As logistics continues to grow more lucrative to the customer experience, 3PLs are playing an increasing role in the supply chain. Vetting 3PLs and transportation management services providers is a complex topic and shippers may not know where to begin. Even more complex, some 3PLs may offer different degrees of service, such as a 4PL model that blends a shipper’s existing network and fleets with a 3PL’s technology and solution, as discussed in this third-party versus fourth-party value article.
To find the right logistics transportation services partner for your unique business needs, shippers should consider these five crucial characteristics.
- Does the Transportation Management Services Provider Offer Logistics Consulting
The right service provider should prioritize value as a trusted advisor and analytics partner. That includes analysis of current operations, costs by mode, performance and benchmarking of existing partnerships. The right partner will also work with your team to implement changes based on data-driven recommendations and identify opportunities for continuous improvement.
- Focus on Carrier Procurement and Management
Since a transportation management services provider’s whole business is transportation, any selection process must also focus on what that entity does to procure and manage its carriers. The right 3PL provider partnership will be transparent about their carrier vetting and qualification process. Such organizations will also conduct regular compliance audits and help partnering shippers submit RFPs and assess responses.
That includes helping shippers manage the final mile procurement process and even offering in-house services that are available within the 3PL. The blending of both new and existing resources supports transparency and offers financial and strategic advantages to shippers and the solutions provided through the logistics transportation service.
It’s not simply figuring out what to do with transportation alone that can impact the decision to work with a full-service 3PL. As further reiterated by Global Trade Magazine, “One of the more common mistakes that occur when trying to run a warehouse (in-house as opposed to using a 3PL) is if packing and shipping procedures are not clearly understood and/or if the company has little experience in this area, generating the appropriate labeling and being able to negotiate favorable rates with carriers.”
For example, additional ways to leverage the shipment-level execution include continuously optimizing and consolidating shipments, tracking the entire shipment lifecycle, integrating systems, and logistics transportation services. By combining that with the ability of a 3PL to assist with warehouse functions, including packing and shipping, it is easier to derive more value.
- Always Turn to the Data to See Expectations for ROI and Value
Another crucial step in the selection process is letting the real-time data talk for the 3PL. Every organization will inevitably claim that its software is the best and most significant. However, those with real value and experience will let their data tell the story. 3PLs should have realistic expectations for what shippers can see in terms of ROI and value. That may further include the use of dedicated account teams, continuous industry updates to stay apprised of market volatility, and regular, quarterly business reviews that demonstrate the overall value of the partnership itself.
- Review Their Automation Capabilities and Workflows
While choosing the right provider is only part of the process, understanding and thinking about the ease of use of the software and technology integrations is also important to consider. In many cases, this refers to the intuitive workflows that exist with the TMS in operation. Even with fully managed logistics transportation services, shippers may still be interacting with the 3PL via the TMS. For example, an exception is automated and allows for seamless sharing of order data to create a turnkey solution to complete transportation management effectively.
Shippers should evaluate the automation capabilities and workflows possible within the TMS. Shippers may take this time to review a service provider's system and workflow as if they were buying it in-house. They want their service providers operating as efficiently as possible, which improves service levels and lower overhead. There will come a time when shippers may need to interact with the system and service provider to execute on specific loads or otherwise manage the inevitable exceptions. This can be accomplished through logistics transportation services.
- Customization and Compatibility With Your Existing Tech Stack
Part of the vetting process for choosing a 3PL and logistics transportation service involves the system’s compatibility with a shipper’s existing technology stack. Some TMS platforms are simply incompatible and rely on outdated technology. However, cloud-based systems can leverage APIs to provide seamless data sharing and reduce rework. API-driven platforms also allow for customization and configuration of workflows to help shippers more easily implement the system.
Choose the Right Logistics Transportation Services Provider by Partnering With GlobalTranz
The knowledge and technology capabilities that come from working with a logistics transportation services provider enable businesses to create operative and competitive advantages through their supply chain strategy. See how your team could benefit from increased efficiency and value with managed transportation services by connecting with GlobalTranz today.