When your business grows, the orders placed with your company increase in number. More people get to know about your products, and the number of orders you need to deliver and ship everyday increase significantly. With the huge jump in the number of orders you process and deliver, the scope for errors increases too. Today, we live in a world where social media is at our hands every second of the day and customers take to social media to review a company’s products. This is why even the slightest of error can render a negative image for your company.
When times get difficult, and it gets increasingly tough for you to handle orders, it is wise to outsource your work to a Third-Party Logistics Partner or a 3PL Partner. However, when you outsource the work for your company to a third-party logistics partner, it is important that you make sure that they are the best fit for your business. Before we get into the characteristics that you need to look for in a new and good third-party logistics partner, let us first look into what exactly a third-party logistics partner is.
What is a third-party logistics partner?
In simple terms, a third-party logistics partner fulfils the orders that you take. They do so by managing outbound cargo, preparing route instructions, managing ground deliveries, arranging air and ocean freight deliveries, providing warehouse and distribution services, navigating customs and compliance regulations, offering supply chain consultancy, and more. Now that you know what a third-party logistics partner can do for your business, let us look into the six most important characteristics you need to look for in your third-party logistics partner depending on your nature of business before hiring them.
3PL characteristic #1 – Provides resources, scalability, and flexibility
Business is ever-changing, and with seasonal fluctuations in your orders, your third-party logistics partner should be adept at handling them all. In case you do business internationally, or your business grows across borders, you need to make sure that your third-party logistics partner has enough resources and flexibility to for air and ocean shipping. They need to have a strong local, regional, national, and international presence so that they can take care of all state, national, and internal compliances, customs, tariffs, etc.
3PL characteristic #2 – Have streamlined management and reporting capabilities
Make sure to ask your prospective third-party logistics partner about how they take care of management and reporting requirements. Do they have access to large warehouses and distribution centres in strategic locations which work best for your business and shipping needs? They should use good management software to help with streamlining the workforce and every element in the supply chain. Enquire if they provide real-time tracking of shipments not just to you but directly to customers too. Looking for a third-party logistics partner that provides you with analytics and reporting on past big data is helpful too.
3PL characteristic #3 – Strong track record of compliance, liaison, and deliveries
It is important to not only make sure that your prospective third-party logistics partner has personnel for compliance, liaison with customs, and international shipping but also that they have a strong track record regarding the same. If there is even the slightest shortcoming in their track record where the shipment was messed up, you need to not consider this partner immediately. Risking your business by giving the shipment reins to someone who has a previous bad track record is a big no-no. Also, ask for a track record for on-time and accurate deliveries.
3PL characteristic #4 – Attractive and flexible payment options
Always look for a third-party logistics partner who not only offers competitive and attractive rates for their services but also offers flexible and extended payment options. Make sure that their payment options adhere to the country and city where your business operates from. Also, look into whether the partner offers an extended payment option. Your business can take a hit any time, and it is wise to try and pay your third-party logistics partner at a later date after you have handled the other main entities you need to pay to.
3PL characteristic #5 – Offer consultative support and commits to improvement
In accordance with the first point, look for a third-party logistics partner that is flexible to improvement. Do they stick to their age-old processes and the one approach fits all strategy or do they offer you specialized services? Do they listen to your specific needs and requirements and build a logistics approach to suit you? Make sure you provide them with a complete idea of what you are looking for and see if they can come up with a comprehensive solution for it. In short, make sure that your interaction with them does not end on the transaction but extends to consultative support where they collaborate and improve with you.
3PL characteristic #6 – Excellent communication and customer service
Nowadays, the biggest complaints customers have from their businesses is poor customer service. In case that you decide to hire a third-party logistics partner, you are basically their customer. Make sure that you hire a partner that offers quick and prompt customer service to your every issue. Choose someone that is excellent at communication and does not speak with the mission of hiding any problems or charges from you. Look for someone who is willing to build long term relations with your company and is dedicated to serving you the best way they can.
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