3PL Logistics : 5 Major Things to Keep in Mind While Looking Out for a 3PL Partner
3PL Logistics providers have noticed tremendous growth in the past few years as the shopping behavior of consumers continues to change and grow.
Temando researched in the year 2016, which showed that customers expect more than you think. In 2016, most of the retailers were concerned about meeting the client’s expectations and their inefficient supply chain. This mirrors the reality that consumer relationships are much more than the product. They not only expect on-time delivery but also good and affordable packaging.
But if your 3PL logistics company plays an important role in making your eCommerce business successful then you can’t take a chance on choosing the right partner.
What is 3PL?
3PL refers to the outsourcing of logistics processes, including warehousing, fulfillment, and inventory management. 3PL logistics companies assist e-Commerce merchants to achieve more, with the help of tools & infrastructure to activate retail order fulfillment automation.
How to Choose a 3PL Logistics Partner?
When it comes to choosing a 3PL logistics company then you should act wise and smart. You need to check all the boxes on the list to make sure you have partnered with the right company otherwise you will not just lose your money but also the trust of your customers.
We, at SAR 3PL Logistics Company in India, have come up with the list of all the important factors to consider while hiring a 3PL logistics partner.
So, let’s get started with the checklist.
1. Must Define your Precise & Measurable KPIs
It’s hard to analyze something if you don’t have anything for comparison. So when hiring a 3PL logistics partner, ensure you have a set of defined and measurable KPIs. These KPIs will guide your 3PL in the right manner and also help you to track the efficiency of the third-party logistics company.
How will you set up KPIs? This is a simple task to do; time stamps, logs, and barcode scanning can be used for this.
Apart from having KPIs in place, you should be able to track timely delivery independently. Don’t just depend on the 3PL logistics company’s reports rather ask for access to the delivery information for efficient tracking of their performance.
2. Scalability Matters
You need to keep in mind the present as well as a future scenarios when selecting a 3PL logistics company. It’s important to understand whether your 3PL partner can effectively and efficiently improve their operations to meet the growing requirements of your business.
To make you understand in simple words- if you have got a sudden hike in the order volume, does your third-part logistics company have enough manpower and resources to manage it- if yes, then you’re good to go with it, and if not then it’s clear that you should turn your head to other 3PL logistics companies.
3. No Long-term Contracts
You should be aware that your 3PL company has an influence over the customer experience. So, you should have the freedom and flexibility to walk away when the quality of their service takes a downshift. What if your company grows or faces unpredictable events and your 3PL partner can’t manage the requirements.
This is why we suggest you go for monthly contracts with your 3PL logistics companies.
4. Focus on the Quality of Services than their Price
This is a fact that premium quality services don’t come at the cheap rates, but it is rarely the case. One thing you need to do is appropriately compare the price of 3PL logistics services with your business aspects that have a direct impact i.e. customer service & accuracy.
You must consider strategic purchasing scenarios when fast order processing is necessary for selling a product. Additionally, focus on the impact on customer service inquiries if all your products are shipped accurately and timely. You need to have that kind of system in place to reduce customer complaints about late or undelivered orders.
5. Screen at least three 3PL logistics Companies
You should not be afraid to consult a few 3PL companies to see which one gives the best performance. This is the smartest action you can take to make the right choice for a 3PL logistics partner. We suggest you try out at least three third-party logistics providers as evaluating more than 3 companies will become a demanding task indeed.
Do follow these tips when choosing a 3PL company for your supply chain. Also, do let us know if you have anything to add to this list.