The Keys to Successfully Outsource your Logistics

1/12/2021
Benjamin Glouton

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It’s important to take various considerations into account when selecting a provider to outsource your logistics operations. Always consider the following aspects and quality of their services; third-party logistics providers should set proper expectations for what they provide.

Clear communication and collaboration
You should expect open and clear communication of issues, including troubleshooting any problems. This should be between your logistics flow’s all applicable aspects – your customers, carriers, business partners/shareholders, vendors, and suppliers.

Long-term solutions
Any changes proposed or made by a third-party logistics provider should be long-term and constructive, not reactionary. Also, any changes should not delay the service but improve productivity and profitability.

Shared Goals
The chosen 3PL provider should align their goals with yours. This includes the provider clearly stating the goals to all parties involved in your company’s ecosystem, allowing for smoother cooperation and clarity.

Continuous Process Improvements
Your 3PL provider should actively work with you at making improvements to operations. This can include such things as eliminating existing logistics waste. Ideally, this will strengthen your business, plus an improved return on investment in logistics outsourcing.

A Long-Lasting Relationship
3PL providers will be able to improve your services, including possibly finding ways to save you money. Strengthening and ensuring a long relationship with a 3PL provider is worth the investment. The more they learn about your business and logistics needs, it becomes easier to avoid unfamiliarity issues.

Customer Advocacy
When dealing with all logistics facets, the 3PL provider should keep all people involved on good terms with negotiating rates, customs reports, etc. All parties involved should be able to be kept happy and progressive.

Features a Logistic Provider should have:

Warehousing
They say bigger is better; when it comes to your 3PL provider’s warehousing, this could be the case. The following factors are worth considering when you’d like to outsource your logistics.

  • The warehouse’s size.
  • The number of bay doors the warehouse possesses.
  • Closeness to major points of transit – airports, railroads, seaports, major highways.
  • The warehouse space, including during busy periods – such as seasonal periods/ holidays, etc. – and future expansion purposes.
  • Complementary nature of its product mix – do they have similar busy periods (holidays, etc.), or are they alternating to yours?

Equipment
Depending on your business and items handled, you want to ensure damages are kept to a minimum, and everything is handled with care. Having the right tool for the job is essential.

  • Pallet racks
  • Conveyors
  • Flow racks
  • Scanning stations
  • Packing tables
  • Type of forklift, are they covered under a preventative maintenance program.
  • Carton sealing machines
  • Label printers
  • UPS and FedEx shipping stations, with scales
  • Specialized equipment for your product or services
  • Any other extra services: labeling, taping, bonding, assembly, etc.

Staffing
A business is only as good as the caliber of employees they employ. Your 3PL provider should be valued based on these factors.

  • Reading and writing comprehension of employees
  • Basic language skills comprehension
  • The temporary agencies, if any, used to staff employees.
  • Whether or not the workers are unionized, and if so, which union
  • The rate of turnover
  • Educational levels of the administrative staff, including management
  • Initial hiring issues for employees, including training, background checks, and probationary periods
  • Disciplinary procedures

IT Systems

  • The digital system of your 3PL provider is critical; in the digital age we all live in, they should have the capability to scan, track, and provide you with the necessary information for your use.
  • Warehouse and transportation management systems
  • Freight tracking systems
  • How data theft management is handled
  • File transfer systems
  • Document formats used
  • Order management
  • RFID or voice control technology used
  • The availability of the providers’ IT systems

Communications between all parties
Open communication is necessary as the 3PL provider will handle your logistics. These communication issues should be considered to allow for a smooth flow.

  • Who from the 3PL provider will be your main contact point, and who’ll handle conflict resolution issues?
  • How soon can you expect to hear back from the provider on various issues?
  • What are the preferred means of contact – Email, Phone, Text, and Fax?
  • What formats are used for communications documents
  • What information the 3PL provider will require from you
  • Similarly, what information the provider will give you.
  • Defining the terminology used

Qualifications and Experience
The chosen 3PL provider should be an experienced veteran; you’re allowing them to become a part of your business model. A rule of thumb is only to hire those you feel a beneficial relationship can be formed.

  • How long have they been in business?
  • Does the provider have any accreditations?
  • What are customer comments like about the 3PL provider?
  • What is the providers’ core business or commodity specialty?
  • Can the provider give any references?
  • Does the provider have any experience dealing with your type of product or customers?
  • What size company does the provider have experience working with?
  • What are the providers other companies like?

Expectations

  • Timetables for various facets of the provider’s services, including shipping orders, receiving merchandise, and information providing
  • What is their division of duties? It’s advised to review all aspects of this to ensure who is responsible for various procedures.
  • What type of contracts does the provider require?
  • Is there a safety program or a manager? How are they meeting safety and other legal requirements?

Pricing

  • What is the providers’ pricing structure like?
  • Is the invoice formatted to your requirements?
  • What are the desired payment terms?
  • Can it provide a comprehensive pricing quote for all services required?

While there are a lot of details to consider, there are also a large number of benefits to using a third-party logistics provider to handle your company’s logistics needs. Overall, using 3PL providers can make your business management a lot easier than handling logistics on your own. The growing nature of third-party logistics ensures they’ll be able to provide quality services for years to come.

If you’re ready to let AirSea solve all your logistic quandaries,  feel free to request a quote so we can get the process of finding out how we can help you started.