What to Look for When You Compare 3PL Providers

Third party logistics, commonly referred to as 3PL, is the offering of outsourced (3rd party) supply chain management services by a single company. The 3PL provider may offer a complete range of logistics to support all supply chain functions or they may provide any mix of services within the supply chain.

Many US companies involved in 3PL services have a trucking industry background or strong relationships with trucking. When you compare third party logistics providers, some will have access to ocean port, railroad or air freight, but nearly all will include trucking connections. This is because 3PL is moving toward greater and greater integration of supply chain services.

What 3pl Providers can do in Warehouse Management

Third party logistics companies who provide warehousing services can offer businesses tremendous value as well as savings.

As you compare 3PL providers, go ahead and bring your challenges to the various providers to see what solutions they can offer. One provider may have particularly strong technology for inventory control and management; another might specialize in crossdocking, while others can provide multiple locations strategically situated for maximum distribution to a region.

What Companies Should Focus on When They Compare 3PL Providers

There are essentially three kinds of third party logistics companies: asset based, management based, and integrated providers. To properly compare 3PL providers, you need to understand what services are offered and how they are delivered.

Asset based 3PL providers, as the term suggests, own their own hard assets such as trucks and warehouses and have their own pool of employees. Management based 3PL providers utilize the assets of other companies when providing technical or managerial logistics. Lastly, integrated providers can be either asset or management based in supplying needed services.

Gather the Right Information when You Compare 3PL Providers

Begin by requesting a detailed listing of all logistics services the company provides. This is referred to as the RFI (request for information) or the RFQ (quotation). You also need to request all locations and facilities which will be associated with a potential agreement. Last you will want to request information about current numbers of deliveries and volumes, as well as the warehouse measurements.

After gathering the information, compare 3PL providers according to your needs, making sure the provider has the technology and expertise required. Inquire as to whether all providers are on a strong financial footing. Can they offer flexibility should your customer demand change? Don’t omit checking into references as well as the cost as you compare 3PL providers.

Comparison of 3 Leading 3PL Providers

When you compare 3PL providers globally, you will find that European countries are the dominant force. However, there are U.S. based 3PL providers on the list of 25 global leaders in the industry, according to Inbound Logistics and Supply Brain Chain.

C.H. Robinson Worldwide Tops the List as you Compare 3PL Providers

This company serves North America, Europe and Brazil and boasts $3.6 billion in revenues. Their 3PL assets include: 100 warehouses and crossdocking partners and over 4,000 employees. The company offers transportation and warehouse management services. The company is also known for offering highly customized logistics for its clients. Three key customers include AOL, Walmart, and Best Buy.

Ryder is a Top Contender as you Compare 3PL Providers

Ryder has the strongest logistics brand recognition in the United States. The company earns $1.9 billion in annual revenues working exclusively in North America. Current 3PL assets include 184 warehouses, nearly 50,000 tractors, and close to as many trailers, along with 165,000 employees. The company provides transportation and warehouse management services. Three key customers are General Motors, Philips Consumer Electronics, and Daimler Chrysler.

Compare 3PL Providers and Pay Attention to Menlo Worldwide

Menlo worldwide serves the Americas, Asia and Europe to produce $3.1billion in revenue. The company provides transportation, warehouse and distribution management. The company’s strength lies in integration of order and transportation management. They are particularly recognized for load consolidation through their website in order to increase profitability for clients working with less than full truckloads (LTL). Three key customers include IBM, Nike, and Dow Chemical.

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