As the term “3PL” or “third-party logistics” has grown almost instantaneously over the last decade, it has become even more important in the day-to-day functions of many businesses. Outsourcing your company’s logistics can assist in helping everything run smoother and ultimately, cut costs. But when seeking a third-party logistics company, it is important to weigh out all of your options. You must ask yourself, “what is it that I am really looking for in a 3PL company?”.
1. Can the third-party logistics company handle your business’ needs?
Is your company very large? Can the 3PL company handle the growth and expansion of your business? Will the company be able to accommodate your future needs and wants? Is there a certain service you are seeking that not all 3PL companies can offer?
2. What kind of technology do they provide?
Technology advances every single day and having the best technology available to you will only benefit your company. What kind of technology does the 3PL company provide? Do they offer customization depending on what the needs and wants of your business is? Perhaps your supply chain needs a higher level of strategic attention and can the third-party logistics company handle this?
3. Can the third-party logistics company provide you with clear communication?
Within the logistics industry, communication plays a large role. It is important when hiring a third-party logistics company that they can communicate properly to you, the business they are serving, as well as the customer. You want your 3PL company to provide you with information regarding shipping such as what is coming in, when is it coming in and how much of it is coming in.
4. Do they offer an array of other services?
Where as other services may not necessarily matter to you or your business, it is still helpful to know that if you need another type of service, the 3PL company you are using can provide it. Does the 3PL company offer white glove delivery? Does the company provide business-to-home delivery, business-to-business delivery, job site delivery or perhaps all of the above? It is vital to be aware of all of the services the third-party logistics company has to offer prior to conducting business with them.
5. How has the 3PL company serviced others?
Definitely do your research before working with a third-party logistics company. Read reviews, testimonials and view the company’s website. Be aware of all of the services they provide and see what others have to say about their experience with the company. Is the 3PL company active in the community? Do they have a company blog to keep people informed about their company and the logistics industry? It is important to become familiar with your prospective 3PL company to ensure your company is making the right business move.
Choosing a third-party logistics company can be quite stressful. Be sure that your business is conducting proper research and choosing the option that will most benefit the company as a whole.
As logistics have become incredibly important over the last several years, what are the advantages of having a third-party logistics company versus an in-house logistics department? By outsourcing your logistics, you are not only saving time but you are saving money as well!
By outsourcing your company’s logistics, you will:
- Prevent delivery mishaps
- Eliminate costly information systems and labor wages
- Expand in new markets
- Increase supply chain expertise
- Provide your business and customers with quality supply chain management
- Offer better web visibility tools for your customer
A third-party logistics company such as 3PD, can provide your business with the finest quality logistics around. The software that 3PD has is superior to its competitors and can truly benefit your company. 3PD provides scanning, routing optimization, automated call-outs, exception alerts via web browser, e-mail, fax and phone, delivery point scanning, proof of delivery, management and analysis, electronic interface and product delivery visibility. Outsourcing your business’ logistics will improve the performance of your business as well as moving it in the right direction.
Having a third-party logistics company can be beneficial because services can be customized and tailored to your individual needs. Not to mention, having an in-house logistics department can be quite costly and can be difficult to maintain as technology is constantly changing. 3PD has the most cutting edge software and can actually take the time to provide you with exceptional service as this is our specialty. Why worry about it or go anywhere else? 3PD is where your business should be.
3PD also provides business-to-business delivery, business-to-home delivery and job site delivery. 3PD also proudly offers “white glove” delivery services. We truly focus on last-mile delivery and logistics. See the 3PD difference.
“We’re in the business of selling windows, doors and skylights — not the trucking business,” says Al Altieri, director of distribution for WindowRama, whose switch to an outside provider has slashed the company’s transportation and logistics bill by about $2 million annually — twice what it expected.
The company’s new-found savings have been the result of a highly successful two-year relationship with 3PD, a “last mile” delivery and logistics provider. Based in Edgewood, N.Y., WindowRama operates 26 retail locations in New York, New Jersey and Connecticut. Some 80 percent of its business is in the high-end Andersen line, along with other big names in windows like Marvin, Pella and Weather Shield.
The company’s main distribution center at headquarters totals roughly 110,000 sq. ft., plus an additional 20,000 sq. ft. in the form of a warehouse mezzanine, giving it “enough room to handle 40 or 50 stores,” Altieri says. The majority of WindowRama’s products go through its DC, and customers have the option of picking products up at the facility, having them delivered to a store for pick-up or direct delivery to homes or job sites. Since the majority of products are bulky and fragile, most customers opt for direct delivery.
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For nearly 25 years, the company handled all transportation and logistics in-house through its own fleet, drivers and helper teams. In 2000, WindowRama decided it was time to outsource last mile deliveries to a national trucking company.“It was getting harder and more expensive to keep up with Department of Transportation regulations, to hire and train drivers and to keep up with all the drug testing laws that were being implemented,” Altieri says. “We decided outsourcing gave us the comfort of no longer being in the trucking business.”
By 2009, however, the associated costs were becoming excessive. “We had to commit to a fixed-cost arrangement for a 21-truck fleet, 21 drivers and helpers, regardless of whether we used them.” Furthermore, the company had to shuttle empty trucks from lots in New Jersey and Connecticut to its DC, a carrier-designed system that added a lot of miles to the transportation tab and another hassle for WindowRama.
“A lot of times those trucks were left unattended and we had no way of knowing for sure if every driver team had made it to the truck yard for pickups,” Altieri says. “Sometimes we didn’t know anything was wrong until a customer called to find out about his delivery.”
The system worked fine during the mid-part of the last decade, when the company was running up to 22 trucks per day. “But as the economy declined, we wanted the flexibility to pay just for what we needed,” he says. “That’s what the 3PD model proposed — a different way of doing business that required very little obligation on our part.”
The extent of the savings with 3PD was surprising to WindowRama. “We went into the deal looking at about $1 million in savings,” Altieri says. “But because the economy crashed the way it did, we were able to save closer to $2-$2.5 million due to variable rather than fixed-cost pricing. We now pay per stop — not by mileage.
“The beauty of this arrangement is that we know what each stop is going to cost us, which is helpful during those times when we’re dealing with certain customers who might or might not show up for their delivery appointment,” he says.
The move to 3PD did require some adjustment in thinking. “We’re very customer focused and we wanted to be sure our customers — including our stores — were being taken care of,” Altieri says. “We had been loading the trucks and supplying finished routes to our trucking company for deliveries [and] I was reluctant at first because 3PD loads and routes their own trucks. We still do address cleanup to make sure the delivery addresses are confirmed by a WindowRama employee before 3PD gets them.”WindowRama maintains loading crews to take care of trucks that go “over the bridges” to the company’s more remote stores. Meantime, the driver teams at 3PD handle products and customers as if they were their own.
“This has made me a big fan of the company’s owner-operator model,” Altieri says. “It’s made a big difference in terms of our product damages: They have gone down drastically, while customer satisfaction levels are way up.
“You could have the best sales people and the highest quality products in the world,” he says, “but if you get a delivery team that shows up late or looking less than professional or with a major attitude, it could sabotage the whole customer experience.”The retailer maintains a three-person dispatch department that deals with customers during the course of the day on WindowRama issues. 3PD provides another crew consisting of a manager, assistant manager and two clerical staffers to deal with delivery questions and issues. “So, we have seven people to deal with anything that might come up,” Altieri says. “Basically, this has enabled us to get rid of all customer service issues.”