Outsourced Logistics Services: 4 Questions to ask 3PLs
4 minute read
Are you tired of inconsistent and unreliable service from carriers and logistics partners or embarrassed by your current supply chain practices? Are you losing customer respect because of dropped loads and service failures or frustrated with a general lack of visibility in your supply chain? Are you discouraged by the amount of time you spend reacting to transportation issues? Are you wary of outsourced logistics services?
If the answer is yes to one or more of these questions, it’s time for you to find a logistics partner you can trust. You need a third party logistics provider (3PL) with your best interests at heart. Did you know that according to Armstrong and Associates, 90% of Domestic Fortune 500 companies rely on 3PLs for outsourced services?
Do you know why more and more shippers are working with 3PLs for outsourced logistics services? Chairman of Armstrong and Associates, Dick Armstrong, explains most customers outsource “in order to control costs and increase supply chain efficiency.” The problem as we see it is that company size is a great predictor of 3PL use. The larger the company, the more likely it is to use at least one third party provider for outsourced logistics services.
But guess what? Working with excellent 3PLs isn’t just for the big guys. When small to midsize manufacturers and distributors partner with a 3PL for outsourced logistics services, they get a lot of bang for their buck by way of state-of-the art technology and transportation management systems, predictive analytics, and advanced knowledge of regulations and liabilities.
So why are so many small to midsize manufacturers wary of outsourcing their logistics services? Change is difficult. And often managers are operating under the assumption that handling logistics in-house or working only with asset-based providers is best. And for many years, this might have been true. But supply chain processes are changing almost daily. In the midst of all this change, it’s very likely that your supply chain is not operating at maximum efficiency. But how do you choose a logistics partner that will work with and for you, that will treat your customers like their own, that will offer only the technology you need?
Asking questions is a great way to vet your 3PLs for managed freight services, but you have to know the right questions to ask. Below we’ve compiled four of the most important questions to ask potential 3PL partners.
Do you compete or collaborate? Many large 3PLs operate on the theory that competition provides the best outcome. But we’ve found that collaboration, at least in office, is a better indicator of 3PL value. You want a 3PL where team members are cross-trained in all aspects of the brokerage business, where team members work together rather than against each other to make sure that your freight is taken care of from pick up to delivery.
Who answers your phones? Digital brokerages are all the rage these days, but they lack one important element and that is human beings. Human beings provide customer service. You deserve real, live logistics experts who answer their own phones. Automated phone services are a drag when you have an important issue that needs to be addressed immediately.
Experience and Longevity
How long have you been in business and what is the average tenure of your team members? Don’t be afraid to ask potential partners how long they’ve been in transportation because it matters. Perseverance in a constantly changing industry shows adaptability and flexibility. You want to know how many carriers they work with on a regular basis and how many long-term customers they have. And don’t forget to ask how long their team members stick around. The longer the tenure of the average team member, the more likely it is that your freight will be managed by a seasoned professional with contacts and experience.
Tell me about your technology and how you’ll use data to improve my supply chain? Technology is often listed as the most important factor in choosing a logistics partner, and it makes sense. It’s hard to believe, but Adrian Gonzalez reports that a whopping 60% of organizations are operating without a transportation management system, or have an older system that relies highly on spreadsheets. We can’t stress enough just how important advanced technology is in this new logistics landscape. Gonzalez explains that 3PLs can use technology to cut waste, predict budgets and expenses, and create actionable insights into your supply chain processes.
At AM Transport Services, we strive to provide the best outsourced logistics services to the manufacturers and distributors we work with. If you’re interested in taking the next step towards outsourcing your logistics services with a qualified 3PL, schedule a call today.