In a world where 86 percent of Fortune 500 Companies have at least one 3PL, it’s safe to say that whether you are a shipper or a carrier, you have either worked with or considered working with a 3PL.

Thus, it’s likely you know that thousands of 3PL choices exist. From such a huge number, how do you choose which one works best for you?

You can find a good starting point here, an article written by supply chain management consultant Martin Murray. Here are additional suggestions that can help you when choosing a 3PL partner.

Surveys have found that shippers want to see how the 3PLs fare at following. Be sure to look at these criteria:

  1. Operational execution
  2. People management and development
  3. Driving growth
  4. Change Management
  5. Strategic Planning

These surveys also indicate that shippers choose 3PLs for three reasons:

  1. Ability to provide continuous improvement
  2. Experience in a specific industry
  3. Ability to establish and ongoing relationship with the shipper

This is significant, because when a 3PL is vying for your dollars, the company will tell you that it excels at the latter three. Yet, surprisingly, 3PLs tend to underestimate the importance of these factors. Thus, it is imperative that you do your homework, because you could be in for a long, rocky relationship. Here are some steps you can take:

  1. Check references and ask specific questions to find out what improvements they have made and ask about the health of their relationships.
  2. Check their website. Do they talk about the industries in which they specialize? All 3PLs will tell you they can cater to any industries. However, if they have never delivered to a job site, and you have nothing but job sites, that will be an issue.
  3. Talk to carriers. Carriers know which 3PLs are difficult to work with. They can tell you those with which they prefer to work.

Did you know that after fulfilling a three-year contract, a 3PL is 97 percent likely to keep the contract?1 This holds true even if the customer isn’t happy, because it’s so difficult, time consuming, and expensive to change.

So do your homework. And, don’t let price drive your decision. Find a good match first, price second.

1 Capgemini Consulting, 2014 18th annual third-party logistics study

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