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Partnering with a third-party logistics (3PL) company can make fulfilling certain supply chain elements much easier and more efficient for both growing and established businesses.
The range of services that third-party logistics partners offer can save manufacturers or retailers a lot of effort, making their business more cost- and time-efficient.
But the very breadth of this range of services means that choosing a third-party logistics partner requires a bit of forethought. Here are some tips for choosing a perfect 3PL partner.
Why do you need 3PL?
As companies grow, it typically becomes harder for them to keep all of the parts of their various processes—sales, manufacturing, packaging, shipping and tracking—in-house without having to make considerable investments in staff complement, staff training, equipment and/or space. It can be difficult to find the resources to expand in that way, so relying on someone else with existing expertise is a way to relieve the pressure and keep the focus on core competencies. Larger organizations may find that they want to focus more on what they do rather than peripheral product-related services. At this point, outsourcing to a 3PL provider becomes necessary.
What type of 3PL fits your business needs?
Third-party logistics is a very broad field, encompassing transport (local and cross-border), warehousing, inventory management, customs brokerage, shipment tracking, freight audits, inventory management and in some cases even materials procurement. Individual clients may not need all of these services, and indeed many 3PL providers tend to specialize, choosing one industry to serve or one service to perfect. It follows, then, that deciding exactly what you want from your 3PL partner is the first step in choosing who to work with.
What services do they provide?
One of the best things about 3PL is its flexibility—it is possible to find a 3PL partner who does only what the client wants them to do, be that warehousing and shipping, shipping and customs brokerage, packaging, and so on. Once you have determined which services you need your 3PL partner to provide, scalability is the next question. Can their operations handle an increase in the client’s requirements, or add a service if it turns out another is needed? Finding a 3PL with a good service package is key to success.
Do they offer compatible technology, technological finesse and data transparency?
The information technology used by 3PLs is aimed at increasing the transparency of processes within the supply chain, especially inventory and the status and position of goods in transit. It might be easiest to partner with a 3PL provider that can mesh seamlessly with the client’s systems—if, that is, they fit the bill in other ways as well. The 3PL partner you choose should ideally also have an up-to-date and adaptable IT system, allowing the client to view any aspect of the supply chain process at any point.
Where are they?
A 3PL partner with a good network of partners of their own is to a degree site-independent, but depending on which services you need most, it is usually a good idea to partner with someone in your general area. That said, in situations where you as the client need cross-border transport or customs brokerage, it’s smart to select a 3PL partner with expertise in those fields, even if they are not nearby. A good 3PL partner, embedded in a strong partner network, can help clients expand their operations into new areas.
Are their fees and rates reasonable to you?
Put more bluntly, are they good value for money? As a partner, your 3PL contract should be cost-effective, and free of hidden fees. It is also best to engage with a potential partner who is transparent about costs and how they relate to deliverables. That way, you avoid potential pitfalls such as discovering that the low rates that seemed to be such a bargain were that way because the goods, vehicles or warehousing were uninsured.
Do they have a good reputation and experience?
The characteristics mentioned above are all important factors in deciding which 3PL company to partner with, but there’s another pair of attributes that can make or break the others. These are reputation and experience. An inexperienced 3PL partner who makes mistakes or who is under-resourced and cannot deliver is not going to help expand or streamline your business, while one with unhappy previous clients is best avoided. Good reputation and the ability to deliver promised services are make-or-break ingredients for success.
For queries about cross-border transport, customs brokerage, and load solutions, contact us.


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