Third-party logistics (3PL) providers offer end-to-end management of services related to order fulfillment. 3PL providers use their expertise, technology, and vast network to streamline processes for customers who need support.
For example, a small e-commerce business can scale up to the point where it requires help with inventory management, warehousing operations, and transportation services. A 3PL provider can fill all those voids through sourcing vendors who meet customer needs.
So, what makes one 3PL provider better than another? And what should a business look for in a solutions-driven partner? The following seven qualities are everything that a sound 3PL provider should have.
Cutting-Edge Software and Analytics (Information Technology)
Working with a 3PL provider means using advanced technology and proprietary software, ensuring transparency and agility to do business that is crucial for customers' success. A tech-enabled 3PL provider is data-driven and forward-facing, identifying and understanding industry trends and providing predictive business insights for end customers to stay informed.
Strong Carrier Network for Extensive Coverage
With driver shortages continuing to plague the industry, locating quality transportation capacity can be overwhelming. With increasing specialization and competition among shippers for capacity, sourcing proper equipment to meet SLAs becomes even more challenging. Utilizing a 3PL with deep carrier relationships and a robust network of capacity is necessary to solve this problem
Customer Service That Returns Results
Within a 3PL, offering an array of services doesn’t stop with connecting the right load with the right equipment. The service that is truly provided comes from the individuals behind the desk or phone. Understanding your network and building relationships with carriers and customers allows dedicated teams from the service provider to work preemptively, keeping the supply chain efficient and moving.
Partnering with a 3PL means diverse opportunities for keeping your assets in motion. While the industry evolves, communication and agility have become focal points in designing a flexible network. A dependable 3PL structures its network to pivot quickly, as distribution patterns remain volatile, and ensures quality when matching varying equipment types for customer shipments. Streamlining technology and one-to-one service gives carriers and customers visibility into inventory capacity for all parties, creating that tight-knit supply chain.
A quality provider can customize and optimize a carrier-sourcing strategy based on inputs from the network design. Systems like load optimization, route-guide management, and carrier-tendering strategies are just three tools a 3PL can use to inform its capacity-planning processes. Even when it's difficult to plan to find truck capacity, a solutions-driven provider will offer a spot procurement tool to solve the issue in real time.
3PLs can act as an intermediary between customers who need shipping services and carriers who provide capacity. 3PLs are driven to provide a best-in-class solution, experience, and interaction throughout the life cycle of a shipment. This can be achieved only with full transportation life-cycle visibility, a cornerstone of any quality 3PL provider.
That's why the best 3PLs can comprehensively analyze and evaluate a customer's supply chain process to consult on areas that need improvement. A 3PL can use industrywide information and predictive knowledge to create a strategic plan that is both time- and cost-efficient. Additionally, integrated business analytics will contain all the data needed to make any changes down the line.