Successful companies often scale faster than their owners intend them to. When this occurs, it often makes sense to outsource fulfillment and logistics tasks to companies that specialize in handling them. A third-party logistics provider (3PL) helps busy business owners ship their items so they don’t have to. When choosing a 3PL to take care of your shipping and logistics, it is smart practice to get several quotes for comparison. However, it is important to realize that not all 3PL quotes are equal. Some 3PLs will include various services in their quote, while others may charge extra for them or possibly not offer them at all. And even if two 3PLs include the same services in their quote, the quality could differ significantly when it comes to the standard of service they provide. This guide will help you ensure that you are making an accurate comparison with your 3PL quotes, and can make the best-informed choice for your business.
When you interview a potential 3PL and express an interest in getting a quote, or even signing up for service, they should go out of their way to accommodate you. If they don’t, that should be a red flag and indicator of how they might treat you in the future as a paying client. Without a customer-first attitude there is a good chance that they might also treat orders, or any customization, with the same lack of concern. You should be looking for a fulfillment partner that makes your life easier, that takes the stress out of logistics. Make sure that your 3PL puts their best foot forward when you are considering their service, as that can be an indicator that is how they approach their business as a whole.
Managing fulfillment is an extremely technology driven process. As such, you will want to be able to monitor your inventory in real-time. You want to have access to tracking numbers and see where specific shipments are. Ideally, you want a great mobile app for all this as well. If a company gives you bad, overly complicated software, that can be a warning sign. Your interactions with the 3PL you choose will largely be through their software platform. If you dislike their software, you will likely come to have problems with the company as well.
To get an accurate quote for 3PL, you will need to be as specific as possible when conveying your requirements. For example, when do you want the shipment to leave/arrive, what are you shipping, where are you shipping to, the size and weight of the cargo, how you want it shipped, on what terms and how quickly. Providing detailed information about your requirements will leave no room for ambiguity when the 3PL provides a quote.
Compare Shipping Networks
A 3PL is only as good as its network of carriers, and some have bigger shipping networks than others. However, bigger isn’t always best. Make sure that you are looking at 3PLs with comparable networks in the area that applies to you. For example, if you ship perishable goods, you’ll need a 3PL who has expertise and experience in this area.
Do They Have Any Certifications?
As with any service, you will find good 3PLs, average 3PLs and bad 3PLs. However, logistics is an unregulated industry which means anyone can set up as a 3PL without qualification or experience, so you need to be especially vigilant when selecting a supplier. Accreditations, Such as ISO 9001 can be a good benchmark of quality standards, so check which, if any, each 3PL holds.
Don't Be Afraid to Ask Questions
A professional 3PL will be happy to answer any questions you might have, and how they deal with you at this early stage could be a useful indicator of the service level you should expect going forward. Ask questions that align with your business priorities. For example, what is the average turnaround time for completion of documentation, or what percentage of shipments arrive on time and in full?
Get a Cost Breakdown
As not all 3PLs include or even offer, the same services, asking for a clear breakdown of costs is the best way to compare quotes accurately. Not only will this allow you to see exactly what you get for your money, but it will also enable you to calculate the administration fee each 3PL is charging, once the various essential costs and charges have been accounted for.
Do They Meet All Your Needs?
Sometimes the best way to get to the crux of the value offered is to ask what is not included in the given quote. For example, a 3PL may offer insurance as an optional add-on, which is fine, as long as you are comparing similar services. You might prefer to shop around for certain services – in which case; the fact that they are not automatically rolled into the upfront cost will suit you better. Understanding what is and what is not included in each quote is key to determining value.
Once You Decide, Act Quickly
There are many variables in logistics that can influence the costs associated with partnering with a 3PL. The price of fuel or the exchange rate can fluctuate, or carrier charges can increase with demand. Clarify with your 3PLs how long the quote is valid for, to ensure that you are comparing quotes that will still be applicable when you want to ship.
Choosing a 3PL will require you to make a number of decisions in order to decide which one will benefit your company the most. Ultimately, you’ll be partnering with another company, so it is important to work with one that you can trust. Understanding how a 3PL can benefit your company will make choosing the right company a little easier.
If you are considering partnering with a third-party logistics provider we would love to hear from you. Send us a note to connect about how DCL Logistics can help your company. You can read DCL’s list of services to learn more, or check out the many companies we work with.