Because of the depth of the partnership that you’re likely to forge, with a company that executes a significant portion of your supply chain, it’s a lot easier to get the decision right first time around!
Spending extra time to obtain information from prospective 3PL (third party logistics) partners at the outset is far more efficient than having to change providers every year or two because the fit isn’t quite right.
Eight Important Questions to Ask When Picking a Logistics Provider
During the decision-making process you’ll undoubtedly read a great deal of marketing materials, watch impressive presentations, and learn a lot about the past successes of prospective logistics providers.
Where the rubber really meets the road, however, is when the time comes to ask your own questions.
These are eight recommended questions to ask a logistics provider before you make your final decision:
1. How long have you been in operation?
Age isn’t the only sign of trustworthiness, but it’s always good to know that a logistics provider has a proven infrastructure and established relationships in the industry. The answer to this question helps you to frame the rest of the discussion.
2. What custom services do you recommend for my business?
Possibly the most important part of your logistics partnership is having confidence that your provider has a firm grasp on your business requirements. If they’re able to make appropriate recommendations about how to best serve your customers via supply chain improvements, it’s a good sign that they’ll be a valuable partner. This also helps you to understand any limitations to the service a logistics provider might have, as discussions around customization tend to dig into the details of what can and can’t be done.
3. What is your core business philosophy?
Beyond all the service details and industry experience, you also want a supplier who does business in a way that aligns with your own company’s culture. This helps to minimize friction as you build the relationship, as well as giving you a deeper insight into what values the company holds.
4. What storage, packaging and assembly options do you offer?
You want your service provider to have an efficient order fulfillment system already in operation, preferably with minimal adjustment requirements to accommodate your business. While the ability to provide customized services may be important to you, the majority of the operation should be standardized so that the potential for disruptions is lowered. Also, remember to ask about building in some slack for storage and short-notice fulfillment. Again, you don’t want this to be the norm, but it’s good to know that some capacity exists to bend to satisfy unexpected bursts of demand.
5. Who are your trusted suppliers?
Just as your logistics provider will be an extension of your own business operations, the companies to whom they contract out their services are an extension of theirs. While you won’t necessarily have direct contact with these deeper organizations, you’ll want to know who they are and research their reputation as well. Who your potential choices trust also says a lot about their business priorities, such as whether they focus on keeping costs low or are willing to pay more for quality of service.
6. What operational bottlenecks do you anticipate?
This question (or one like that) will flip the script on question two, requiring the provider to think on their feet and anticipate any challenges that might arise from your supply chain requirements. It also provides an opportunity for you to both get on the same page, as you’ve likely already worked out (or seen before) where these bottlenecks will arise. If the 3PL raises them, all the better, but even if you have to coax them, their solution(s) will help you to decide if they’ll make a good operational partner.
7. What professional associations and accreditations do you hold?
Most of your confidence will come from earlier answers and the quality of client testimonials, but verification from trusted business associations can also be valuable. Some may even provide more information about the logistics provider in question, which can help to reduce the amount of time you need to spend researching for yourself.
8. Can you provide references from clients with a similar business?
A final (and crucial!) check is, as with any interview process, to ask for references. Although any satisfied clients that you can talk to are helpful, the most valuable are those in a similar field to your own, or those who have similar types of supply chain requirements. By this point you should be able to list any concerns you have about a potential logistics provider, so take the opportunity to ask these satisfied clients if they have encountered similar worries. While you might not get all the answers you need, the alternative perspective from someone on your side of the fence can go a long way to informing your decision.
It’s important to note that these questions are primarily intended to establish rapport and provide a starting point for further research.
For the former, you want to feel comfortable that the company you’ll be dealing with on a daily basis understands your business, its needs, and will be easy to work with.
On the latter, you’ll need to verify claims of success and operational ability, talk to past and existing clients of the company (if available), check on associated suppliers, and any other deeper research that will eventually support your decision.