10 Ways to Evaluate a 3PL Partner

Category:3PL

In today’s increasingly competitive global economy, ecommerce companies are always looking for ways to reduce costs and increase efficiency. Many companies have turned to outsourcing to a third-party logistics (3PL) provider to handle their supply chain needs. 3PLs offer a range of services such as warehousing, order fulfillment, and transportation.

While these services can be of great benefit to a company, it is important to properly evaluate any 3PL that you are considering to ensure that the benefits outweigh the costs. Here are 10 things you should do when evaluating a 3PL provider, whether you want to switch fulfillment providers, or not.

Review Service Level Agreements

The first step in evaluating a 3PL provider is to review the service level agreements (SLAs). SLAs are legally binding contracts between the 3PL and their client that outline the services that will be provided and the associated costs. By reviewing the SLAs, you can get an idea of how well the 3PL is performing and whether they are meeting the agreed-upon service levels.

Compare Costs

The next step should be comparing their costs to those of an in-house operation. This will allow you to see if the 3PL’s services are cost-effective and if they are providing value for the money. Be sure to factor in any additional costs such as setup fees, technology fees, and transportation costs.

Analyze On-Time Delivery Rates

It’s important to measure the 3PL’s on-time delivery rates. This will give you an idea of how reliable the 3PL is and if they are meeting customer expectations. On-time delivery rates are especially important for companies that operate in industries where timeliness is critical.