After a considerable slump during 2020, the worldwide shipping and logistics industry is back on track with a CAGR of 7.9% this year. It's a relief to know that you can once again get your goods where they need to be.
Fast and efficient deliveries are vital to ensuring customer satisfaction and can boost your brand image. Yet, these aspects depend heavily on the strength of your logistics provider.
Keep reading for tips about working with a third-party logistics provider.
Do You Need a Third-Party Logistics Provider?
A third-party shipping company, or 3PL, helps businesses move their goods without having to maintain a fleet of their own. These services involve moving cargo from point to point.
A logistics broker handles all aspects of 3PL logistics, including:
- Handling freight
- Setting up shipping and receiving
- Invoicing
- Auditing
They work with multiple shippers, supply-chain partners, and carriers. These services make it a lot easier to manage the dispatch and receiving portions of your business.
All but the smallest businesses can benefit from this.
Finding the Best 3PL Logistics Provider
Due to the depth of their services, a logistics partner can have a significant impact on your business. So, it's vital to take the time to choose one that won't let you down.
These are the things to consider:
Services that Match Your Needs
Before you start your search for the ideal logistics company, you must pinpoint your business needs. Factors to consider include:
- Packaging requirements
- Typical number of shipments per week
- Necessary supply chain services, e.g. drop-shipping
You'll lose out if you pay high rates for specialized services that you don't need. You'll experience endless frustration if you choose one that can't fill the above criteria.
That said, you must also keep the future growth of your company in mind. If you plan to make use of specialized services like LTL for frequent drop-shipping, choose a company that also offers this service.
Fortunately, most logistics providers offer scalable services priced to suit your current requirements.
Credentials
You must choose a licensed, bonded company to see to your logistical needs. These businesses require a freight broker license from the FMCSA (Federal Motor Carrier Safety Administration) to offer their services.
Logistics companies offer a diverse range of services, and the people they hire to deliver these should have relevant qualifications.
Logistics brokers require at least a Bachelor's degree in the following subjects:
- Logistics
- Supply chain management
- Business administration
Many choose to pursue Master's degrees in these or related fields to offer enhanced services to their clients.
Interviewing Potential Providers
It's important to interview a representative from the proposed logistics providers and discuss all the above aspects with them. During this interaction, you can:
- Clarify your expectations
- Discuss potential future services
- Investigate the level of support offered
- Find out more about their systems, e.g. parcel tracking
- Insurance coverage
An interview will help you uncover whether you can work together from professional and service aspects. It's also a good opportunity to find out how they respond to emergencies and answer inquiries.
Diverse Experience
Working with a third-party shipping company is an excellent way to set yourself up for success. When you work with someone you can trust, you can leave everything in their hands.
This frees you up to pursue growing your offering, your client base, and your business.
You need a 3PL who can take care of everything to do with moving your products. They should have experience working with freight forwarding, carriers, international shipping, and all other shipping modes.
Be sure to verify that the company:
- Handles LTL and FTL carriers in multiple states
- Has dealt with numerous international companies
- Has a diverse portfolio
- Provides freight bill auditing
- Has experience with moving cargo via land, air, and sea
- Offers receiving and freight hosting services
The more experience a company has, the less you have to worry about. A diverse resume and abundant experience will help you fine-tune your supply chain operations easily and effectively.
On-demand services and after-hours capabilities help you look good in front of clients and enhance your business offering considerably.
Reputation
No matter how glowing their resume is; referrals and recommendations are the best indicators of a great logistics provider.
You'll need to rely on your logistics partner to manage an important part of your business. It has the same impact as hiring a new team of employees.
So, it's imperative to make sure you know what you're getting into and follow a similar hiring process.
Ask them for references and call each one to discuss their experiences working with the 3PL.
If they won't or can't provide these recommendations, you should view this as a red flag. A willingness to share information goes hand-in-hand with honest business practices and pride in their work.
Online reviews and ratings can also provide the information you need to make up your mind about a logistics provider. These first-hand accounts can highlight their service levels, reliability, and professionalism.
Never let low prices sway your resolve to find the best logistics company available. It's always best to compare prices according to the services and guarantees offered.
Go through every document carefully to determine what they're providing, quality assurances, and your options for recourse if they fail to provide.
Late deliveries or lost shipments can have a major impact on your business's reputation and operations. So, your logistics provider must have the confidence to guarantee their services.
Moving Your Business Forward
Choosing an excellent logistics provider is an important and integral part of business success. Yet, without top-notch marketing, precise accounting, and productive employees, no business can thrive.
Our blog has all the best tips on how to grow your customer base and your business. Keep browsing!
