Are you having trouble figuring how to choose a 3PL company? There are a LOT of options out there so it can be difficult to choose the best one. Plus, you don’t want to just go with a random company, these people will play a huge role in your supply chain. There are 5 steps that need to be completed when you decide to partner with a 3PL. First, you have to identify your needs. Second, research a variety of 3PL companies. Third, do some trial shipments with a couple of companies. Fourth, build your partnership. And finally, regularly reevaluate the partnership.
Let’s go through these steps in a bit more detail.
1. Identify Your Needs
First and foremost, you have to decide what it is that you want out of your shipping. This should probably start with determining what trailer type or type of service you need. Do you just need a simple dry van? If so, do you need the full trailer or LTL? Would a drop trailer work best? These are questions you should have answers to so that you can get the best fitting service.
Next, determine your key performance indicators (KPIs). These are the measurements that are most important to you and your supply chain operations. Is on-time percentage going to be the biggest thing for you? Or maybe acceptance rate is more vital to your operations. There are plenty of things to measure in your shipping so make sure you know which are most important to you.
Lastly, you want to know where you fall on the price vs quality scale. Do you need the best quality no matter the cost or do you need the cheapest option available? Your industry may play a part in this, some freight is fine as long as it actually gets from point A to B. Other freight, however, like food, needs to be shipped with a certain level of quality.
Once you have identified your shipping needs you are ready to move onto step two, researching 3PL companies.
2. Research 3PL Companies
If you are in charge of your companies supply chain chances are you are already getting calls and emails from 3PL’s so putting together a list of options should not be too difficult. However, how can you work to narrow down that list? What are some factors that will spell out success for you?
First is the 3PLs experience in your industry. This will play a huge role in the success of the 3PL company that you partner with. Ask about their past and current customers, make sure that they have done the type of shipping that you need.
You should also be asking about the technology and additional services that they have. At the very least they should be able to run in-depth reports on the services that they provide. Reports that can then be used to make improvements to your supply chain.
After you put in some time researching multiple 3PL’s it is time to try a couple out with some spot quotes.
3. Do Some Trial Shipments
It is now that you can actually see the services in action. Confirm that all the promises that they made in the research stage are true. There are, however, some additional things to look out for. One is the 3PLs level of flexibility. Make sure that they have a quick turnaround and can meet all of your requests in a timely manner. Having flexibility in shipping and transportation is huge. Eventually, something will go wrong, and having a partner that can quickly adapt makes all the difference.
Another thing to look out for while testing out 3PLs is the level of communication. It is vital that you are receiving the level of communication expected. You are entrusting your freight to this 3PL and deserve to know the status when needed.
The last thing to look out for on the trial shipment is that your general expectations are met. Look back to the needs that you identified. Did the 3PL provide everything that you were expecting? If so, it might be time to move onto step four, building a partnership.
4. Build a Partnership
It is always advised to build a partnership with your 3PLs and get to a contracted rate. Doing so allows you to plan out your supply chain more effectively. With the shipping and transportation taken care of, you can then focus on your actual business.
A great partnership will require communication from both sides. As things change for you and your business you want to make sure that you are communicating any changes to your partnered 3PL. Then to make sure that they are continuously making the needed changes you need to complete step number five, regularly reevaluate.
5. Regularly Reevaluate
Regular reevaluations are a part of any partnership. Even if you have the BEST 3PL out there, you still need to take a look at the service every once and a while. One big reason is that as your company grows, your needs will change. A 3PL that was once great 5 years ago might not work out for you anymore. This is why scalability and flexibility are so important in the 3PL world. This partner is playing a large role in your supply chain, so make sure that they can grow with you.
The best way to confirm that everything is going okay is to hold regular meetings, quarterly at the least. Just go over the service since the last meeting, find areas of improvement, and communicate any changes on your end. Doing this will allow your partnership to go on for years.
So, how do you choose a 3PL company that’ll work best for you? Identify your needs, do your research, do some trial runs, build a partnership, and regularly reevaluate. Following these steps will allow you to find the best match for you. The most important thing you can provide is open communication. Communicate your needs and expectations and you will be able to find a company that will match these needs.
At HTL Freight we listen and fulfill all of our partner’s needs. We do this by operating on a base of responsibility, reliability, and responsiveness. We have been in the industry for nearly 40 years. In that time we have worked across all industries and provided all sorts of solutions. To see if we are a match for you and your supply chain reach out and contact us. Or you can request a quote and get started today.