Third Party Logistics, abbreviated as 3PL, is emerging as a solution for SME owners looking for an easy and affordable way to streamline supply chain processes. The basic role of 3PL companies is transporting freights between the buyer and seller. Since each company transports different goods, has its own budget, geographical location, and other essential factors, selecting the right 3PL provider is an important decision. The following guidelines highlight the key factors that you as business owners need to take into account for choosing the best 3PL provider:
- Scope of business- A major factor that should be considered while choosing a 3PL provider is the size of the business. While a basic 3PL that provides only transportation might be sufficient for a small business, medium and large enterprises usually require more advanced services, including additional services like customs clearance, warehousing, delivery, etc. However, it is also important to take into account plans for future expansion and ask whether the provider shall be able to accommodate them later.
- Background check- After short-listing a few providers in the region that meet your business goals, you might want to do a background check of these providers and even talk to their previous clients. This is important to avoid any unpleasant shocks later while using their services.
- Detailed questioning- When you have around 3-4 providers left to choose from, the next step is to prepare a questionnaire and get it filled from all these providers. While the most important consideration at this stage for most SME owners is the cost involved for the needed services, there are several other important factors that should be paid attention to. For instance, you might want to ask the providers about their method of tracking shipments, global services, specializations, etc. An important pointer here is that while comparing rates ensure that you have included all services required for an all-inclusive quote.
- In-person investigation- The last step before finalizing a 3PL provider should be an on-site investigation, carried out in person. It is a good idea to have at least 2 providers shortlisted at this stage. Ask them to walk you through the entire process of freight forwarding, and pay special attention to their equipment, personnel, services, and customer care. This is also a good opportunity to judge the industry knowledge of these providers.
