Top 5 Tips for Finding and Selecting an Experienced 3PL
Experienced shippers from mom & pop retailer stores to Fortune 500 organizations understand the value of professional 3PL in their corner. Whether its managing freight accounting or overseeing their complete supply chain operations, a professional third-party logistics company can significantly improve your shipping, receiving, and logistics program. There are several good third-party logistics companies that can be found via Google search, but there are a few hidden tricks that leading shippers use to locate and hire the right 3PL.
Noted below are 5 easy tips for locating and hiring a 3PL that will help simplify your supply chain operations, so you can focus on driving business and growing your operation.
Tip #1 – Find them Online – but Take Time to Complete Due Diligence
Search engines have simplified the search for independent contractors, suppliers, manufactures and vendors. They are also exceptional resources for finding an experienced 3PL. When you look for a good third-party logistics company, the first thing you should do is search online for a provider who serves your specific industry. The best way to accomplish this is to Google search “3PL for (insert your industry). If you’re a retail operation, look for a 3PL that serves retailers; eCommerce business – same thing, and so on for manufacturers, distribution centers and more.
While Google is a blessing for finding exceptional service providers top results don’t equal a perfect fit. If you find a 3PL on Google or other search engines, make sure you take time to complete due diligence, by looking into their experience, history, and references.
Tip #2 – Verify Their Services
Most 3PL’s are quite diverse in their service offerings. However, some third-party logistics providers are specialists in an individual industry or supply chain function. Some of the most common service areas of a 3PL include:
- Freight bill auditing
- Transportation or Freight Management
- Contract or Public Warehousing
- Distribution Management
- Technology Solutions
- Freight Consolidation
There are some 3PL’s who are less than truckload specialists, while others are experts in air freight / overseas shipping. Regardless, the important item to remember here is to verify all of the services the 3PL offers – and make sure it fits your needs; not only today, but in the future.
Tip #3 – Check their Certifications and References
After you’ve located a good 3PL, and verified they offer the right services for you, the next step is to verify that they are licensed to provide freight broker services by the FMCSA. The organization that oversees freight logistics is the Federal Motor Carrier Safety Administration (FMCSA). It is a federal law for anyone who arranges transportation for compensation to have a federal property broker license; which is issued by FMCSA.
Among this certification, you should also verify that they maintain the correct insurance, bonding, and safety standards to complete the services you require on your behalf – and on an ethical standard. The thing to remember about a 3PL is that they will be representing your company and brand. So, make sure you find one that will ethically represent your company and has the right certifications, licenses and requirements to do so.
Tip #4 – Inquire About their Claims and Insurance Processes
As a shipper, and business owner, you understand the value of completing personal interviews – with anyone you plan to hire. A 3PL should not be different. When you’ve narrowed down your list of qualified candidates, you should ask each 3Pl about their process for protecting your assets – such as filing insurance and freight claims. Professional 3PL’s always have a robust and easy to understand program for setting up insurance for your specific type of shipping and filing damaged claims if that occurs. They should also articulate how they avoid needing to file these inconvenient claims via the carriers they utilize to move your freight.
Tip #5 – Test their Communication Standards
There are several vendors in multiple industries who are incredible about telling you what you want to hear, when you want to hear it, and in the format that makes you feel good about them. However, how they communicate with you outside of the interview process is just as critical. In fact, it’s probably more important – as it’s an indication of how they will act on your behalf once you’ve hired them. Make sure they use the latest communication platforms, such as cloud-based CRM and TMS systems, that improve customer communication for shipment planning. Make sure they customize their communication and reporting functions to your liking and verify this by asking them to show you examples of their work for like-minded clients.
There are several 3PL’s that look really appealing online, and there are some that appear really good on the surface but fall short when you dig deeper into their qualifications. The best and most qualified 3PL’s will be ethical, honest, open, and transparent. So, make sure to ask them as many questions as needed until you feel 100% confident that they will serve your company well.