When It Is Time to Hire a 3PL?
While it doesn’t happen for every company, with a bit of hard work and a dash of luck, your business is capable of getting to the point where serious consideration needs to be given to expanding your operations. When this happens, things can get complicated very quickly from a logistics perspective. It is at this point it may be time to hire a 3PL.
A 3PL is equipped to help you handle a large portion of the logistical hurdles that come with company growth. However, as with most things, it’s a bit more nuanced than that.
In this article, we will outline the reasons why you may want to start seriously considering hiring a 3PL and what qualities you should look for in your search.
Here are 3 Signs that It’s Time to Hire a 3PL
Sometimes it’s just a matter of “when you know, you know.” There’s not always an obvious sign to point to that can tell you whether it’s time to hire a 3PL. However, the following list can provide some general ideas of what signs you’ll want to look for along the way that may indicate it would be a good time to consider outsourcing some areas of your operation.
You’re spread too thin
If you and your team pull significant overtime every week, sooner or later something will break down. Mistakes happen when people become exhausted and put in extra shifts, and certain mistakes can lead to devastating consequences. Don’t let this happen to your company.
If you start to see that your employees are already stretched thin and customers have expressed dissatisfaction, despite your company’s increased business, you should strongly consider hiring or consulting with a 3PL to pick up some of the slack.
More often than not, your 3PL will implement strategies that will actually help you plan for the long-term upfront. This is one major added bonus to working with a 3PL that a lot of people do not consider. The knowledge that they bring to the table will go on to benefit you for years to come as it helps you streamline and better optimize.
You’re moving into unfamiliar territory
In some instances, you may be expanding or moving your business into a geographical region that you simply are not familiar with. You don’t know the people, the businesses, the customs, or the rules. This may seem like a minor hurdle to overcome, but these factors can weigh heavily on a business’s success when making a move to a new area, physical or otherwise.
In a more figurative sense, your business growth may require you to expand into an “unfamiliar territory” of your industry. In other words, you may not have strong skills in certain parts of your business that have suddenly become crucial elements to ensure success. Whether taken literally or figuratively, if your business has moved into unfamiliar territory, this may be an area in which a knowledgeable 3PL can help you navigate more successfully.
This is a really strong area of most reputable 3PLs. They have spent their time building connections across the industry, leveraging the latest tools, and gaining a keen sense of what it may take for a company to break through the wall they have found themselves facing.
You can’t sustain your current costs
As the complexity and needs of your business increase, so too will the overall cost of operation. Luckily, this too is an area in which 3PL companies are experts in finding more cost-effective solutions, from supply chain technology right down to on the floor strategies.
However, keep in mind that one 3PL may specialize in something more or less than another, so while their goals may be the same, they may approach it from a different angle depending on the services they offer.
How Should You Go About Looking for a 3PL?
When it comes to something as important as your business’s logistical needs, finding the perfect fit when outsourcing those tasks is a critical decision. Form the wrong partnership and it could be disastrous to your business. Form the right partnership and it could propel your business into the stratosphere.
Obviously, there are a variety of things to look for when trying to choose the right 3PL to hire. This is by no means an exhaustive list, but at a minimum, you’ll want to work with a 3PL that has all of the following qualities:
Competence and Experience
Perhaps the biggest “no-brainer” there is: you want your 3PL to be competent and experienced. They need to have a solid and positive track record that you can verify. How would others in the industry rate their experiences with them? Do they have access to the tools or supply chain tech you already know they will need? How does their approach to daily tasks align with your goals?
At a minimum, they should leave you feeling assured and confident. At the end of the day, doing a bit of research goes a long way in vetting potential partners.
High Productivity and Reasonable Hours of Operation
Will the 3PL’s hours of service accommodate your needs?
This is particularly important during busy times of the year, such as the holidays. While handling the day-to-day tasks is certainly a large undertaking on its own, they also need to be able to efficiently navigate the usual ebb and flow of business year-round.
Up Front Liability Practices
As mentioned previously, not all 3PLs operate the same and this is also true when it comes to liability practices. There is plenty of great and reputable third-party logistics companies out there to choose from (raises hand!), but just as with any other industry, you may run into a few bad actors or less-than-friendly partnerships.
Some less-than-reputable 3PLs may try to save on the cost by taking very little responsibility or being slow to resolve other issues with shipments that arise from their services. If they’re talking around the issue of liability and don’t have a direct, obvious answer about their liability practices available upfront, you should start looking elsewhere for your 3PL needs.
Your customers give you their business because they are trusting that their money and products are in good hands. If an issue arises, it needs to be addressed quickly and without many hurdles to doing so. If it is a situation that was caused directly or indirectly by your 3PL, they should be willing to stand by their work and resolve the issue. Before you hire a 3PL, understand what they will cover (and how) and what they will not.