How to Choose a Third-Party Logistics Provider
Third-party logistics (3PL) providers are a great resource for shippers trying to ease any potential capacity shortages, and are a great way to cover lanes that might be hard to fill otherwise. Here are six important points to bear in mind when choosing a 3PL provider to expand the reach of your shipping business.
1. If the company has been in business for just a few years, consider moving on. Until then, however, you'll still need to do your homework-- ask 3PLs for customer references and their work history. When in doubt, the Transportation Intermediaries Association (TIA) is a good resource for qualified, legitimate 3PLs.
2. 3PLs shouldn't just be a last-minute back up plan-- there's no guarantee that your 3PL will be able to move a load at the last minute. Though 3PLs can come through when you're in a pinch, it's not a set thing. Furthermore, you'll be missing out on many benefits 3PLs can offer, so give them an opportunity to see how they stack up against your other carriers on regular lanes.
3. Many 3PLs excel in certain niches, such as flatbed, LTL transportation, or cross border shipments. Learn about their strengths-- this knowledge will help you better match your transportation needs to the right provider.
4. 3PLs are solutions providers, and can operate as an outsourced traffic department. A good 3PL can manage as much or as little of the shipping process as you need.
5. When receiving quotes from trucking logistics companies, look at more than the price tag. Though 3PLs can often offer a substantial savings, consider the quality of their carriers. Don't go with any 3PL who doesn't make sure all their carriers are insurance verified, have a good safety rating, have an established business history, and authority that is in good standing.
6. Lastly, accidents happen. Some 3PLs carry insurance so if their carrier defaults on a claim, the 3PL will step in and cover the cost of the claim. However, this is not standard practice, so take care when selecting your 3PL-- a good LTL transportation company will help facilitate a claim, and can act as a liaison between you and the carrier on your behalf if something goes amiss.
When selecting a 3PL, make sure you ask the hard questions first and get all your ducks in a row. Have all your expectations set properly before you seal the deal with your LTL shipping group so that both you and your trucking logistics group are on the same page.