Going Beyond the Basics
With hundreds of 3PL providers competing for your business, you might assume that it’s easy to find the right one. Maybe it’s as simple as getting a few quotes and taking the lowest bid. That sounds great until your deliveries are not on time, inevitable challenges arise or the provider simply lacks the scale to meet your needs.
It’s better to take a more strategic approach. We recommend getting to really know a 3PL before signing on with them. We even urge our customers and prospects to do the same thing with us because we view 3PL as a partnership between the provider and the customer.
When you find the right fit, that partnership can grow together, more effectively serve you and ultimately help your business thrive. That’s why we suggest some uncommon questions to ask any 3PL before you go into business. Here they are, along with an explanation of why they’re so important.
In your relationships with customers, what value and benefits do you commonly get positive reinforcement on?
This open-ended question will show you what the 3PL believes they do well, but it will also reveal what they really care about. Look for cues that indicate responsiveness, and a real desire to hear back from their clients. Regular surveys and/or quarterly client reviews show this commitment. The best 3PLs seek customer feedback and strive for continuous improvement. Have them elaborate on feedback and provide specific examples. Consider how their priorities might affect your supply chain.
Where do current customers find the greatest value in partnering with you?
This answer should go well beyond pricing and basic services. The 3PL should see themselves as a strategic partner and work with customers with whom they’re a great fit. This answer helps show what’s important to the 3PL, so look for terms like strategy, long-term planning, continuous improvement, collaboration and problem-solving. You want more than a transaction with your 3PL – you want a strategic partnership. If it all comes down to dollars and cents, the 3PL will only meet the terms of the contract and never seek to improve.
The solution for our business today is critical, but we also want long-term success. How do you stay ahead of the curve to support your customers?
Remember that you want a partner who can meet both your immediate and future needs while handling the inevitable hiccups along the way. So find out how experienced the 3PL’s leadership team is, how they’re sourcing and retaining top talent, and learn what resources they have to offer.
A great 3PL partner will make your company better by taking things off your plate and making transportation and logistics work better for you. See if the 3PL has engineering talent, project management teams, technical expertise and more. These are resources that will help you grow. And speaking of growth, ask the 3PL how their business has evolved over the last five years or so. It can be very revealing.
How are your customers supported from the bottom up?
This speaks to the heart of the support you can expect when working with the 3PL. Dig deep to learn who is accountable and responsible for the success of your business. Find out how experienced your point of contact is. Determine how easily you can contact leadership should the need arise. Ultimately, you should have a talented and dedicated point of contact to solve problems quickly. Your interactions should be easy and collaborative. This is an intangible but it’s invaluable when facing challenges.
What defines your company and what are your organizational values?
3PL is ultimately a relationship business. You want to be sure you can trust and rely on those you are working with. If you view it as a partnership, you want to ensure you have a great partner. So ask who they are as a company. What’s their mission statement? What drives their company and people? How are their company culture and values? There’s no single right answer to these questions, but you should be left with a clear understanding of a company with a purpose. They should have long-tenured employees and active leadership. Ideally they’ll regularly gather and motivate each other. This is the kind of 3PL with which you can build relationships, trust in their experience and count on to make your business better. That’s because experienced and motivated employees at the 3PL means higher accuracy, faster service, abilities to proactively find and fix issues and lasting effective partnerships.
What’s your approach to understanding new customers’ businesses and identifying solutions that work best?
Now is the time to look for tailored solutions. The right 3PL will have deep experience with implementations and customer onboarding. They’ll be able to explain how they approach it and make you comfortable that it goes smoothly for new customers like you. Go ahead and directly ask them to define their process too. They should be able to explain how it would apply in your case.
The right 3PL will take time to become an expert in your business. They’ll ask tough questions, identify gaps and be certain they understand your needs so they can solve problems before they happen. They should challenge you and push you – this will ensure a smooth working relationship once it’s underway.
What does change management look like should my needs change?
Make sure they’re open to talking about this possibility. Your company is not static and neither are your 3PL needs. Make sure they can scale up (or down) should needs change. See if they’ve worked through major changes with clients like M&A, downsizing or exponential growth. Be sure they can evolve with your needs.
Talk to me about a problem you're having as an organization.
Make sure they’re open to admitting where they may have some weaknesses, be it in labor challenges, scale, service gaps or something else. They should be willing to show and understand that they can improve. No business is perfect and if they say they are they’re not being honest. Great 3PLs know when to say “no” or “I don’t know” at times – followed by a willingness to explore solutions. Even if something is not in their core competency, a good 3PL will help you find a solution.
The answer is value
A great 3PL partnership is all about value. Of course rates matter, but value comes in many forms. A true 3PL partner will always be helping your business. Whether that means saving you time, mitigating risk, overcoming obstacles or simply ensuring the best possible outcomes, value lasts. Just like a great 3PL partnership. So be sure to ask the right questions when you’re building your next 3PL relationship.