3 Tips for Hiring the Best Third Party Shipping Companies
Navigating the complex supply chain is a difficult task – even for experienced operators. The changes in shipping regulations, increasing costs, and complexity of international logistics procedures often inspire shippers to search for the best third party shipping companies to help them with their logistics programs. There are several good 3PL’s out there – but what qualities do the best third-party logistics providers have?
If you’re looking for a 3PL to help you with certain aspects of your supply chain functions or manage the complete process, here are 3 tips to consider.
What is a Third Party Shipping Company?
A third-party shipping company is also referred to as a 3PL. They help shippers handle some or all aspects of their shipping needs including handling the point-to-point movement of cargo on behalf of the clients they serve. Quite often, the 3PL is confused with a shipping broker. The main difference is that a broker sets up the shipping needs, while the 3PL handles freight, sets up shipping and receiving, and all areas of logistics such as invoicing, auditing, and more.
A professional 3PL works with multiple shippers, carriers, and other supply chain partners. This gives them the experience in multiple freight handling industries, which benefits the shipper in multiple ways. However, there are 3 steps that any shipper should complete to ensure they choose the right 3PL.
First – Diverse Experience is Critical
While a third party shipping company is responsible for acting on your behalf as a shipper, working with an experienced 3PL who has a diverse resume sets you up for overall logistics success. A 3PL who has worked with carriers, international shipping, freight forwarding, and all shipping modes will have the diverse experience you need to operate a lean and mean supply chain. Specifically, when you reach out to any potential third-party logistics provider, make sure you verify they have experience with the following:
• Worked with LTL & FTL Carriers in multiple US States & International Companies
• Have experience with air and sea shipping procedures
• Offer freight bill auditing services
• Have a diverse international shipping portfolio
• Offer freight hosting, light-manufacturing, and receiving services
An experienced company with a diverse resume and experience gives you a head start on entering or fine-tuning your current supply chain operations.
Second – Verify they Offer the Correct Services for your Industry
The best thing about working with a 3PL is that their services are typically scalable based on your needs. However, there are some third-party shipping companies that are not best suited for you because they don’t specialize in the supply chain services you need. For example, if you’re an eCommerce-heavy business that specializes in drop-shipping, a 3PL that doesn’t offer eCommerce drop-shipping solutions will not be of much benefit.
A good 3PL is the one that is bests suited for your individual needs – not always the one that offers a complete suite of services. There are times when your company will need to utilize logistics services that are not common – such as LTL for a drop-ship heavy eCommerce company, so it’s also critical to be forward thinking about the potential services you might need as well. A great opportunity to verify this data is to set up an actual interview with any potential 3PL. This ensures you and they are clear about your business and the support services you require. By taking the time to meet with them, you’ll also get to know them to ensure their operation and business standards are on par with yours.
Third – Ask for References
If you’re going to hire someone to manage your shipping and receiving department inside your business and provide them with keys to your facility, you’ll check their references – right? Hiring a third-party logistics company should have the same hiring methodology. While they are outsourced agents, checking their references will provide you with verification of a few important items.
• It shows they want to earn your trust: If you ask a 3PL for references and they open up the books for you to review, that proves they are proud of the previous work they’ve completed with like-minded clients. If they are skirting around giving you references – that should raise a red flag.
• Gives you peace of mind: As a shipper, your customers depend on the efficient and on-time delivery of the products they have purchased. By asking the 3PL about their shipping records, which carriers they prefer to use (and why), and other shipping related questions, you’ll protect your business best resource – repeat business from happy customers.
When you break it down simply, the best third-party shipping companies are diverse in their experience, offer the services you need today – and tomorrow, and are proud to provide you with practical references. By following these three tips above, you’ll be certain to find a 3PL that will help accelerate your logistics program to levels you expect.