet with Your Potential Partners

Take the time to meet with any 3PLs you are considering. There is no replacement for talking face-to-face and learning about each other’s history, experience, strengths and weaknesses. You should take the time to understand their company culture. If you can get a good read on this, you should be able to gauge how they will respond to both your immediate and long-term needs.

Even after you have selected a partner, you should insist that senior executives from the 3PL take part in multi-departmental meetings at least once per quarter. Treating your logistics provider as a part of management, rather than a vendor will help promote interest and responsibility in achieving your goals.

Consider Value Over Price

Choosing a partner based on price alone makes sense until your customers begin leaving you because of bad service. This doesn’t mean that good service can’t be cheap, but it usually isn’t. Besides, if you are too focused on price, you are more likely to fall for the old bait and switch.

Some providers will use a low price to get you in the door, but will often hit you with hidden fees or poor service. In the end, you may find yourself willing to pay more just to avoid the extra hassle. If you make it a point to consider quality and value over price, you are more likely to avoid this issue.

You can gauge service quality by talking with sales and operations teams and visiting sites of companies like FreightCenter. Reviews left by customers can also offer a window into how a company operates and what level of satisfaction they provide. Why partner with a company that puts your customers at risk or requires constant attention? Switching partners down the road will end up costing more than selecting a high-quality provider to begin with, anyway.

Explain Your Decision

After making your decision, be sure to communicate with all your candidates why that decision was made. The winners need to know why they were selected so they can prioritize those qualities when servicing your account. The losers need to know why they were not selected so they can improve in those areas. By helping these companies stay afloat, you are creating more competition for the provider you did choose. This will motivate your new partner to stay ahead of the game and make improvements which, of course, you will benefit from. 

As trade complexities increase, companies are spending more and more time and energy into managing their supply chains. Selecting the right 3PL for your specific distribution needs will not only take some of the load off your shoulders, it will increase the efficiency of your supply chain operations.


conference by Wilson Joseph from the Noun Project
Meeting by Dan Hetteix from the Noun Project
conference by Yazmin Alanis from the Noun Project