Third-party logistics (3PL) relationships are becoming more and more important. “Inbound Logistics” had an excellent article in their February 2010 issue that is still true. They pointed out how 3PL providers have become more popular since they can provide services at a cost below what companies could obtain themselves. They offer capacity, expertise, technology and buying power on a scale not available to shippers on their own.
In the article, they offer five hints on how to build better 3PL relationships:
- Make sure your 3PL has the legal authority to provide the services it is offering
- Ask your 3PL how it qualifies carriers
- Find out what technology tools the 3PL offers that could help you work smarter, faster, and more efficiently
- Check out the 3PL’s financial health
- Execute the correct type of 3PL contract
Obviously, you want to assure that any company you work with has all the legal requirements they should have. If not, you might be up the proverbial creek if anything goes wrong. In qualifying carriers, make sure they carry adequate insurance, that they have an excellent safety rating and that they will not be re-brokering your shipments without your consent.
One of the most important reasons to use 3PLs is to have access to the most modern and effective technology. This is one of the major areas in which a 3PL can provide a service you could not afford on your own. If you have special needs, can their technology take care of you? This is an area in which you can obtain great cost savings.
Verify that the 3PLs you work with are in good health financially. Check out their credit history and request a certificate of insurance that will cover you and your cargo. If you see anything you don’t understand, request clarification in writing of any promises they make
Make sure you have an adequate written contract with the 3PL and that any clauses are enforceable and protect your needs, not just theirs.
As the article points out, 3PLs offer tremendous value if you do your homework. See how Dupre’s 3PL services can be a great fit for your organization.