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How to Choose the Best 3PL Provider

Posted on Friday, October 16th by Pallet2ship logo

Today, the key to success in business lies in maximised efficiency and that involves investing in the improvement of core competencies. 3PL (third party logistics) providers will save you time, money and space, as well as gain you expertise. There are many variables to consider when choosing a 3PL provider to partner up with and choosing the right one is essential. So here are a few tips to help you out.

Identify your needs

First of all, you need to identify your customers' needs and make sure the 3PL provider of your choice can meet those needs. Therefore, you need to know what exactly makes your customers buy your products or services. If they are unique, you need to focus on maintaining that quality level in the future as well. Otherwise, you need to motivate your customers to buy from you rather than from your competitors. Start by choosing a reliable and consistent vendor. Once these needs have been identified, find the right 3PL provider that can cater for them.

Check the backgrounds of your 3PL candidates

You should have a look on the websites of the 3PL providers you are considering. The mission statement is always a good place to start, followed by the Testimonials section. Also, you should check for any awards they may have won over time while remembering that awarded 3PL providers usually focus on building business relationships and not on broker deals. Their experience is also very important for it reflects their ability to adapt to the industry needs. Finally, you should look into their relationships with drivers and business partners, too.

Establish meetings with your potential 3PL providers

It is a known fact that face-to-face meetings are uniquely effective when it comes to learning about the experience, background, strong points and weak points of potential business partners. The company culture should also be an indicator of their stand in relation to both your short-term needs and your long-term ones. Once you have made a choice, it is recommended that you ask your 3PL provider to participate into meetings between departments at least quarterly for it will stimulate their contribution to goal achievement.

Opt for value over price

The success of a business depends on the ability to offer customers both good prices and good quality at the same time. Some 3PL providers lure their business partners with attractive price offers, but later on charge them additional fees or offer them low quality services in exchange. You can easily determine a 3PL provider's service quality standards by visiting their website or contacting their sales and operations team. Choose to work with a 3PL provider that offer high quality services even if the costs involved are slightly higher for you will save significant amounts in the long run.

Justify your choice of a particular 3PL provider

Once you have chosen your 3PL provider, inform all the candidates of your decision and justify your choice. This way, the 3PL provider of your choice will know which qualities to exploit in their endeavour to serve the best interests of your business whereas the other candidates will know what improvements they need to make. Their improved services will build a more competitive market, thus forcing your 3PL provider to improve their own services as well.

Last but not least, you should also note the ever-increasing investments made in the management of supply chains. The choice of the right 3PL provider than can cater for your particular distribution needs is bound to lead to an improved efficiency of your operations in this area, as well as make your job easier.

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