A Third Party Logistics Company helps distributors, manufacturers and eCommerce retailers by managing their inventory, storing it in their facility and shipping products out. There are many reasons you may choose to work with a 3PL. These include a better location to quickly ship goods from. Improved order and shipment handling. Using an outsourced vendor for their skill-sets, automation capability and especially nowadays, human resources may also help you to grow your business. It is a common challenge to be able to hire, maintain and develop your warehousing workforce.
Additionally, good 3PL’s can provide even more value. They may be able to help with procurement, assembly or packaging. There are some challenges though. Depending upon the vendor supply-chain viability and control can be lost if there are not systems and plans in place.
Our company works with distributors and manufacturers who normally do a hybrid of on premise warehousing and shipping along with a 3PL for some types of products or customer locations.
Within DCWarehouse© Automation there is functionality that supports the transmission of picking and shipping information in and out of our software for remote warehouse locations that do not use it. It is designed for our clients that do not want to spend a lot of money on remote DCWarehouse Users, Integrations into other WMS/ERP Systems or over-spend on EDI Solutions to resolve a simple problem, recording and tracking shipments.
We also have some customers that license DCWarehouse Automation and the 3PL Vendor’s team uses the scanning devices for all inventory and shipping activities as if they were actual employees. Wherein this approach is a little more expensive, it also provides instant and real-time data.
So what should you consider if you plan on using a 3PL? Here are some good questions I think you should ask:
- Do You Support These Activities and Shipping?
- Less-than-truckload, Truckload, Managed Transportation, Dedicated pop-up fleets, Expedited, Air, International, Inter-modal/Rail? (Base these on Your Needs)
- Do you handle both Warehouse & Fulfillment Solutions?
- Are you willing to work with our software/shipping solution to make it easier on us?
- Can you use our shipping accounts or is it cheaper to use yours?
- Do you handle Final Mile, White Glove or Home Delivery?
- Do you handle Canada or Mexico Cross Border?
- Do you handle International Shipping?
- Will we have a dedicated Customer Representative or Account Manager?
- How do you charge for your services? Storage? Shipping?
- Do you offer shorter term “trial contracts” to see how well we work together?
- May I speak to a few customers as a reference for your services?
- Can you use our system to enter activities such as shipping etc.?
There might be even more questions pertaining to your particular situation. Set up a test scenario and note each step of the process and what questions arise at each step. Make sure you have a comfortable working relationship with the 3PL company and that you are satisfied with their answers. Let them know collaboration is important to you as well as honest feedback. You should be able to work together to achieve a solution that works for you.