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What to look for when choosing a 3PL

Choosing a 3pl

What to look for when choosing a 3PL

Once you’ve made the decision to outsource your logistics functions, finding and choosing a third-party logistics provider (3PL) is the next step. First of all, what is a 3PL? A 3PL is a company that provides logistics or fulfilment services to other companies. A 3PL is responsible for looking after a portion of, if not all of your supply chain, ensuring your products complete their journey.

Selecting a 3PL can be tricky, particularly in today’s competitive economy. Whilst cost is an essential part of the selection process, there are other important considerations that need to be taken into account.

Like-Minded Business

It is important to look for similar business values and morals. Your chosen 3PL will become an extension of your business and can often be customer or client facing as a representation of your business.

Detail

Providing all of the details to your 3PL is very important. Documentation your exact requirements through a Request for Information (RFI) will allow the 3PL to accurately determine whether or not they will be able to handle your goods and importantly, accurately be able to quote.

Processes

It is important to outline a clear process from the outset. Defining expectations and working together on a clear process will reduce any potential strain on the relationship. Both your business and your 3PL need to be operating towards the same goals.

Stability

Imagine 6 months down the track, everything is going well and your company is growing, partly a result of your relationship with your 3PL. What happens if overnight your 3PL goes out of business? It is important to do your due diligence and to take the time to learn about your 3PL, their history and their future goals.

Flexibility

Can your 3PL cope with the everyday changes that may affect your business. Can they handle it if your company doubles or triples in size rapidly? Equally, will they stick around if growth is not as attractive as what was forecast?  It is important to look ahead and cover your bases.

One Stop Shop?

Does your 3PL offer freight forwarding, customs clearance or any other value added services that will benefit your business. Utilising the one 3PL for each of these services can be very beneficial as they will oversee the entire supply chain, which should result in efficient and cost effective service. 

Always be prepared to ask a lot of questions and ensure that a 3PL is the right fit for your business. This can be an invaluable step for business growth and is one worth every consideration.