6 strategies for selecting a global 3PL
It can be daunting to search for a reliable third-party logistics (3PL company), especially for companies that do business internationally.
Supply chain management is no small feat, as it ensures that your entire work process is going along smoothly. As such, if your firm is looking to begin a search process for a reliable 3PL, then they must get find out everything they can about the company. This article will cover how you and your firm could identify reliable and reputable 3PL services and the five basic strategies to looking for a 3PL.
What are 3PLs?
For the uninitiated, 3PLs specialize in shipping freight between customers, buyers, and sellers. This includes transportation services, warehousing, product consolidation, clearing customs and freight delivery.
3PLs also offer you the chance to improve and manage your transit times. If the duration taken by the carrier to actually deliver the goods to your customers or the time taken to bring raw materials to the manufacturing unit is reduced, you will reap huge benefits in the form of better productivity, better turnaround times and better service to customers. These 3PL activities are all managed by 3PL software and, as such, naturally become part of any quality search undertaking.
Five strategies to hiring a good 3PL service provider
- Identify the entry level of service your company needs while also determining expansion levels if growth is likely. Since 3PL companies offer a wide range of services from elementary to complex, clearly define each service level for transportation, customs clearance, warehousing, delivery, and technology, including third-party logistics software that is scalable for your projected growth. More often than not, the larger the company, the greater number of services that are outsourced and are likely cost-savers.
- Generate a list of all 3PL companies of possible logistics providers that are likely to fit your criteria. Then, begin researching each 3PL background. Include things like specializations, geographic locations (include both national and international), and any former projects they may have undertaken.
- After basic investigations, begin winnowing your list, reducing it to three or four that have the greatest potential of meeting your company's requirements. Make initial contact with each of them and obtain average rate quotes for common shipment destinations your business makes.
- Create a questionnaire that you will send to each 3PL from which you initially requested phone quotes. Ideally, you will want to design the questionnaire with open-ended questions that require descriptions and explanations.
- Contact your top two 3PL selections and ask for on-site interviews and tours. Once onsite, ask each of them to walk you through a typical freight forwarding process, review equipment, and organization of the warehouse. Additionally, inquire about their third party logistics software and have them show you some basic inventory management functions in their system.
Good examples of questions to ask 3PLs:
- What kind of third party logistics software does your 3PL use?
- Is it web-based and accessible from any computer?
- What is your global capacity?
- How do you track shipments?
- Do you use mobile scanners or RF devices in your warehouse?While you are waiting for your questionnaires to come back, try to get some additional background information on each of the three or four 3PL's. Determine who else uses them and contact others for their satisfaction level and overall performance by the 3PL you are discussing. Once the questionnaires come back, evaluate the best answers that will fulfill your company's outsourcing objectives, along with the rate quotes you have already compiled. Then, narrow your selections to a couple providers.
Finally, you'll make the best decision on which 3PL is right for your company based on a well-researched and in-person process.