Key factors to consider while hiring a 3PL partner
With the fierce growth in market competition and rising customer expectations, it is crucial for any business to ensure safe and timely delivery of goods at optimal cost and resources by streamlining logistics. Very few companies have the financial bandwidth to maintain in-house logistics and transportation teams and many market players have started outsourcing their logistics arm to a 3PL company (third-party logistics provider, specializing in all forms of logistical businesses) in order to ensure their customer delivery experience.
As the demand for logistics aggregators increases, a recent study estimates the 3PL logistics market to grow at 8.3% YOY from USD 976 billion in 2021 to USD 1,701 billion in 2028
There are a few things that you must ensure before choosing your 3PL partner:
1. Customer and Product Requirements
According to Statista, 43% of online shoppers want fast and reliable delivery and it has become a key requirement of every business. Thus, it is essential to check whether the 3PL partner can deliver products in the required geography at the right speed and meet the packaging requirements for your products .
In order to get best market rates, fully understand the 3PL partner’s pricing methodology (shipping rates, subscription and additional charges) and evaluate them against other competitors in the market.
- 3. Courier partnerships
3PL partners have partnerships with different courier service providers and leverage their own and partners’ capabilities to serve varied customer requirements. Their association with reputed partners signals better a better chance of ensuring safe, secure, and timely deliveries to your customer. Furthermore, a wide partnership network allows 3PLs to provide a wide array of offerings and value-added services such as same-day delivery, hyperlocal delivery, easy returns, or delivery instructions ability. Hence, choosing 3PLs with reputed and multiple course partners can help to ensure better customer experience and get a wider range of delivery services
- 4. Clientele
Check the list of past and existing customers as well as any service reviews and customer experiences of the 3PL partners. This will help you get an insight into their past performance, market-reputation, scale and service-quality. For example, you can learn how they have dealt with weather-related transportation problems, technology outages, labor shortages, and other logistics challenges.
- 5. Technology fit
A streamlined platform to manage shipping orders and related communication is a must for your organization to opt for a 3PL partner. Thus, it is essential to choose a partner that provides you with an easy-to-use platform that allows for end-end order management, including shipment tracking and returns management, on the platform itself.
- 6. Integration Support
Technology integration with 3PL still remains to be the biggest challenge for many players and having a provision for directly integrating orders from your website or marketplace is very important for your business. Check the availability of the right APIs in your system that can connect with the APIs of shipping aggregators and accurately transfer order data from your system/ website to their platform. This prevents any loss of orders placed in your system and keeps you updated about the fulfillment procedure.
3PL partners undoubtedly bring on board the expertise and experience to facilitate and simplify logistics for all e-commerce companies. At the same time, they provide the flexibility and scalability to grow and expand your business quickly as well as solidify your relationship with your customers.
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