Canadian Alliance is a leading third party logistics (3PL) and freight forwarding company based in Metro Vancouver. With years of industry experience working with companies to design unique supply chain management systems, we understand the importance of choosing an expert 3PL partner for logistics management.
After all, it’s one of the most significant decisions you’ll make in running your company as it will directly influence your customer satisfaction, ROI and overall success. We’ve listed a number of qualities to look for when choosing your own 3PL partner for all your warehousing and logistics needs.
3PL Quality 1: Scalability
One of the greatest benefits of quality 3PL warehousing is that it can free up more space for your business.
That’s why we encourage companies to do their research in finding the best 3PL partner possible. This is especially important when considering scalability – because when your warehouse reaches capacity, so does your profit.
The right 3PL partner will be an investment for the success of your company’s future. As one example, they should have an exceptional transportation management system that’s more than capable of handling additional inventory.
One reason for this is the supply and demand of products that often varies during the holiday season. For this reason alone, it’s important your 3PL partner has strong inventory control, which is imperative for warehouse management. This way they’ll be able to increase or decrease stock counts in order to meet the expectations based on your company’s shopping seasons.
When choosing your 3PL partner, ask them to break down their own scalability strategy for logistics management. This can provide a good indication of whether or not the warehouse will be able to facilitate your products with the resources required to do so.
3PL Quality 2: Technology
Today we see many logistics companies moving from paper to the Internet in order to organize their warehousing and logistics. When choosing a potential 3PL partner, your company can benefit from researching what kinds of technology these 3PL partners use for their logistics management. As an example, you may benefit from choosing a partner that uses technology that is compatible with your own. Over the years Canadian Alliance has embraced technological advances within the industry by using the latest available software to meet our customers’ needs. This includes EDI interface to customers’ systems, RF technology and bar coding along with web-based inventory transaction and levels tracking. Even if a 3PL hasn’t yet implemented the latest technologies, their openness can be an indication of a forward-thinking mindset.
“Cloud technology can enable platform solutions, which in turn makes it possible to use new business models, such as ‘virtual freight forwarding’.” Although digital solutions options are only gradually growing, choosing a 3PL that’s eager to implement the latest technology could give your business a leg up in the future.
3PL Quality 3: Efficiency
No matter where your customers are based, it often makes the most sense to ensure your 3PL partner is located in close proximity to them. In an age of Amazon Prime and fast-moving logistics management, customers expect products to arrive right away. This means that the geographical location of your 3PL can play a pivotal role in your overall cash flow, customer satisfaction and success. Talk to 3PL companies about their real-time tracking tools that can let you monitor each order from picking to packing to shipping. Even if your location isn’t ideally situated, you can have an added piece of mind.
3PL Quality 4: A Strong Relationship
Think above and beyond a potential 3PL as simply a business partner. A 3PL can play a major role in your company’s overall success, and developing a close relationship rather than a basic business partnership will help optimize your prospects. A good relationship with a 3PL can take time to build. Once you’ve built a great relationship, the 3PL will understand your business inside out, ensuring the quick turnaround times required for critical supply chain management operations benefitting both companies.
3PL Quality 4: Pricing
Chances are that pricing is one of the first variables you’ll consider when choosing a 3PL partner. It helps to do your research and speak to more than one expert in determining whether your numbers add up in order to achieve a positive ROI. One of the most important variables to consider is whether the shipping prices make sense for your ideal customer arrival times within your supply chain management logistics operations.
According to industry leader Fulfillment Companies, “Shipping charges are one of the largest fees you’ll run into – whether you do your own fulfillment in house or use a third party fulfillment house.”
However, “You could save money going through the warehouse’s account rather than your own. One reason is because warehouses get good rates from most carriers due to aggregate shipping of all their customers.”
Of course, every 3PL partner has its own shipping rates, so make sure you talk to your own accountant along with the company’s shipping expert. Even if the rate is higher than you’d like, there are sometimes other ways to lower the costs through discounts and more.
3PL Quality 5: Ability to Handle Unexpected Events
The right logistics company will be trained in working around surprises that could delay the delivery of your product. During worst-case scenarios such as Hurricane Harvey, the biggest hurricane to hit Texas in 50 years, many deliveries had to be rerouted. However, if a 3PL is skilled in working around a crisis such as this one, shipment disasters within supply chain management can be mitigated.
“if goods were scheduled to be delivered to a facility in Houston during the height of the hurricane, forward logistics would allow companies to proactively reroute the delivery to a facility unaffected by the storm, ensuring the product does not go to waste.”
Do your research, talk to experts, and make sure your newly chosen 3PL partner knows how to handle surprise situations involving warehousing and logistics such as this one.
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Whether you’re simply researching 3PLs or you’re ready to sign on with one, outsourcing to a logistics partner can help your company compete in today’s crowded marketplace. Making the decision to commit to warehousing and logistics might feel a little daunting, but by following some of the pointers listed above, you’ll be well on your way to choosing a 3PL that best benefits both your company and its future.