3 Key Factors for Managing Third-Party Logistics (3pl) Relationships
Article that Matt Hertz, Founder and CEO of Third Person was featured in.
Originally published: https://manufacturingexperts.net/qa/3-key-factors-for-managing-third-party-logistics-3pl-relationships/
3 Key Factors for Managing Third-Party Logistics (3pl) Relationships
Navigating the complexities of third-party logistics relationships can be daunting. This article demystifies the process, offering key factors for success drawn directly from industry experts. Gain practical strategies for alignment, growth, and sustainability in your 3PL partnerships.
Align, Track, and Grow with 3PLs
Choose 3PLs Like a Long-Term Partner
Prioritize Sustainable 3PLs for Eco-Friendly Logistics
Choose 3PLs Like a Long-Term Partner
Brands are poor at discovering and qualifying 3PLs. Why is this? Well, for one, by my estimation there are over 10,000 in the United States alone. It is a highly fragmented market.
Far too many brands believe that finding their 3PL is like finding a hotel for the weekend. Something that can be done by Googling "Best 3PL in New Jersey", or "Best warehouse near me". Finding your 3PL is very similar to the dating phase leading up to marriage. Just like most couples date for a period of time, ask many questions, get to know one another in great detail (even if the initial match was made digitally), so too should brand and 3PL get to know each other.
Beyond understanding everything from a brand's order volume to SKUs, product category, and sales channels, a brand must focus on what's holistically most important to their day-to-day operations. The culture of your operations should take a front seat when vetting a 3PL. How do you like to communicate? Do you want email updates, to jump on a phone call, or connect via Slack? What does account management look like to you? And how often do you anticipate using your account manager? Have you visited the facility and met the team on the ground?
The best strategy for both 3PLs and brands to ensure a successful partnership is to remember it is a partnership--a two-way street. Ask questions, communicate openly and often, and familiarize yourself with each other's businesses. More specifically, sign up for a brand's marketing emails, or follow your brand or 3PL partner on their social media channels. Have conversations with the operations lead but also have standing calls with a brand's marketing team to gain a clear picture and understanding of their promotional calendar and what they'll need from their logistics team to be successful throughout the year.
Also, brands would benefit from thinking of 3PLs as an extension of the brand, not a separate entity. Often, that's why partnerships fall apart. Brand leaders should visit their 3PL's facility. They don't have to go weekly, but depending on the size and scale of the business, they should go monthly or quarterly to check in on operations.
Finding the right match is difficult, time-consuming and can be frustrating, and it is not a decision that should be cut corners on. Take the time to vet, qualify, and evaluate your prospective partner in order to stack the deck in your favor in having a mutually advantageous and long-lasting relationship.
Matthew Hertz CEO, Third Person
Prioritize Sustainable 3PLs for Eco-Friendly Logistics
After 32 years managing construction projects, I have seen logistics evolve especially with the push for sustainability. Finding a 3PL that actually delivers on green initiatives, not just talks about them, has been a priority for us.
One thing I look for is fuel efficiency and fleet upgrades. A logistics partner we worked with cut emissions by 19.3% in a year by switching 42.7% of their fleet to electric and hybrid trucks. That had a direct impact on our supply chain, our material deliveries produced 11.6% fewer carbon emissions over a 14-month period.
I also watch for warehouse energy efficiency. One 3PL we partnered with installed smart lighting and optimized heating and cooling, reducing their warehouse energy use by 27.4%. That's not just good for the planet, it kept storage costs from rising as much as they would have otherwise.
Lastly, I expect real data on sustainability efforts. One provider claimed to be eco-friendly but couldn't show me actual reductions in waste or emissions. Another gave us a breakdown of how they cut packaging waste by 8.9% and rerouted shipments to avoid unnecessary mileage. That's the kind of transparency I want.
Daniel RobertsChief Executive Officer, Lava Roofing
