As your business expands, you need vendors that can support your growth. A third-party logistics partner can manage your inventory, keep your shipping fees as low as possible and quickly get products into your customers’ hands while saving you money.
Asking questions is the secret to choosing a logistics partner. We’ve compiled some tips for finding a 3PL partner to help you handle this process and find the best provider to meet your needs.
What Is a Logistics Partner, and What Do They Do?
A logistics partner is a third-party company that stores and delivers products to your customers, manages deliveries and meets time estimates. By taking on these responsibilities, they free you and your team to focus more on other critical tasks. Logistics partners often provide the following services:
- Warehousing
- Packaging
- Picking and packing
- Order fulfillment
- Freight forwarding
A 3PL provider can use specialized and innovative technology to help you optimize your processes and supply chain. They can fill gaps in your supply chain or offer comprehensive solutions to manage your entire order fulfillment and delivery process. Logistics partners save companies time and money on warehouse facilities, logistics training, staff, paperwork and technology.
3PL providers increase companies’ logistics capabilities. As your company grows and your customer base expands, a logistics partner can step in and manage operations that you can’t handle on your own. They can also identify supply chain weaknesses, improving your processes with innovative solutions.
Which Industries Need Logistics Partners?
Generally, any business that needs speedy deliveries to function properly can benefit from partnering with a logistics provider. Industries that rely on 3PL providers include:
- Wholesalers
- Health care and pharmaceuticals
- Automotive
- Defense
- Manufacturing
- Retailers
- Food and beverage services
Do You Need a Logistics Partner?
You might prefer handling logistics independently if you have a new startup or enjoy controlling your inventory. However, you may need help as your business expands and you gain more customers. Consider looking for a logistics partner if you can relate to the following situations.
1. Your Customer Base Is Growing
Struggling to keep up with orders means your business is expanding. You’ve built a brand and attracted clients, and now it’s time to scale your resources to match. A logistics partner can help you manage high order volumes, streamline fulfillment and ensure timely delivery for your growing customer base.
2. You Have Limited Space for Your Inventory
Is your home or office full of your products? A logistics partner can store your inventory in a more convenient space. Say goodbye to the days of stacking boxes in your living room or office. With a 3PL provider, you can store your inventory in a safe, temperature-controlled warehouse and keep your home and workspace clutter-free.
3. Keeping Track of Your Inventory Is Challenging
Managing inventory and meeting delivery deadlines can become demanding responsibilities as your business grows and order volume increases. Failure to pay attention to your stock levels may lead to canceled orders and disappointed customers.
A reliable 3PL provider will streamline inventory management, monitor order flow and alert you when it’s time to restock — so your customers always receive their products on time.
4. You’re Paying High Shipping Fees
Businesses that ship inventory from only one location often have to pay expensive shipping fees to deliver products to distant destinations. Working with a 3PL provider lets you ship from multiple places, paying affordable shipping costs while reaching more customers.
17 Questions to Ask When Choosing a Logistics Partner
A logistics provider can directly impact your ability to reliably serve customers and strengthen your brand reputation. Asking potential partners questions upfront will help you find a partner that can scale with you. Use this list to guide your search for a 3PL provider that aligns with your goals and delivers consistent, dependable support.
1. What Technology Does the Logistics Partner Provide?
An effective 3PL provider will offer technology that streamlines and simplifies your processes. Since a logistics partner should handle the tasks that take up most of your time and energy, their technology should automate these processes. Ask the following questions when considering a potential logistics partner:
- Do they use cutting-edge technology that will support your business as it grows?
- Will their software use your data effectively and efficiently?
- Will their technology integrate well with your existing software and your online store?
- Does their technology have electronic data interchange capabilities?
- Do they offer a cloud-based system to manage warehouse inventory?
- Will their software help you track and process orders and manage e-commerce returns?
2. How Many Locations Can the Logistics Provider Access?
Before choosing a logistics provider, ask about their coverage and service area. A 3PL with multiple distribution warehouses and fulfillment centers can significantly reduce order transit times and shipping costs.
3. How Much Adaptability Can You Expect From the Provider?
Your logistics needs are as unique as your business. A one-size-fits-all approach rarely works, especially when your 3PL provider serves a wide range of clients. You may not need every service they offer — or you might require specialized support that others don’t.
Before committing, ask whether the provider can tailor their services to fit your operation. Can you choose only what you need, or do you have to sign up for a full-service package? Will they scale with you as your business grows or pivots?
Storage flexibility is another factor. Ask your 3PL partner whether they can adjust shelf space if your inventory fluctuates. A provider that adapts to your changing needs helps you stay efficient, save money during slow periods and scale confidently.
4. What Level of Customer Service Can You Expect From the 3PL Provider?
The best logistics partners communicate responsively and solve problems effectively. Before choosing a 3PL provider, make sure they offer quality customer service. Ask if they have references and talk to their current clients who operate businesses similar to yours. If the reviews are largely positive, you can likely expect to receive the same care and attention.
It’s also vital to check into a provider’s safety record. Regulations change frequently, so work with a company that consistently values and strives for safety. You can check a provider’s safety record online to make sure they take safety seriously.
5. Can the 3PL Provider Provide Reliability and Stability?
Choose a dependable logistics provider. How long have they been in operation? What is their track record? Do they consistently provide quality services as their company grows and changes? Research how they handle economic uncertainty.
A stable company can work with you and provide effective logistics services through times of growth, change and challenges.
6. Does the Provider Offer a Low Shrinkage Allowance?
Products can get broken, stolen or lost on their way to a warehouse or distribution center. Shrinkage refers to the difference between how many items you ship to your 3PL partner and the number of items stocked in the warehouse, available to ship.
Logistics partners often have a shrinkage allowance. This allowance is a threshold for lost or damaged merchandise before the fulfillment center reimburses you. Choose a logistics partner that offers a fair or low shrinkage amount.
7. Does the Provider Compensate for Mistakes?
Even 3PL partners who strive for efficiency and have a track record of excellent results can still make occasional errors. If a customer receives the wrong product or a damaged item, you have to pay to replace their order. However, some 3PL providers will compensate you for expenses if they were responsible.
Before deciding on a 3PL partner, ask if they offer assurances and compensation. Accuracy and performance guarantees are commitments that the provider will properly pack and deliver orders on time. If they fail to do so, you can rest assured that they will compensate you for losses.
8. How Much Experience Does the Provider Have Shipping Fragile Products?
Fragile items such as glassware, porcelain and technological devices require careful handling. Choose a 3PL provider with experience shipping fragile objects. An effective logistics partner can use the minimum packaging required, saving you money while safely delivering fragile products to your customers.
9. Does the Provider Ship Heavy and Bulky Items?
A 3PL provider that understands how to handle bulky and heavy items will deliver large products to customers without damage. A logistics partner that specializes in large or heavy shipments will properly package your heavy merchandise and deliver it safely while saving you money.
10. How Fast Can the Provider Ship Products?
Most customers are happiest when they receive their orders quickly. Choosing a 3PL partner that consistently achieves the fastest possible delivery times is crucial. Two days is the e-commerce industry standard, but same-day delivery is a high-demand perk.
Before you choose a logistics partner, make sure they strive for fast delivery and offer distribution centers in multiple regions. This coverage will help ensure your customers receive items quickly and remain satisfied with your brand.
11. Does the Provider Offer Same-Day Processing?
In addition to shipping times, order-processing times significantly affect how quickly customers receive their orders. Same-day order processing is a logistics trend that ensures same-day turnaround and faster delivery times. Customers who use two-day shipping generally assume it includes same-day processing — a 3PL provider should offer both services to lock in customer satisfaction.
12. Does the Provider Require a Minimum Monthly Order Volume?
Some providers require businesses to meet a minimum monthly order volume. You may have to pay additional charges if you don’t meet this prerequisite. Ask potential 3PL partners if they have a minimum order volume, how much it is and what they charge if you don’t meet it. This information is valuable if you experience slow sales periods throughout the year.
13. How Does the Provider Process Product Returns?
Product returns are inevitable in any industry. Evaluate how smoothly a potential provider handles returns and how quickly they put unwanted products back on the shelves, allowing you to sell them to someone else.
14. What Is the Provider’s Reputation?
Before choosing a provider, check their online reviews and testimonials and consider how long they have been in business. Dependability is an excellent sign that you can trust a company to meet your needs.
15. Does the Provider Have Strong Existing Relationships?
3PL providers work with forwarders like port officials and steamship lines. A provider with strong existing relationships can provide consistent services, saving you money and delivering your products efficiently. Your logistics partner should have relationships that will help you secure the best carrier rates and keep up with cargo volumes.
Ask potential 3PL providers if they work with your preferred carriers and process international shipments. Ensure they can handle the paperwork different countries require and have positive relationships with international carriers. International shipping processes involve many different factors, so choose a logistics partner who knows how to handle them. Even if your company doesn’t ship internationally yet, you may gain overseas customers as your business grows.
16. Does the Provider Align With Your Company Culture and Strategic Vision?
Strategic alignment is crucial for a 3PL partnership because it means both parties work toward the same business goals. Close collaboration with your provider gives you access to a whole new team of professionals who can help you achieve your goals more effectively.
Here are some other benefits of ensuring alignment with your logistics partner.
- Consistent communication: You and your partner must stay in touch to mitigate risk and ensure timely completion of essential tasks. Ask which communication channels a potential provider uses to determine whether they will be a good fit for your organization.
- Enhanced overall efficiency: A logistics provider can give you access to people, processes and technologies you may not have been able to access alone. You can also synchronize resource allocation with your partner’s everyday processes, making your company more resource-efficient.
- Resilient supply chains: When you and your 3PL share the same business goals, it’s easier to pivot in response to supply chain disruptions and other economic issues.
- Cost savings: You can reduce some of the unexpected costs associated with cost shocks and supply chain disruptions by making your supply chains more resilient and resource-efficient.
Ask questions about your potential partner’s short- and long-term company objectives to gauge your business’s compatibility with them. You should also sound out their values and mission statement, as cultural fit is a significant factor in partnership success.
17. Can the Provider Handle Various Products?
Does your potential partner have the capacity to handle all the products your organization deals with daily?
For example, if your company sells products containing hazardous materials, you’ll want to know whether your 3PL adheres to regulations such as those from the Federal Motor Carrier Safety Administration and the Occupational Safety and Health Administration. To find relevant information on the provider’s compliance history, check the U.S. Securities and Exchange Commission’s public database. This database, also known as EDGAR, houses company details such as financial reports and compliance status.
Ask the provider for a complete list of all products they handle. If anything crucial to your operations is missing, that’s a red flag — it could lead to delays, added costs or the need to source from multiple vendors.
Evolving Solutions and Future Thinking in 3PL
Choosing a logistics partner requires a forward-thinking approach. Inquire about the following trends and innovations when looking for a long-time 3PL partner.
Expansion of Omnichannel Logistics
Logistics aims to connect retail purchases to the physical flow of products from the business to the customer. 3PLs must simplify supply chain management as brands begin adding more sales channels to their portfolios.
Traditional logistics processes used separate supply chains for each individual sales channel, which can lead to inventory issues. Omnichannel distribution is an emerging solution to this issue.
Omnichannel logistics is a similar concept to multichannel logistics. However, where multichannel logistics sticks to a binary system of online and offline sales, omnichannel logistics encompasses all potential channels:
- Conventional e-commerce platforms
- Social media APIs
- Brick-and-mortar stores
- Third-party retail partners
- Brand-specific shopping apps
Omnichannel logistics also enables various options to cater to customers with different needs, such as same-day delivery and in-store pickup.
Rising Demand for Same-Day Delivery
Same-day delivery is a critical service in today’s fast-paced, streamlined logistics environment. SDD is a client-facing service that includes the last mile of a shipping transaction if a customer places an order before a specified cutoff time.
Partnering with a logistics provider who offers SDD can benefit your company in several ways.
- Increased revenue generation: Generally, customers are willing to pay more for faster delivery. They’re also more likely to make impulse purchases when they don’t have to wait as long for their order.
- Customer loyalty: Offering SDD can help you outperform slower competitors, making customers more likely to choose your brand.
- Optimized logistics: Adopting SDD requires a comprehensive overhaul of your operations, benefiting all your deliveries as a result.
Integration of AI and Automation
Forward-looking 3PLs have revolutionized their operations with AI-based and automated technologies.
- Predictive maintenance: This technology uses AI to analyze historical maintenance data and predict when a piece of equipment will require service. Real-time monitoring capabilities also make it easy to check equipment’s condition anytime, significantly reducing the risk of a breakdown or malfunction.
- Robotics: Many modernized 3PLs and distributors leverage robotic solutions from brands like Brightpick, Geek+ and FANUC to improve efficiency and fill labor gaps. Choosing a partner that uses these solutions can improve revenue generation and enhance the customer experience with faster delivery and a reduced risk of human error.
- Internet of Things: A network of internet-connected devices, such as environmental sensors and RFID tags, collects real-time fulfillment information, improving delivery tracking and protecting products from damage.
- Warehouse management software: A WMS uses AI-powered analytics and reporting capabilities to provide visibility into inventory, fulfillment efficiency, space use and other vital warehouse metrics.
Ideally, your partner should seamlessly integrate their technologies into your operations. Confirm that your existing processes and tools are compatible with the systems your potential provider uses — you can often find this information by asking a simple question or browsing their website.
Stronger Focus on Sustainability and Environmental Compliance
With governing bodies passing increasingly strict environmental regulations for businesses across virtually every industry, working with an environmentally conscious 3PL is critical for simplifying annual compliance management.
For example, updated EPA transportation regulations apply to all logistics companies operating in the U.S. Doing your due diligence before partnering with a company includes investigating their compliance record for all these requirements in addition to industry-specific standards and regulations that may also apply to their operations.
Companies also face growing pressure from consumers to incorporate more environmentally friendly practices into their everyday operations. Choosing a logistics partner can satisfy this desire, inspiring customer loyalty and potentially attracting a new audience.
Choose ExpressIt Delivery as Your Third-Party Logistics Partner
A reliable logistics provider can provide the optimized processes and innovative solutions your company needs to break through limitations and grow. If you’re looking for individualized logistics solutions tailored to meet your needs, ExpressIt is here for you. With locations across the Northeast, we can customize delivery processes to help your company expand, save money and efficiently serve your customers.
From cost-effective white-glove delivery to a transparent client portal, ExpressIt will take excellent care of your customers. When you choose ExpressIt as your 3PL logistics partner, you can rely on an experienced team that genuinely cares about your company’s success. Contact us to learn more about how we can meet your logistics needs and support your growth.