5 Tips to Effectively Outsource Distribution & Third-Party Logistics Services

With the emergence of more specialized third-party logistics providers, companies looking to outsource either all or part of their logistics to a third-party should consider a variety of factors in order to identify a third-party logistics (3PL) provider that is both a strategic and tactical business partner.

1. Does the company's culture align with your business' culture?

Look for a provider who shares similar culture and core values. Does the provider lists his core values on his website? You want a provider who not only lists the values but also drive results through aligning the core values in order to develop their culture successfully.

Knowing that the provider you've selected has similar values and goals related to community consciousness, leadership, efficiency and integrity is the first step towards a successful working relationship.

2. How is the 3PL company's track record or client history?

Just like in any other professional partnership, it is important to ensure that your provider has an excellent track record-in terms of accountability, financial health, customer service, and effectiveness of third-party logistics services.

Research on all providers for testimonials and reviews and contact them to request for applicable referees. Pay close attention on whether they have the capability to provide business solutions that solve for both future and current business needs.

3. How familiar is the logistics company with your business?

Familiarity with your region of business operation is very important, especially when it comes to handling your transportation. A competent provider should be informed on what is going on at the ports, borders and on the roads. Ensure the provider you settle for has the ability to accurately forecast and risk mitigate.

4. What type of third-party logistics technology does the company use?

Having advanced technology is one thing, investing in the right personnel to operate the technology is another thing. Further, upgrading and investing in new and cutting-edge third-party logistics software is key to staying competitive.

When tracking time line, inventory and location for thousands of clients around the planet, then 24/7 tracking capabilities are a must have. Ensure the provider is properly equipped with modern technology that can forecast, organize, integrate, provide visibility, automate and adequately drive efficiency into your business' operations.

5. Is the 3PL company simply a service provider, or growth enabler for your business?

Beyond just offering a supply chain distribution warehouse and other basic solutions, a competent service provider will be ready in more than just meeting your annual budgets, KPIs and quotas. He/she will be willing in aligning all the necessary infrastructure (systems, real estate, people, etc.) to help take your business to the next level.

Such 3PL service provider will be ready to do whatever it takes in engineering better methods in order to always increase efficiency in any operation. He/she will integrate technology up and down the entire supply chain in order to streamline operations and always be prepared for any unforeseen supply chain drawback. He/she will be willing to go the extra mile in ensuring that you are served in the best way possible.

Knowing exactly what to look for in a third-party logistics provider is of great importance. Your business success relies on the reliability of any 3PL provider that you choose. Ensure you consider all the above discussed five considerations when vetting for a provider. Do not leave anything to chance. It is worth the time.