Almost every business touches upon an outsourced logistics company in some way. Either they use a 3PL themselves, or their customers or suppliers do. From single-package delivery to truckload carriage to warehousing services, few businesses these days can handle everything in-house. Many have outsourced their entire logistics function, either to a single 3PL or to several unrelated organisations. As these relationships become more common, making the most of them becomes more important to efficient business, and the ability to ride out fits and starts in one’s supply chain.
Once such a relationship is in place, a spirit of true collaboration becomes desirable almost instantly. Every company you deal with is a business partner, and you can generally profit more by working with them than by trying to ‘win’ against them. We must all be open to new strategies and ways of doing business to thrive in these competitive times.
How to choose the right 3PL for your business
Choosing the right 3PL is a major point of strategy, and can make or break an endeavour. Outsourcing a core function like logistics is hugely important, and the way it is approached will have impact for years to come. The 3PL should be a major part of setting strategy and goals. They should be included, or at least consulted, on any major decision even if only so they can provide you with the best possible service. Better still if their expertise can be relied upon to set up more efficient and rewarding processes, both on their end and on yours. Any 3PL with which you do a great deal of business should be open to increased collaboration and the added efficiency and reliability it brings, even if it isn’t technically your organisation they ‘work for’.
Traps and dangers
While those are the obvious goals, there are quite a few pitfalls that must be avoided before you can hope to achieve them. For example, failing to give a 3PL full and accurate information at the beginning of an arrangement can lead them to under- (or over-)price their initial proposal, and the deal could fail. Customers can take it for granted that certain logistics functions are included as ‘a part of’ others, leaving no one with direct responsibility for key processes. Standards, deliverables and measurements may be poorly defined, leading to a false belief that the other party will be satisfied with results. More common than the rest, customers (and some 3PLs) can focus too much on cost-reduction as the sole metric for success. In reality this is devilishly hard to measure or confirm, making otherwise good business relationships ‘seem’ bad.
Collaboration and inclusive planning is the best place to start. If you can really work together with 3PLs, you will each profit more by your association. Isn’t that the real goal, anyway?