Choosing the right third-party logistics (3PL) company is a critical step in building your logistics infrastructure. There are many ways to evaluate a third-party logistics provider, and one size does NOT fit all. In this article we will offer several topics to consider when evaluating third-party logistics companies.
Healthy Portfolio
As a business operator, you know the importance of maintaining connections with clients. Word of mouth can easily decide the fate of any business in an increasingly connected world.
When deciding on the best 3PL options for your company, ask a potential provider about their portfolio. How have they been able to go ‘above and beyond’ for their partners? Are they equipped to serve clients of any size, and clients who plan on expansion? Would they be comfortable with you getting feedback from any current or past customers?
Also be wary of red flags during your research – a company without an established track record and poor communication is likely not the company for you. Watch for honesty and openness – you should never get evasive answers to straightforward questions about services.
Strategic Location
Your distribution needs to be efficient to keep costs down and customers happy; the eastern United States is home to many important hubs of industry and commerce.
As an InterChange partner, you’d have access to our many industrial and commercial facilities in Virginia and Tennessee, expanding your territory to the entire East Coast. InterChange also has empty parcels of land available in the Shenandoah Valley region of Virginia to provide your business with a build to suit facility.
Provider Type
Asset or non-asset based third party logistics – what’s the difference, and how can it affect your business?
In a non-asset based logistics model, the provider may not own all of the assets involved in distribution, including warehouses, distribution centers, and transportation. Instead, these providers act as a middleman to negotiate with these third parties and independent contractors for the client.
An asset-based third-party logistics company owns most or all of the assets mentioned above. That means every driver and every person who comes into contact with your goods is thoroughly vetted and supervised directly by the company you hire. Asset-based 3PL companies will by design have more uniform quality control and supervision for drivers and workers.
What does this mean to a business owner? There is some research that indicates a non-asset based model can cut costs; however, in an asset-based model you’ll always know exactly who you’re working with and have a more open, long-term relationship with the people helping expand your business at every stop along the road.
Industry Specific Capabilities
No client’s needs are exactly alike, and a good 3PL candidate must be flexible to your needs.
What kind of capabilities do your products require? If you’re a food vendor, you need your 3PL provider to offer refrigerated trucks, pest control, and food-grade warehousing. If you’re a government supplier, you may be eligible for discounts on inspections, certificates, and consolidation. Included port services can save you time and money on international shipping.
If you need a variety of services in one location, InterChange can offer a Flex Warehouse space that can be customized with refrigeration, rack installation, and bi-level floor plans.
Know Your Challenges
When you approach your search for a 3PL partner, you must have a good understanding of your logistic and supply chain challenges. Where are the bottlenecks in your business, and how can a third-party logistics candidate address those needs?
A good 3PL candidate will be receptive to those challenges and offer you ways to overcome them. A wide range of services and capabilities, multiple strategic locations, and a well-trained staff are a good start; a partner who offers consistent service and good communication will give you the competitive edge your business needs.
Summary
Large or small, a business with distribution and storage needs can excel with the right third-party logistics partner. Your products are crucial to your business and deserve to be treated with the utmost respect and care.
During your search, remember the basics covered in this article:
- Evaluate the potential partner’s client portfolio
- Find the optimum location for your business
- Decide if an asset or non-asset based model is better suited for your needs
- Ensure the company has the required equipment and technology to handle your product
- Understand your limitations and how to overcome them
InterChange specializes in the 3PL services mentioned in this article, providing unparalleled supply chain management through the Shenandoah Valley and beyond. Contact us today to let us know the needs of your business so we can better understand how to serve you best.
