We’ve made it through another year! Hopefully, you and yours (including your fantastic team) enjoyed a little extra downtime over the holidays. And now you are jumping into the new year feeling refreshed and excited about what’s to come. We also hope you took some time to celebrate your successes as well as look at what you learned. As you review your business, it’s a good time to reassess partnerships. That includes logistics partners. How did your 3PL do? Are you delighted? Or is it time to reassess your 3PL and perhaps switch?
Start by reflecting on the insights from last year (and previous years) to delve into your overall satisfaction level. Perhaps your initial thoughts are, “Well, if it ain’t broke… but there are definitely areas that could be improved.” Or, the relationship may have worked well in the past, but due to changes in your business or industry (or upcoming trends), it no longer fits as well as it once did.
Once a year, it’s important to take a deep dive to truly evaluate how much your partnerships are serving you and your business.
3PL Evolution and Its Impacts
Over the past few years, the 3PL industry has witnessed significant changes, many of which have been explored in this blog. For example, we’ve covered:
- The Ecommerce Boom
- New Payment Options
- Changing Economic Incentives
- New FDA Regulations
- Subscription Services
- Peak Season Surcharges
- Direct Selling Support
- Fulfillment Automation
- And much more!
We’ve seen technological advancements, changing customer preferences, and global supply chain disruptions, which have redefined logistics. The integration of AI and machine learning to analyze past behavior and predict future actions has been a game-changer for many industries.
As businesses evolve, it’s even more important to reassess your 3PL and its ability to adapt and help you thrive in this dynamic environment.
Creating Your Criteria to Assess Your 3PL Provider
After examining what’s changed within your business and industry, it’s time to assess your 3PL and other partnerships. Some of the criteria to consider:
- Technology—have they continued to update and make improvements to integrations, analytics, processes, and infrastructure? Do they provide real-time data to help you make decisions immediately?
- Relationships—do you have a positive, transparent relationship with your 3PL? Are they easy to communicate with? Do you have a dedicated account manager who can answer questions and provide guidance?
- Scalability—is your 3PL able to grow with you? Can the team handle greater volume or changes to the market?
- Values—does your 3PL align with your values, such as integrity, honesty, trust, accountability, sustainability, customer relationships and commitment, constant improvement, and teamwork? Does this go beyond their mission statement to be effectively communicated and lived throughout the company? Values can have a real effect on your bottom line. A recent report from Supply Chain Dive, for instance, found that companies that prioritize sustainability and can communicate that well to their customers enjoy increased brand reputation and customer loyalty.
- Adaptability—is your 3PL able to seamlessly adapt to market changes, environmental changes (such as shifting from one warehouse to another due to severe weather patterns), and business growth?
Watch for Red Flags
There are times when the writing is on the wall, and it’s easy to tell it’s time to go. Some clear red flags to watch for include:
- Consistent delays in shipping or receiving
- Poor (or worse, nonexistent) communication
- Lack of transparency in business operations, billing, and analytics
- Inability to scale as your business grows
- Frequent errors in order fulfillment and inventory management.
If you’ve experienced any of these issues, it’s likely time to consider partnering with a new 3PL.
Should I Stay or Should I Go?
Once you’ve taken a deep dive, you may be thrilled to discover your 3PL partnership is strong, healthy, and provides a win-win solution for everyone involved. Or, you may find there are some tweaks you could make to improve, and your current partner is ready and able to adjust. Or, you may find that it’s probably past time to go.
Before making the final decision, though, it’s worth putting pencil to paper to look at the financial impact. What does your current 3PL relationship cost compared to moving to a new one?
Don’t, however, just consider the immediate costs. For instance, you may be with a lower-cost provider now. But looking into the future, that decreased price could cost you a lot more. For example, if you improve efficiencies, reduce postage costs, and skyrocket customer satisfaction (due to improved time to home, increased order accuracy, etc.), the long-term financial implications could be the difference between your business thriving and your business barely getting by.
If you do make the switch to a new 3PL, you’ll want to ensure it stands the test of time. Make sure you’re on the same page with:
- Transparent communication
- Regular performance evaluations
- Setting shared goals
- And, emphasizing customer experience as exceptional service directly influences customer loyalty, brand reputation, and future growth.
The Process of Switching Your 3PL
One reason people stay in relationships (both personal and professional) is because of the fear of change. Maybe things aren’t all that great, but how do you know they’ll be better somewhere else? Finding a new provider and transitioning your business can be overwhelming.
We’re here to help guide you through that process as well. Simply asking the right questions can help ensure a potential provider can meet your goals, capabilities, and priorities.
As your industry and business evolve, you must regularly evaluate your partnerships and providers to stay efficient and competitive. Whether you are dealing with small annoyances or red flag warnings, QuickBox is here to help you take your fulfillment service to the next level. Contact Us Today to see how we can help.