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23 Questions To Ask When Interviewing 3PL Companies
Choosing or changing your third-party logistics (3PL) provider is one of the most important decisions you will make as a shipper. After all, outsourcing your shipping to a 3PL can help you save money and tackle the challenges that are most common in the shipping industry.
But understanding what 3PL companies actually do and how they differ from one another can be confusing for small-to-medium-sized businesses (SMBs). That’s why it’s important to interview a prospective logistics service provider and ask lots of questions. Knowing which questions to ask is key.
Worldwide Express is a leading 3PL helping SMBs navigate the sometimes-difficult freight and parcel shipping industry. Below, we list the questions you should ask 3PL companies and why each is important.
Questions To Ask About the History of 3PL Success
Every industry is filled with fly-by-night companies looking to make a buck. Make sure your 3PL company has a proven track record of industry success and provides concrete examples that show it. Numbers are important (years in business, number of services) but are often meaningless without context. A logistics provider should tell you how they’ve grown through the years and helped customers grow as well. Be sure to ask follow-up questions and inquire about industry awards that point to recognition of shipping excellence. You can check out Worldwide Express industry awards here.
The innovation we sometimes see in startup culture is important. But do you really want to bet your company’s future on unproven logistics services? Ask about current customers and request case studies that indicate customer success. Most important, make it clear you would like to speak to a current customer. Sure, they will undoubtedly point you in the direction of a happy and successful one. But at least you’ll know one exists and the interaction will allow you to ask them questions. Read stories about successful Worldwide Express customers.
You most likely have been approached by many companies asking whether you’re interested in outsourcing your shipping to a third-party logistics provider. That’s why it’s important to ask about differentiators and why they are unique. In fact, ask them to name a well-known competitor and explain the differences. Also, listen closely for terms like "freight broker" and "3PL" when they are explaining their business model. A broker works as a go-between in shipping arrangements between carriers and shippers when your needs are infrequent. A top-notch 3PL provides everything a freight broker does, plus negotiated rates, longer-term partnership, technology, a wide range of freight and parcel services and much more.
No one wants to constantly switch 3PL companies. It’s a hassle. Ask about investments, future goals, mentions in the media and why they think they will be around in the long-term. If you’ve read something troubling about them, bring it up. They should be transparent about it, otherwise they may be hiding something.
Questions To Ask About Their Carrier Network
An industry-leading 3PL company should give you choices regarding carrier selection. That’s why it’s important to pick one that has a strong network of carrier partners. For context, Worldwide Express has a network of more than 85,000 full truckload (FTL) and 75+ less-than-truckload (LTL) carriers it works with to ensure you get top rates and space on trucks when capacity is tight. Additionally, Worldwide Express is part of the largest non-retail authorized reseller of UPS® in the nation. What does that mean? This partnership allows us to provide logistics services and solutions at discounted rates from UPS — the parcel carrier with the best on-time delivery rate in the industry. Most 3PLs focus only on freight solutions. So, it’s super convenient to find one that provides expertise in both parcel and freight shipping. Worldwide Express has a world-class carrier network. Learn more about it here.
Any logistics provider can amass a large network of carriers for freight and parcel services. But are the carriers trustworthy? Ask the 3PL company about the vetting process and how they select carriers. They should provide information about background checks, technology requirements and customer support expectations. Just as important, they should be able to tell you how they monitor carrier success for the long-term, and what happens when carriers fail to deliver — literally and figuratively. See how Worldwide Express vets its carriers.
Shipping is more complex than loading boxes or pallets on a truck. That’s particularly true when you need special equipment for special shipments. For example, when outsourcing third-party logistics, look for companies that can provide you with flatbed, dry van, partial and refrigerated services, among others. Ask the 3PL company about trucking equipment and request a list of solutions that you may require now or in the future.
Questions To Ask About Shipping Services and Solutions
First, ask them if they consider you a customer or if they see the relationship as a partnership. We certainly see ourselves as a partner. Then ask about their suite of freight solutions. There are common ones like FTL and LTL freight shipping services. But they should also offer and speak with authority about hazmat, tradeshow, refrigerated, white glove and other specialty services.
Here’s a good test during your interview. Ask the logistics service provider if there is any case where standard shipping can get packages to their destination as quickly as expedited shipping. It can, BTW, if you understand shipping zones. Overall, 3PLs should be able to speak broadly and in-depth about parcel services that make your job easier. Worldwide Express often helps customers implement services like UPS SurePost®, UPS Hundredweight Service® and other parcel solutions that can benefit them. Other 3PLs should be able to speak to their parcel strengths as well.
In an increasingly global economy, it’s important that you have options to help you ship internationally. In fact, exporters are less likely to go out of business than non-exporters, according to the U.S. Chamber of Commerce. Your 3PL company must help you with this growth and offer international shipping options to help you reach a global audience.
Every logistics services company should offer reverse logistics. This is the process of gaining the most value out of returned products depending on the stage or condition they are in. Options include reintroducing them into the market or reselling/recycling valuable parts. This is absolutely necessary for growing shippers, particularly in an age when consumer demand is rising (which means more returns) and environmental awareness is often expected.
Questions To Ask About Shipping Technology
A truck may be the symbolic image of the shipping industry. But trucks don’t get far without effective technology. That’s why 3PLs like Worldwide Express should offer technology solutions that make your job easier and automate tasks for reliability and consistency. Ask the logistics service provider for a demo of their technology solutions and press them on how reliable they are and what solutions they provide
Along with industry expertise, a transportation management system (TMS) is the bedrock of any successful shipping operation. A good TMS can do a lot for you. It allows you to select carriers, choose insurance, create bills of lading (BOLs), generate shipping labels, resolve shipping issues, get quotes, set up email notifications and create customized reports, among many other tasks. A great TMS, like SpeedShip from Worldwide Express, allows you to accomplish those tasks for both freight and parcel — with one login and platform.
Aside from a transportation management system, 3PLs should offer additional resources that make your job easier. That includes carrier maps, freight density calculators, FAQs, guides to accessorial fees, tracking solutions and other services. These allow you to add yet another layer of sophistication to your shipping operations for greater efficiency and cost savings.
In a competitive e-commerce shipping world, small package shippers need to find solutions to stay ahead. For example, through Worldwide Express and UPS, shippers get dependable, lower rates typically reserved for larger shippers and discounts on lightweight parcel shipping to U.S. and international residential addresses. Worldwide Express also provides you with e-commerce technology solutions and helps you avoid unnecessary fees and surcharges that often plague parcel shippers. Your logistics services provider should provide these, too.
It’s ok if you like your shipping enterprise resource planning (ERP) platform, particularly if it’s performing well. A 3PL shipping partner should be able to connect most common ERPs to their TMS through an application programming interface (API). This allows information to flow freely and accurately between platforms, so you can conduct worry-free business.
We can’t speak for all 3PLs, but Worldwide Express provides innovative technology AND supports you with resources after implementation. That includes training, maintenance, updates and ongoing support to your team for any technology issues or disruptions. Not all 3PL companies operate this way. So, it’s important for you to consider how much you value both short-term and long-term technology support and to what degree you need it.
Questions To Ask About Customer and Logistics Support
All shippers will experience challenges both large and small at some point. Top 3PL companies should be there for you and provide ongoing support in the short- and- long-term. That includes providing solutions for common challenges like unexpected accessorial fess and claims processing, more worrisome issues such as lost shipments, major delays and billing/invoice discrepancies. If a logistics service provider really considers itself your partner, then your challenges become their problems and they should respond accordingly.
Superior customer support is only valuable if it’s available when you need it. Ask 3PL shipping companies when support is available — days, nights, weekends, holidays — and look for one that offers the dedicated support that you require. As you know, shipping challenges can happen at any time and keeping your customers happy means resolving issues outside the typical 9-5 workday.
At Worldwide Express, customers are assigned an account team. That includes an account executive, logistics coordinator, carrier sales representative and driver services specialist. Each member of the team is an expert in what they do and completely committed to your business. When outsourcing third party logistics, you will find few companies that offer this extensive coverage. So, you’ll have to judge how important that level of dedication is to your company.
A top 3PL provider should be there for their customers when things go wrong. But they should also provide solutions that prevent things from going wrong in the first place. That’s why it’s important that you select a logistics service provider that positions themselves as a partner. In other words, a company that provides long- and- short-term solutions regarding strategy to make sure you are setting yourself up for success and can pivot when adjustments are needed.
3PL companies don’t stay around too long if they’re not up-to-date and have their finger on the pulse of the shipping industry. Off the top of their head, they should be able to name current trends, along with yearly challenges like peak season and hurricane disruptions. They should also understand governmental regulations, labor shortages, capacity issues and other issues — and what that means for you!
As a final question, ask the 3PL to summarize. A logistics provider should be able to give you a 30-second elevator pitch without hesitation. More importantly, they should be able to address the questions you asked and present a personalized response on how they can solve your unique challenges with tailor-made solutions.
Outsourcing third party logistics? Worldwide Express is a top 3PL shipping provider!
At Worldwide Express, we've spent more than 30 years handling logistics for tens of thousands of businesses like yours all over the country. We specialize in helping small and medium-sized companies get the most out of their shipping experience. And we do that through our unmatched combination of carrier relationships, industry expertise, sophisticated technology, unbeatable rates and personalized service.
Learn more about our innovative solutions, whether you are a first-time 3PL customer or looking to switch your logistics service provider. Schedule a complimentary, custom shipping consultation with our experts today!