Today, more and more companies are recognizing the benefits of working with a third-party logistics (3PL) partner. But if you’re choosing a 3PL to work with strictly based on their rates, you could be missing out on key competitive advantages.
Follow these tips to ensure you’re choosing a 3PL that's right for you
The process of choosing a 3PL can be lengthy, and one of the main deciding factors often comes down to how much the services will cost you. However, here are the seven things you should consider — in addition to rates — when choosing logistics solutions.
1. Consider your future needs when evaluating logistics solutions
When looking at the different services that a potential logistics provider offers, focus on scalability. Your provider should have the capabilities to fit your existing needs, with room to grow with you. Today you may only need less-than-truckload (LTL), or you may only have business in specific regions. But as your company grows, can your 3PL grow with you?
If a 3PL offers the lowest rates but they don’t offer the services you may need in the future, you could face challenges and the added cost of sourcing and onboarding an additional partner down the line. The key is to plan for the future when assessing logistics solutions.
At GlobalTranz, we offer a wide variety of services and create logistics solutions that fit the unique needs of each shipper. Though you may not need all of these today, your growth plans may require them in the future:
- Managed transportation
- Warehouse & fulfillment solutions
- Dedicated pop-up fleets
- Project logistics
- Final mile, white glove and home delivery
- Mexico cross-border
Questions to ask a potential third-party logistics partner about scale:
- What modes do you currently support?
- What regions/lanes do you service?
- Are you able to quickly scale as needed?
2. Discover how the 3PL prioritizes customer relationships and satisfaction
Your logistics provider should prioritize communication and responsiveness. For example, GlobalTranz appoints a dedicated account manager to ensure you are getting optimal customer service. An account manager is responsible for both day-to-day communication and ongoing (monthly and quarterly) business reviews. These provide a great opportunity to check in on performance, make plans to address concerns and align on goals.
In addition to your dedicated account manager, your 3PL should offer around-the-clock, year-round support. It’s an added safeguard to have designated contacts whenever you need help — whether you have a last-minute load or an emergency escalation.
Questions to ask a potential third-party logistics partner about communication and responsiveness:
- Will there be an assigned account manager for our business?
- How does your team ensure responsiveness?
- How do you track and report on performance?
- What methods do you have for ensuring customer satisfaction?
- What does your employee training program look like?
3. Prioritize technology that goes beyond table stakes
Good technology can make your life easier, but not all technology is made equal. When choosing a 3PL partner, you need to look beyond the technology that has become table stakes in the industry This includes the ability to quote, book and track loads. Your partner should offer end-to-end transportation management with visibility and reporting that will streamline your processes and save you money.
And you should ask questions not only about the technology they have today, but how they approach technology innovation. Learn about their philosophy of improving their existing systems to ensure you’ll always have a best-in-class logistics solution.
It's also important that your 3PL’s transportation management system (TMS) can integrate with your existing systems, like an enterprise resource planning (ERP) software, warehouse management system (WMS) or your own TMS. GlobalTranz prioritizes seamless integrations to give you the full picture of your supply chain, so you never miss a thing.
Questions to ask a potential third-party logistics partner about technology and innovation:
- What are the capabilities of your TMS?
- What reporting do you provide?
- What is your strategy for technology innovation?
- What integrations are available with your TMS?
- Is there a cost associated with using your TMS?
4. Look beyond the number of carriers in the 3PL’s network
When researching 3PLs, you’ll often find they advertise the size of their carrier network. But a large carrier network does little good if the carriers don’t have access to the lanes, coverage and special services that you require. And to ensure you’re getting quality service, you should ask how the 3PL sources, qualifies, manages and tracks carriers.
GlobalTranz has built a multimodal carrier network — prioritizing long-standing relationships — so we can provide shippers like you with competitive rates, quality service and creative solutions.
Questions to ask a potential third-party logistics partner about their carrier network:
- What is your process for sourcing and qualifying carriers?
- How do you track carrier performance?
- Are you able to prioritize carriers based on performance?
- Does your carrier network provide the lanes, coverage and special services we need?
5. Ensure the 3PL is credible with proven expertise
Often one of the easiest ways to assess a potential logistics provider is to hear from their existing clients. Do your research to learn what other companies are saying about them. Look for testimonials and case studies to see how they’ve performed for other shippers. Looking into financial history is also useful as it shows how they’ve performed and grown over the years.
And when in doubt, turn to industry publications and groups for guidance. There are many sources, such as Inbound Logistics, FreightWaves and Food Logistics, that do the research for you with awards recognizing the best 3PLs in the industry.
Expertise is the bedrock of GlobalTranz’s approach to helping companies just like yours. When partnering with our company, you will work with a team of professionals that has decades of industry expertise and knowledge. We leverage this experience and provide you with industry insights, technology-driven logistics, extensive carrier options and ongoing support starting on day one. Our expertise is why we are consistently recognized as a leader in our industry.
Questions to ask a potential third-party logistics partner about references:
- Can you provide testimonials or references from existing clients?
- Who are your top/largest customers?
- What was your revenue for the past three years?
- What industry awards have you received in the last year?
6. Learn how the 3PL prioritizes change management
Bringing in a new 3PL can really shake up an organization — especially without a thoughtful and robust implementation plan. When implementation isn’t done well, it can be a time-consuming process that leads to dissatisfied employees and added costs.
Your partner should be committed to helping you with change management. Implementation strategies should include plans for technology integration, employee training, data analytics and reporting, escalations, scheduled communications and ongoing business reviews.
Questions to ask a potential third-party logistics partner about change management:
- How do you help new customers manage organizational change?
- What is included in your implementation plans?
- What ongoing support do you offer to ensure a smooth transition?
7. Find a partner — not just a logistics provider
As a large shipper, you have your own unique challenges and needs. Your 3PL shouldn’t just be a service provider; they should be a partner who can create solutions designed especially for you. They should provide customized reporting and ongoing support to share insights that will help you grow. They should use their expertise to identify industry trends that will define your strategy.
Think of your partner as an extension of your team, with the logistics expertise to help you make data-driven, strategic decisions. If you’re only looking at rates, you may be missing out on a partner that can help you identify and fix inefficiencies in your current operations, ultimately helping you reduce your logistics costs.
GlobalTranz takes a consultative approach. We’ll work with you upfront to identify your challenges and build a solution around your needs. But the partnership doesn’t end there. Having a dedicated account manager ensures we are constantly evolving and improving your solutions, so they will grow and change as you do.
Questions to ask a potential third-party logistics partner about their ideal partnership:
- What is your approach to logistics management?
- How do you ensure a successful partnership?
- Are you able to customize services and reporting to fit our unique needs?
Is GlobalTranz the right 3PL for you?
We hope you will use these tips for choosing a 3PL to evaluate potential logistics partners — including GlobalTranz. Although rates are important, you should conduct additional research and ask questions when choosing the right partner. Many shippers turn to RFPs to help them narrow down their options. Check out our 10 critical components for your freight RFP checklist to further help you evaluate potential logistics solutions.
At GlobalTranz we value partnership. We are a full-service third-party logistics provider, bringing award-winning customer service, exceptional industry expertise and market-leading technology to shippers like you.