As third-party logistics providers (3PL) evolve to meet changes in the marketplace, partnering with the right one is critical to keeping supply chain operations on track. A seasoned 3PL can enhance your supply chain, stabilize pricing, improve the reputation of your organization, and properly manage the possible risk challenges in today’s market. In today's post, guest blogger John Ohnstad, Director of Business Development for CAI Logistics shares his thoughts on properly vetting and qualifying a 3PL to support your organization.
The role of a 3PL
A 3PL can take on many roles to support your organization, from moving freight and providing rate negotiation, to carrier qualification, auditing, and invoicing services, to timely reporting on your freight spend. Whichever roles you are looking for your 3PL to fulfill, it’s important to ask key questions about their services, operations, and terms and conditions.
To help you conduct due diligence and choose the perfect 3PL, here are some topics to guide your process.
How do you qualify carriers you partner with?
For any logistics company, it’s important to examine a carrier’s CSA (Compliance, Safety, Accountability) score, service references, financial references, and years of operation. This level of evaluation is critical to mitigate risk. If the 3PL you are considering does not have a process for qualifying and on-boarding carrier partners, this could put your supply chain at risk. While this component is essential in the carrier vetting process, it’s important to take the time to research the many factors that comprise your future logistics partner.
What are your payment terms to your carriers?
The way a 3PL pays its vendors demonstrates its commitment to them and ultimately to the shipping process. If a 3PL has a timely payment process, it becomes a competitive advantage when capacity constricts. After all, the carrier is more likely to give the load to the company that pays in 30 days as opposed to 90. A standard rule that we follow at CAI Logistics is paying carriers within 30 days of receipt of paperwork.
How do you handle communication with your carriers/drivers?
This is a key differentiator between “paper trading” brokers, and brokers who offer a true full-service experience. At CAI Logistics, we find that the most successful and consistent way to manage shipments to our customers is dispatching directly with the driver on the load before pickup and performing daily check calls throughout the journey to delivery.
Talk to us
At CAI Logistics, we practice transparency in all we do and communicate clearly to ensure that you are informed every step of the way. We also pride ourselves in providing our customers with excellent service and a seamless experience for any region or type of shipment. Our depth of experience in the industry helps us create reassuring contingency plans for our customers when needed, and our wide network of trusted carriers can be deployed quickly to meet needs as they arise or change. We’d love to talk about what we can do to support your organization. Contact us to learn more.
John Ohnstad has delivered supply chain solutions to logistics customers for over two decades. His experience spans dry van, refrigerated, flatbed, project cargo, and intermodal modes of transportation.