6 Traits of a Reputable Third-Party Logistics Provider

by Klaus on July 19, 2018

in Articles

When an e-commerce retailer decides to outsource some or all of their supply chain tasks to a third-party logistics provider (3PL), going with the biggest name isn’t always the best route. E-commerce companies should evaluate a 3PL on more than just their services to make sure both companies are a good fit for each other. With that said, studies show only 55 percent of shippers are satisfied with their 3PL, so there’s plenty of room for improvement.

Let’s take a look at six traits of a reputable third-party logistics provider.

1. Open Communication and Collaboration

If a 3PL gets you on the phone, they can rattle off all types of services they offer and ways they can save your company large amounts of money. All of that is fine and dandy, but do they take time to hear you and listen to your company needs? Any 3PL will want to take as much off of your plate as possible because that means more money in their pockets, but a reputable 3PL will work with you to come up with the best solutions for your company whether you are a small or large account for them.

2. Always Looking to Improve Their Services

Just as online e-commerce platforms wanted to improve the merchant experience for online entrepreneurs with free e-commerce store templates, good 3PLs are always looking to improve on what they can offer. As a 3PL learns more about the client, there should be improvements such as lower costs and higher on-time performance, for example. These should be measured routinely and there should be a plan setting guidelines for continuous improvement., which can lead to more profit as well. On average, 56 percent of 3PLs cut transportation costs and 32 percent improve business processes and customer service.

3. Flexibility

When discussing supply chain solutions, make sure they tailor their services to your business instead of requiring you to change your business strategy to accommodate them. The 3PL you choose should be able to scale to your needs in both your busy and slow seasons. After all, as your e-commerce store evolves, so will your supply chain requirements.

4. Offers New Ideas

As your e-commerce store grows and processes change, a quality 3PL will offer new ideas to make your supply chain leaner and more efficient. Seventy-three percent of shippers say their 3PL provides them with new and innovative ways to improve effectiveness. An effective one will have questions and comments to improve operations and provide better service. They’re also adept at troubleshooting and coming up with creative solutions.

5. Honesty and Integrity

If your e-commerce business has never used a 3PL, it can be easy to take the information they give you at face value. However, they could take advantage of you with higher than necessary transportation and storage costs. Reputable 3PLs will not cut corners or price-gouge you when the market turns. They will adjust their pricing to the market when it goes up and down, giving your business the best possible pricing available.

6. Proactive Instead of Reactive

Each link in the supply chain — logistics especially — is an imperfect science. Sometimes production equipment breaks down, trucks get into accidents and product goes missing in a warehouse. One of the special qualities a reputable 3PL has is being proactive instead of reactive. If there are any issues in the processes that a 3PL is handling for your business, you should hear it directly from them with a plan of how to correct the issues. Some 3PLs think the path of least resistance is hiding this information from you to avoid any blowback. But keeping this information from you eventually comes back to bite your business.

There are plenty of 3PLs available for e-commerce businesses, but not all of them are able to meet your needs or your standards. Keeping these six traits of a reputable third-party logistics provider in mind will ensure your supply chain is optimized and efficient.

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