Both allow customers to order online for pickup at a store
or have their purchase delivered directly.
Furthermore, customization, subscription services, and
returns continuously vex e-commerce retailers. Requests
for customized last-mile deliveries are becoming increasingly common. Order transparency and visibility are expected
at all links in the supply chain. Certain industries require
traceability and other regulatory compliance measures.
All of these challenges are prompting organizations to
look outside their own pool of resources for service providers that can help them strategically optimize their supply
chains.
“In logistics, what used to be a game of scale and cost is
now a game of execution speed and agility to move smaller
orders faster,” notes John Haggerty, vice president of busi-
ness development at Burris Logistics. “Companies’ internal
operations are finding it challenging to attain the faster
execution rates they need to remain competitive in their
markets. So much so that many organizations are supple-
menting their own supply chains with 3PL partnerships.”
Indeed, research from Armstrong & Associates shows
that in 2018, the 3PL market grew by 15.8%. This figure
is inclusive of growth in the non–asset-based domestic
transportation management segment (freight brokerage)
of 20.7%; international transportation management (air
and ocean freight forwarding) of 15.4%; dedicated contract
carriage of 15.8%; and value-added warehousing and dis-
tribution of 8.0%.
For operations with complex handling and transportation needs such as these, choosing the right 3PL service
provider as a means to successfully and strategically manage some (or all) of these challenges can be the difference
between success and failure. Beyond a proven ability to
deliver higher rates of accuracy, efficiency, and productivity
as well as cost savings in distribution and transportation,
there are several key attributes to consider when evaluating
potential 3PL partners. They are as follows:
CAPACITY FOR FLEXIBLE COLLABORATION
It may seem obvious, but the most critical key to a successful outsourcing relationship is a willingness on the 3PL’s
part to work in harmony with its customers on an individual basis, says Burris Logistics’ Haggerty.
“The third-party service provider must continuously
communicate with the customer to understand their busi-
ness strategy and their key customer service objectives,” he
says, noting that cultural compatibility between the two
parties also contributes to a harmonious relationship. “To
achieve a true partnership, the ideal 3PL is an extension of
the businesses through people, technology, and processes—
not solely transactional.”
In addition to establishing a collaborative relationship,
the 3PL must also be dynamic and flexible in order to
support a relationship that constantly evolves with each
customer’s needs. That is, as a customer’s handling pro-
cesses, inventory, volumes, throughput, and other variables
change, so must the 3PL.
“There’s simply no place in the 3PL market anymore for
rigidity,” Haggerty continues. “The ideal service partner
for companies with complex challenges has to be able to
respond both flexibly and creatively to ensure the customer’s success.”
ROBUST INFORMATION TECHNOLOGY RESOURCES
Data exchange between customer and 3PL has evolved far
past end-of-day batch uploads via electronic data interchange (EDI). To truly establish and support a collaborative partnership with its customers, a 3PL must have a
robust information technology (IT) department capable of
leveraging, analyzing, managing, and sharing data in real
time. It should also have a highly configurable operating
platform that facilitates easy integration with each customer—regardless of their preferred application, says Burris
Logistics’ CIO, Ed Krupka.
“To meet that need for speed and throughput expected
by today’s consumers, a 3PL must be application-agnostic.
That means it can support large customers that use SAP
