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Why Companies Switch 3PL Providers

Hiring a 3rd party logistics (3PL) company can be an overwhelming process, so it’s certainly not unexpected that a business like yours would want to make sure they hired the right 3PL the first time.

Many companies have to switch their providers because they’ve made a poor match or overestimated the 3PL’s abilities. If you know what problems tend to cause companies to drop their 3PLs, it can help you to avoid a similar fate.

Common 3PL Problems

Having a small issue with your 3PL is probably not a good reason to jump ship, but when small problems become consistent or turn into much bigger issues, you may question what sort of value you’re really getting. Before you start to look for a new provider, however, it’s a good idea to know what other problems businesses have experienced.

Here are a few common issues to consider before making your next 3PL decision:

  • Poor customer service. A 3rd party logistics company that provides poor service can end up costing you a lot in damaged reputation and lost customers due to slow shipping. Other services like reverse logistics demand the best customer service teams and you deserve a 3PL that can really deliver. A good 3PL will be able to provide recommendations from current and former clients, as well as give you data on how quickly packages are shipping and how accurate the fulfillment is.
  • Technological turmoil. Technology is the heart of a 3rd party logistics company. Without it warehousing and distribution would be chaotic and you’d never know where your packages were. Good technology means you’ll be able to get up-to-the-minute reporting on things like inventory, orders in progress and even how quickly your packers can put a package together. If your future 3PL doesn’t have technology in mind, you might as well keep looking.
  • Lower prices. Pricing is only part of the equation when picking a 3PL, but unfortunately many businesses fall into the trap of choosing their fulfillment partner based on price alone. You must look beyond just price and see the actual value of your service. Do they pick, pack and ship quickly and accurately? Can they provide you with enough data to know what’s happening with your orders at any time? These are just a few things to look at along with price.

Companies switch 3PL providers for a variety of reasons, but change can be a difficult and painful process. Instead of putting your business and customers through the stress of a 3PL switch, ask the right questions so you don’t have to make another change later.

 

May 02, 2017
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