3PLs and Cost vs. Service
Most people would agree that when measuring service levels, we’re taking into account both the efficiency and performance of any system–and in the transportation business, often more than a few services are required. These services range from tracking and visibility and worry-free scheduling to truckload optimization and expedited pickup and delivery to logistics consulting and full-service freight management.
Armstrong and Associates reports that 90% of domestic Fortune 500 companies now rely on 3PLs for their logistics and supply chain services. After all, an experienced 3PL provides logistics knowledge and expertise, a well-developed core carrier base, a transportation management system, and other innovative technologies. But there’s a problem.
With smart shippers looking to outsource some or all of their logistics needs, it’s time to take a look a hard look at service level offerings. In all honesty–shippers are too often worried about cost for services offered (rather than the service level offered) when vetting potential logistics partners.
And that’s shortsighted. Here’s why.
Service level is, at least as if not more, important than the suite of services offered. Think about it–you can have the coolest, newest, technology with bells and whistles out the yazoo, but if your team doesn’t know how to use it, it’s worthless. And that means you paid a lot of money for nothing.
By the same token, if a 3PL promises you capacity, but they don’t have long-term relationships with carriers, drivers, consignees, warehouses managers and a variety of other individuals all along the supply chain, when problems occur (and they will), you’re out of luck.
We’re not just talking about service level, we’re talking about a higher than normal level of service, and it’s what you deserve because that sort of service is available if you know where to find it.
How do you know which 3PLs consistently provide high levels of service?
First of all, consider working with an experienced 3PL in your region. One with knowledge of your area and staffed to fit your needs.
Secondly, get to know the team who will be assigned to your account and their ETA. No we’re not talking about estimated time of arrival, we’re talking about their Experience, Technology, and Autonomy.
- Experience. How much experience do the team members have? Are they career logistics professionals or recent college grads, with no logistics experience, trying to make their way up the corporate ladder?
- Technology. Technology is a great selling point, but will the team assigned to your account know how to use it to streamline your processes and save you both time and money?
- Autonomy. Find out if the folks handling your account can make quick decisions. Do they have the autonomy to get ahead of problems? Or are they working on a decision tree model–do they have to wait for higher ups to make decisions that will keep your freight on the road?
Finally, check out their Google and DAT reviews. They’re not hard to find, and they offer quick information about potential partners and the level of service they provide for cost.
If you’d like to know more about cost vs. service and what you can and should expect, give us a call today. We can answer the above questions and more because we offer the highest level of service available in the transportation industry. IN fact, it’s not in our DNA to fail.
And while you’re at it, be sure to ask about our Logistics as a Service offerings. We provide a wide range of services completely customized to your unique needs–all with incomparable levels of service.