Choosing the right 3PL partner is critical to saving your company time, money, and potential headache. Whether you are a B2B or B2C oriented company, be sure to understand what to look for when selecting a partner for your warehousing, supply chain and logistics needs. Have a clear definition of what you are looking for, your product details, and what to check off in terms of the service offering that will help you save time and money. Below we dive into a few factors to consider when you are shopping for 3PL services – especially in cases where you ship larger, LTL orders.
Product Needs Must Match 3PL Service Offering
Before even shopping for an outsourced 3PL service provider, define your wants and needs for your product, the specifications, and what is working and not working in your current fulfillment process. Identifying friction points helps your 3PL provider understand where they can help and what services they can provide to alleviate the challenges you have faced in the past.
Furthermore, knowing your product dimensions, pallet size, turns, shipping destinations, average order size, and more provides you and the 3PL companies you are looking at more detail into how they can serve you. This will provide proper alignment for you and the outsourced 3PL service provider and save you a lot of time and opportunity cost going forward.
LTL Shipping and Impact on Supply Chain
LTL shipping is typically a must for companies that ship larger orders. While shopping for warehouse logistics services, ensure that your 3PL provider offers tightly controlled LTL shipping services, as it has multiple benefits:
- LTL Shipping Reduces Cost – If your shipment does not need FTL (full truckload) freight shipments, ensure you utilize LTL. “LTL enables shipments from multiple companies on one truck, which benefits your company as the shipment is divided amongst each company based on their own respective cargo weight. Additionally, this reduces the amount of handling vs. parcel shipping,” noted Brandt Jensen, CEO of Interwest Transportation, an asset-based 3PL that specializes in FTL and LTL freight warehousing.
- Freight or Cargo is More Secure – LTL freight is loaded onto pallets most of the time. Additionally, a pallet typically is wrapped – reducing the amount of wear and tear, rubbing, etc. from contact with other freight within the trailer.
- More Options for Service – within LTL shipping, options for service such as lift gates, inside pickup, special handling, freeze protection, and more are offered to ensure further security and ease of transport.
- Tracking is Improved – Most carriers provide real time tracking for picking, stops, and delivery status. Having a palletized shipment is easier to track and simplifies the workflow process.
- Reduces Emissions and Carbon Footprint – LTL shipping provides reduced emissions as it maximizes each truckload by combining multiple company’s shipments into one freight shipment. This reduces the amount of trucks on the road and helps reduce our carbon footprint, as well as your 3PL provider’s footprint overall.
The Importance of Warehousing, Freight Fleet, and Carrier Relationships
Warehousing, an in-house trucking fleet, and good carrier relationships are all pivotal to maximizing your relationship with your 3PL service provider. Each will save you time and money as there is less handling and the shipper can quote out various carrier options to choose the best value for you. While you can continue to manage your LTL freight carrier relationships, there are multiple benefits to finding a 3PL company that has its own LTL shipping division and/or has existing carrier relationships and ships high volumes of orders.
- The importance of Warehousing – choosing a 3PL provider that has a powerful WMS (warehouse management system), the ability to rack or stack, as well as process returns is especially important to your entire supply chain. Ensure that you can track inventory, place inventory where needed, and that the warehouse has the processes in place to reduce handling and pick and pack fast for expedient delivery.
- A 3PL That Owns Their Own Trucking Fleet – this cuts cost directly out of the shipping process. One less company means one less company to pay for handing and for their margin – which therefore increases your company’s margin. Common LTL discounts can reach 45-50% off published rates for 3PL companies that have preferred rates with carriers, and discounts can be significantly greater if the 3PL has its own fleet. Choose a 3PL that has its own fleet for freight delivery, and your P&L will thank you.
- A 3PL with Carrier Relationships – multiple carrier relationships mean more options for a shipment to choose from, so you can get the best value from your 3PL provider as well as each shipment. If you have varied product and varied order quantities, this helps get the best value and cost on a per shipment basis. Once again, your P&L will thank you.
The Impact on Your Operating Expenses & Bottom Line
Knowing your product and order details, while ensuring your 3PL provider has a full service offering including LTL shipping, full warehousing capabilities with a powerful WMS, various relationships with carriers, and their own trucking fleet will help you save a large sum of money on your shipments, operating expenses, and therefore improve your bottom line. Before shopping for 3PL services, ensure you know your product, your current fulfillment process, and what you are needing across your supply chain.
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