5 Tips on Choosing a 3rd Party Logistics Provider

Monday, March 17th, 2014 | Posted by admin

Choosing a 3rd party logistics provider is a great way to get a foot up on the competition. When you invest in a company to take care of the delivery of your goods, you can truly focus on merchandising and sales. Overall, your company benefits by being able to offer the best in quality and customer service. There are many different logistics providers and all handle billing and services differently. Here we’ve outlined some basic tips on how to choose what 3rd party logistic provider is best for you. Don’t hold back when researching and be prepared with these suggestions.

1. Look At The Partnership As Long Term

All logistics providers will agree that it’s vital to think long term when looking for a company to work with. According to LeanCor, a “relationship with a third party logistics provider needs to move from transactional to one of a long term partnership and commitment.” There isn’t a lot of room for hiring a provider for a short timeframe. Getting to know one another and the services offered takes time. Simply setting up communication can take time too. The longer you stay with a logistics company, the better the results. As your company grows, the provider will grow with you and will meet you at all different levels of maturity. PGL.com makes the point that if you need major capital investments on behalf of your third party provider, you’ll need more time for them to see a return on their investments. This all being said, keep in mind that a partnership of this sort isn’t a quick fix or an in-and-out project. Working alongside a logistics provider enables your company to do more and helps you along the entire process, just not parts of it.

2. Educate Yourself On the Process

You can’t choose a great 3rd party logistics provider if you don’t know what one is. Simple things such as knowing the basic five main metrics of a provider can aid you in your decision. The Business Journal points out that each provider is measured by experience, technology, transportation modes, safety, and partnerships. If you find yourself confused about the process, educate yourself through reading. It’s also a good idea to take a class at a local college or find a mentor in a similar business field. If you know the main functions of a third party logistics provider and what it will offer your company, you’re more likely to make wiser decisions.

3. Ask About Their Partnerships (Current and Future)

The partnerships your 3rd party logistics provider has is a huge asset or disadvantage to your partnership with them. A logistics provider should have many options to offer and lots of different companies they work with to suit your different transportation needs. If they have built good rapport within the transportation business, they will be able to get you insider pricing and work out better deals. This is also vital if your company plans on expanding or if you are anticipating using other ways of transportation than you have currently. The more partnerships a logistics company has, the more options you have as someone using their services. Within this business, it’s all about who you know and your reputation. A company that has been in the logistics arena for awhile may charge more but will have the ability to introduce you to others who can help in the long run to eliminate unnecessary costs. It’s also a good idea to ask about future partnerships the third party logistics provider is considering. If you have an idea of their expansions, you can better choose a company that aligns with your specific needs.

4. Interview Current Companies Utilizing Their Services

A little detective work is the answer to finding out which provider will take your company further. Don’t hesitate to contact other businesses using their services. The Business Journals suggests calling around and asking what the companies think of the logistic provider. Are they performing as promised? Do they have good communication? Are they responsible? This may also be a great time to check up on their safety record. Usually there isn’t any benefit for another company to lie about their opinions of a provider. You can call numerous places and determine the companies’ performance and feel from them.

5. Make Sure You’re On The Same Page

Last but not least, you’re going to want make sure you’re on the same page with a potential third party logistics provider. It’s important that the company you work with has performance standards and goals similar to your own. Logistics Diakon suggests asking questions about accountability and what they will look like between the two of you. You can expect a great company to embrace customer care like you but it’s a good idea to ask what their customer care looks like on a day to day basis.

Contact Edler Warehousing LLC today to request a free quote.