With over 20,000 3PLs in the country, it can be a challenge to determine how to choose a 3PL for your business.
3PLs (third-party logistics providers) in the United States range from giants like CH Robinson, down to the many hundreds of solo operators working from their home office. They serve an estimated 90% of fortune 500 companies, and a similar percentage of smaller businesses.
Which begs the question: if you’re trying to find your 3PL soulmate on Google, what should you type into the search bar?
Your Unique Needs
There are things that may be very important to you - such as a dedicated account representative, great customer service, low freight claim percentage, etc.
These are things that most 3PL’s will boast of providing, but in reality, are “prove it” tangibles.
Not everyone has great customer service; many 3PLs will bounce you between representatives. Others will struggle with high claim percentage because they only use the cheapest carriers to get as much business as possible.
So, how does one start to pare it down?
How to Choose a 3PL
Do you just need someone that can move palletized “robust” freight from dock to dock around the country? That’s a green light to check with one of the giants that specialize in volume freight shipments without any special needs or much concern about damage.
Do you need “white glove” shipping or a little TLC for your moves? That’s where the giants aren’t so giant. “White Glove” a term that everyone is throwing around, but not many 3PLs actively look for that business - it’s more of a necessary evil for a few of their customers. You’ll want to interview/search for companies that have made white glove shipping their specialty.
When searching for a 3PL that provides white glove shipping, ask an account representative what they would do to handle specific shipments that you’ve had trouble with in the past. This is a foolproof way to determine if they are “fluff” or the real stuff.
Do you need a hybrid of both palletized and white glove? Once you’ve found a few trusty 3PLs that provide white glove shipping, do a price exercise for a few of your recent shipments. Ask for pricing options for both normal freight and white glove service with the 3PLs that most interest you. Some may be stronger at the freight and some at white glove; there’s no harm in utilizing two different 3PLs for your moves.
Over time, you may see that you get a better discount with the one you spend more of your logistics dollars with.
Look For Experienced 3PLs
3PLs are popping up daily, and they’re also going bankrupt daily. You’ll want a group that you know is in it for the long haul. Let another customer groom and wean the toddler 3PLs while you take comfort in the welcoming arms of an experienced operations and management staff.
When a 3PL goes under, the carriers will come calling for you to pay their freight bills, even though you’ve already paid the 3PL. There are nightmare stories all over from companies having to “double pay” all of their invoices from 3PL’s not paying their bills. Always ask a 3PL how long they’ve been in business.
Insurance coverage is a large part of successful white glove shipping. Many 3PLs will rely on their carrier’s coverage, which can be very minimal, and are moving towards less coverage each year.
Your 3PL should be able to offer premium insurance from a reputable insurance company, not just a per pound coverage. Ask how long they’ve been with their insurance provider, and exactly how it would work for the product that you’re shipping.
Some carriers won’t offer coverage for used freight, so make sure they offer full coverage if that’s what you’ll be moving.
Sometimes the best affirmation is from an existing customer. They can give you the straight scoop and answer any questions or concerns you might have.
Ideally, there will be someone in your industry that the 3PL can refer you to. When you find a good reference, you’ll want to ask how quickly they respond to quotes, questions, and problems, and how their communication and customer service is.
Still not sure how to choose a 3PL? Contact the team at MoveIt. After 42 years in business, we know a thing or two about logistics. We’ll provide you with everything I’ve mentioned above and more.
Chad graduated from Iowa State University in 1996 with a bachelor of science in Statistics and has been involved in operations management and marketing for 24 years. His current work at MoveIt is focused on customer and vendor network development. He is happily married with 3 sons who are all heavily involved in sports and music like their father.