10 Things Brands Should Know Before Choosing a 3PL
Choosing a third-party logistics provider is a make-or-break decision for brands, especially consumer packaged goods. Brands should find an honest partner who will support them and facilitate growth. Here are 10 things brands should know when evaluating a 3PL.
1. Use a pricing tool during the RFP
Pricing is one of the biggest inconsistencies in logistics. Every provider has different terms, conditions, bundles, and ways to bill clients. An exceptional 3PL will give a pricing tool where companies can input their own order volume, SKU count, shipment profile, and see what the real cost comes out to. Immediate transparency proves the character of the 3PL and its true intentions.
2. Check accountability
Fulfillment errors are inevitable. Package delays, damages, cost companies. What makes the real difference is how the 3PL deals with those errors. There should be clearly defined processes for all types of errors including the timeline, calculating the credit, and tracking them. Brands should always review the SLA for accountability.
3. Sign a short-term contract
3PLs are a relationship. Brands shouldn’t have to sign on to a long-term commitment. Loyalty should be earned through execution and performance. Brands deserve the flexibility to course-correct if things aren’t working, and the right partner won’t be afraid of that conversation.
4. Make sure SLAs are calculated fairly and paid out timely
Service level agreements are only as valuable as the system behind them. Read the fine print for who is tracking, how are they calculated, and what is the timeline for issuing credits. Brand should ask to view real examples of the SLA processes.
5. Batch shipping vs. same day shipping
Some 3PLs offer cost savings for consolidating orders to ship once a week. However, batch shipping has its downfalls. For example, if a customer places an order on Wednesday, but the batch shipment is on Tuesdays, the order won’t be delivered for eight to nine days. Before agreeing to any shipment schedules, prioritize your customer first. Same-day shipping isn’t just a nice-to-have; it’s table stakes.
6. Inventory demand planning tools
Every 3PL should have an efficient and intelligent process to manage product. Inventory demand planning is one of the most overlooked capabilities in fulfillment partners, especially for frozen and refrigerated brands. Overstocking in cold storage is a costly mistake. A good 3PL has tools to anticipate demand, flag low inventory and expiring product, and plan for seasonal fluctuations.
7. Last minute issues
In frozen fulfillment, problems and opportunities don’t wait for traditional business hours. A product recall, sales opportunity, a USDA or FDA issue, etc. These situations are time sensitive and having a direct line to leadership can be the difference between a lost customer or a high expense. Every client has a direct line to our leadership team not because issues are common but because we believe it is a measure of a true partnership.
8. Weather based SOPs
Weather is one of the biggest variables in frozen fulfillment. Cold chain 3PLs should have documented, proactive standard operating procedures for weather events. Adjusting pack-outs and transit time, monitoring forecasts, and constant communication when conditions change is fundamental.
9. Carrier rates and zone skipping
Not every 3PL practices these tactics, but they make a huge difference in cost savings and quality control. Brands should ask direct questions like how carrier is selection optimized, do you zone skip, what does this look like when scaling volume.
10. Know your partner
Some companies have several risks including financial, SLA, and priority risks. Instead, partnering with the right 3PL can allow direct contact, a business relationship, and clearly aligned operational priorities. Frozen logistics requires a high level of control and accountability. A true partnership with an exceptional company achieves this.
Need a fulfillment partner you can trust? Get a quote from egourmet.com!