Choosing a third party logistics provider is like choosing a best friend. You want your interests to be aligned, you want to provide value to one another, and you want the relationship to last for the long haul.
Why is this important to a 3PL partnership? Because maintaining a strong partnership can give you access to customized services, unique capabilities, updated technology, consistent supply chain management, cost-savings, and overall superior service.
So how can you leverage the relationship with your 3PL company to ensure it’s a win-win for both sides?
Before choosing your transportation best friend, make sure they can meet your needs in a superior way—better than other 3PL companies.
Most 3PLs have some sort of specialty in which they are especially proficient and experienced. This means they have specific skill sets, resources, and assets in accordance with that domain.
Consider what you most need from a transportation partner. Finding a 3PL that specializes in your specific needs can give you access to abundant resources and proficiencies you may not otherwise have.
For example, are most of your shipments international? Find a 3PL with a specialty in international transportation. They will have the knowledge and expertise to handle international concerns like customs, regulations, tracking systems, and multiple modes of transport (air, rail, water, road).
You can learn more about choosing a 3PL based on specialty here.
Just as you want your needs to be aligned with their offerings, you also want your brand story to be aligned with theirs. What are your values? Do they have similar values?
Does your company pride itself on its eco-friendly mission? Your 3PL partner should utilize green shipping practices as well.
Are you driven by technology? Find a 3PL that has advanced, cloud-based tracking and data consolidation.
Ensuring a symbiotic association of values is crucial, as it helps build the foundation for a lasting partnership. In essence, mutual values create a shared language that helps the companies interact, communicate, and grow in unison.
Having shared values enables you to set mutual goals, metrics, and incentives. Discuss with your provider what you want from them… and what they want from you in return.
You can both place significance on the same key performance indicators. If you both value customer service above all else, you can choose KPIs in accordance with service, like speed of delivery, order accuracy, delivery condition, and customer satisfaction.
Utilize these goals as a way to reach some sort of long-term vision. Define this vision between your company and your 3PL. This is important because it signals that you both have plans for a long-term partnership. It also ensures that every step of your delivery process is working towards the same result.
These shared goals are also a great place to start setting long-term contracts. You can utilize KPIs as a measure of success to keep your 3PL accountable.
Sharing goals, incentives, and vision creates a dualistic development pattern, where you and your 3PL grow in tandem.
Don’t have a single “point person” with whom you speak when working with a provider. Create contacts with multiple individuals throughout the company. Know your 3PL partner inside and out. Get to know their team.
Chances are, if you work with your 3PL for an extended period of time, you’ll have different needs and issues that will cause you to reach out to different members of the team. If you already have relationships with those individuals, it will make the process of communication smoother and more efficient.
This also helps to boost transparency. You know their company’s people… and they know yours. Transparency helps build trust, ensure integrity, improve accountability, reduce inconsistencies, and create a leaner supply chain. Learn more about the benefits of a transparent 3PL relationship here.
Ultimately, it’s important to view your 3PL as a collaborative partner rather than an outsourcing contractor. Better yet, think of your provider as the logistics and operations branch of your company. Ensure that all members of your company understand the benefits of working with this given transportation partner.
This creates improved communication to deliver results in accordance with those shared goals and objectives. Partners actively create value for one another.
Of course, price plays a role in how you choose and interact with your 3PL partner. However, it’s important you don’t focus too heavily on the price tag. Rather, create a value ratio of services to price. Compare multiple companies based on offerings and cost.
Be sure to prioritize those services and specialties that are most relevant to your business (in accordance with number one on this list). Often, paying a higher price for a specialty will significantly benefit your business’ growth in the long-term.
LTX Solutions wants to be your collaborative partner towards success. We believe in the importance of building and leveraging transparent, comprehensive relationships to drive measurable success. Drop us a note to strengthen your transportation and supply chain management immediately.