What Makes a Good 3PL Company and How to Choose One

If you’re like most business owners, you know you need a third-party logistics company to step in and make your operation more efficient and cost-effective – but where do you even begin? Check out this guide to what makes a good 3PL company and how to choose the right one for your needs.

Characteristics of a Good 3PL Company

A good 3PL company has a proven track record of success in:

• Logistics
• Trucking and transportation
• Distribution and warehousing
• Automotive logistics
• Intermodal trucking and drayage

You might not need all those services, but you definitely need a 3PL provider who’s proven in the field that it can keep up with today’s demands.

It’s often tempting – particularly for small businesses – to cut costs in 3PL. And while that’s completely understandable, you need to know that the best 3PL company for your business’s needs may not be the least costly. The right company will give you a competitive edge in your market and afford you the ability to grow.

Related: 7 benefits of 3PL you can’t afford to ignore

How to Choose a Good 3PL Company for Your Business

Before you can choose the right 3PL company for your business, you need to evaluate your own practices and identify strengths and weaknesses within your organization. Ask yourself:

• Where are we lacking? Is it through distribution, transportation of goods, or organization?
• Why do your customers choose you, and what can you improve to get them to keep choosing you over your competition?
• Are service and value part of what sets your company apart, or are you primarily focused on volume and speed?

Once you’ve answered these questions, you can start looking at 3PLs that may be able to help your company grow. 

Here’s what to look for in a 3PL:

• Skills and processes that will enhance your company’s logistics operations
• A corporate culture and vision that matches your company’s culture and vision
• Strengths that fill in the gaps where your company has weaknesses or room for improvement
• A willingness to understand your company’s mission
• Communication styles that you’re comfortable with, and the ability to clearly define the metrics by which you’ll each measure a successful relationship
• The ability to minimize your costs (but again, they may not be the “cheapest” in the business)
• Access to technology that simplifies and streamlines your processes 
• Flexibility in creating a plan specific to your business
• The ability to accommodate your business’s expansion

Ultimately, your goals for your business will determine what you need from a third-party logistics company. Working with a good 3PL company helps ensure you have the time, cash flow and energy necessary to focus on what’s most important: growing your business.

Related: Looking for the best 3PL company for your needs? 

Do You Need a Good 3PL Company On Your Team?

For most businesses, it makes a lot of sense to find a good third-party logistics provider – having another team in your corner can help your company tackle big issues like order fulfillment, warehousing, and shipping, as well as other pain-points most businesses struggle with.