3 Signs of Good Third Party Logistics Companies

With all apologies to Neil Sedaka, breaking up with an underperforming 3PL is not hard to do. If you had to Google that name, don't worry you're not alone. The legendary 1960s singer was mainly known for his hit song, “Breaking up is hard to do”. Little did he know that nearly 60 years later that popular jingle would be the topic of a logistics-based blog!

With the threats of a trade war looming overhead, many shippers are looking to start the new year with a new 3PL. As a matter of fact, it is this time of year that we see many shippers ditching their underperforming 3PLs. Needless to say, quite a few third-party logistics companies are going to be getting the axe before the end of 2019!

Indeed, breaking up is hard for many supply chain participants to do. But it is necessary in order to maintain fiscal responsibility to shareholders, improve service to customers, and ensure timely delivery of your valuable commodities. 

If you are in the situation where you need to replace your third-party logistics company for a better fit, make sure that they can check off these important boxes. These 3 key points are attributes that all good 3PLs share.

Here are the 3 Signs of Good Third-Party Logistics Companies

Clear Communication

When business relationships fail, one of the leading reasons is poor communication. It is rather amazing what can be accomplished and resolved when both parties begin the relationship with open and honest communication. Having this level of transparency between business partners tends to breed future success. However, this isn't something that is achievable with just any partner. All parties involved must be reputable, receptive, and have strict attention to detail.

Open and honest communication between the 3rd party logistics company and their client is crucial in today's competitive business world. Without a certain degree of communication, important tasks and other issues easily slip through the cracks. In the end, the lack of communication can quite easily leave partners always trying to play catch-up with each other versus getting the freight out the door in a timely manner. Ultimately, this issue can and often does lead to a massive decline in business.

However, it is just as important to partner with a 3PL that communicates on your level. If you prefer emails versus phone calls to discuss business or vice versa, your 3PL should have the flexibility to roll with those preferences with no problem.

It's important to remember, that any 3rd party logistics company you hire is likely going to represent your business to your vendors, suppliers, and most importantly, your customers. Always work with a 3PL that has proven over the years to be as transparent as they are hardworking.

Open Collaboration

There are multiple levels of 3rd party logistic tasks. Some shippers will hire them just to manage heavy haul, special handling, or international shipments. You know, the stuff that required an experienced touch.

Others depend on the 3PL to manage their entire supply chain operations. Regardless of what level you fit, it is important to work with third-party logistics companies that welcome your input and opinion. 

We talked about transparent communication above. Well, this is a bit different. Open collaboration is what happens as a result of that level of transparency. And without that transparent communication, collaboration cannot happen, or at least, not the way that is should.

The best third-party logistics companies are ones who welcome open collaboration with their partners. They welcome all questions and recommendations while providing honest and detailed answers that not only educate their partners but also prove to their customers why they are a valuable asset. Collaboration between partners also improves communication and helps to develop strong relationships for future projects. 

Flexibility to Changes

2020 is going to be a roller coaster of a year for the supply chain!

Currently, there are several pending legislation for shippers to consider in 2020. Some of these include the final implementation of the ELD mandate and a revolutionary new cross border trade partnership to be ratified at the end of the year. To face this head-on by yourself is far from advisable. It is going to require a well-built 3PL that can roll with the changes to carry you through to the next year without a scratch.

Add the upcoming presidential election in 2020, and you have a whole new ball of wax to deal with for next year.  

When researching 3PLs, ask them about their history of evolving changes, and how they dealt with them on behalf of their clients. A great resource for this is case studies. If the potential 3PL company can prove how they were able to solve problems for their previous or current clients, this should provide you with peace of mind knowing they will do the same for you. 

Above all, creating a new relationship with any 3PL depends on how well they treat you with that first impression. That first discussion that you have with any new business partner is critical to creating the relationship and starting it on the right foot.

Final Thoughts

Experience and a history of quality work are what you should be focused on when interviewing third-party logistics companies. Every shipper's needs are different and so there really is no "one-size fits all" sort of 3PL option out there.

Transparency, collaboration, and flexibility. Those are the 3 most important elements to consider when searching for your new 3PL. 

Still not sure where to begin? Drop us a line here at Redwood Logistics and let us help you start 2020 off on the right foot with the right partner!