In the not too distant past, most companies manufacturing any type of goods had their own trucks or contracted directly with a trucking company. Today, with ever-increasingly complexity of supply chains and the option to choose different providers based on price and service, the use of 3rd party logistics companies or 3PL service providers is increasingly the most common way of doing business.
The choice of the right 3rd party logistics can be instrumental for a business in managing all of the issues with the supply chain. As these providers have such a high volume of orders, they are often able to negotiate top rates with fleets, or they may also be able to provide a dedicated fleet that continues to operate and evolve with the needs of their customers.
Current and Future Requirements
Know what is needed immediately by the 3PL and where the business sees these needs changing over time. This is typically tied to the development of new markets or the increase in demand and sales.
By knowing what is needed in the future, it is possible to choose a 3rd party logistics provider that has the capacity to meet those needs. This becomes a factor as the volume of freight increases and the market expands. Smaller and startup providers may have challenges in meeting these types of expansions, which results in the need to change 3PL services in the future.
The Reputation of the Provider
Relying on the bottom line cost of a 3PL service is only part of the picture in choosing the best company. Unfortunately, low bids on supply chain and logistics support often indicate limited experience and resources, which quickly become a problem for the company in getting products in and out on time.
A better option is to choose an experienced 3PL service with a top reputation. The small difference in total cost is more than made up for reliability and professional services in all aspects of the supply chain.