Logistics as a Service: It’s the TEAM not the brand.
Logistics as a Service
In logistics, changes occur daily. It’s exciting, yes, but rapid shifts and reversals can leave even seasoned veterans overwhelmed. No one understands this better than manufacturers and suppliers who must continually navigate the near-constant upheavals these changes bring to the consistency and reliability of their supply chain.
Keeping up with trends in logistics, government regulations, and technologies is a full-time job and has many manufacturers and shippers looking to outsource their transportation needs to third-party logistics (3PL) providers. We call this outsourcing Logistics as a Service (LaaS), and it can be a boon to managers overwhelmed with transportation woes. But if you’re looking to outsource, it pays to be careful because the wrong partner can create even more problems.
Most shippers believe that large name- brand 3PLs with their vast technological, financial, and personnel resources offer the most value. That’s a fallacy I’d like to explore. You see, I understand that point-of-view, but in my experience–and I’ve been in the business for 25 years–these brand-name providers often end up creating more headaches for shippers.
Why does this happen?
Think about your big box stores for a minute. They’re hard to beat for low prices on groceries, t-shirts, and paint, but when you’re looking for help finding a bolt for the desk you bought at an auction or need advice on the best caulk to use around your leaking skylight, it’s nice to talk to an expert. And those guys aren’t on the floor, they’re sitting behind a big desk in a corporate office somewhere.
It’s the same thing when you work with a large-scale 3PL. You don’t get the whole company. You believe you’re receiving the vast resources in service to your company, but what you really get are the resources and abilities of the folks assigned to your team. In the big box store analogy, these are the hourly workers at Lowe’s. I’m talking about junior associates, following a playbook–recent college graduates with little to no experience in transportation.
During the sales process, you talk to the experts, the senior-level sales staff and network specialists. These people know what they’re doing. They’re sharp, experienced, and well-versed. After all, their job is to sell you the dream of hassle-free logistics solutions. The problem is these folks aren’t your team. They’ll help you get set up and then they’ll move on because their job is making deals.
The team assigned to your account is following a decision tree. You know what that means–when nuanced problems occur, they fly right off that decision tree. The inexperienced junior staffer must wait and seek approval from a higher up. Meanwhile, your freight is stranded, and you, your customers, and your carriers are frustrated and angry.
And what about all that technology you’ve been promised–state-of-the-art transportation management systems (TMS), high-end tracking solutions, and data analytics? Again, it all comes down to your team. If the people using the great technology don’t know how to use it and how to apply it to YOUR business, what good is it?
Name brand isn’t all it’s cut out to be.
Consider this–name-brand companies aren’t always better. Especially when you’re looking for specialized services. A 3PL that caters to small-to-midsize businesses offers benefits you wouldn’t know to ask about. Let’s talk about personnel. In smaller 3PL, team members know all aspects of the business. Typically cross-trained out of necessity, these team members have both the knowledge and the autonomy to make quick decisions.
Furthermore, data scientists and analysts are in the building of smaller companies. When looking for an innovative solution or an answer to a problem, team members walk across the room to get quick answers. They’re not filling out a ticket and sending it to central processing. In this way, your freight isn’t stranded while your team follows an internal hierarchy that wastes you and your customers’ time.
Ask the right questions.
If you’re considering Logistics as a Service (and I highly recommend it if you want to streamline your processes and get rid of your transportation headaches), consider working with a 3PL in your region–one with knowledge of your area and staffed to fit your needs.
I suggest you ask a few good questions when you talk to providers to find out who will be on your team.
- Are they experienced professionals with some transportation time under their belts or recent college graduates still wet behind the ears?
- If they have great technology–do they know how to use it streamline your processes, to save your business time and money?
- Will data scientists and programmers be assigned to your account?
Remember, it’s the TEAM–not the big brand–that will be handling your freight. Will that team make you a hero to your customers, your carriers, the rest of your company?
Don’t be afraid to ask.