Choosing a 3PL provider is a critical decision that directly impacts your supply chain’s performance. With countless third-party logistics partners available, it’s important to look beyond basic capabilities. Successful logistics outsourcing relies on selecting a partner with the right people, systems, and adaptability to grow with your business. Here are 6 essential traits to look for during your 3PL selection process for long-term success.
1. Human Resources & Leadership: The People Behind the Partnership
Let’s face it, without the right people there’s nothing else to talk about. The right seasoned leaders and team can, oops strike that, WILL make or break the business relationship.
But it’s not enough to simply be good, they need to be professionals in all things good and bad. They have to be able to admit mistakes and offer solutions. They need to establish connections with your staff to insure communications don’t break down. They have to be able to discuss issues without assigning blame. They have to lead the relationship and make their staff an extension of yours. They need to demonstrate they care.
Key Question: Can you trust your 3PL to build a better relationship and drive mutual business growth?
2. Stable Software Platform: Technology That Works
In today’s culture if you can’t tell the world what you’ve done it doesn’t count. For example if the outbound performance messages aren’t accurate and timely, it doesn’t matter how quickly they prepped and picked the order.
Questions to Ask Your 3PL
Prepared 3PLs will have ready answers to the following questions:
- Does you have an in-house team for customization or do you need to outsource the work?
- When is the last time you upgraded the system?
- When is the next scheduled upgrade?
- What’s your back-up plan?
- Do you have an on-site generator to handle power outages?
- Do you have on-site cell connections in case the land line or internet connection goes down?
Why It Matters
If reporting and dashboards aren’t tailored or reliable, you risk delays and costly fixes.
3. Flexibility: Adapting to Your Business Needs
Every supply chain faces seasonal shifts, SKU changes, and growth challenges. Your 3PL must be able to pivot.
Signs of a Flexible 3PL
- Regular SKU slotting reviews.
- Ability to scale staffing up/down quickly.
- Different handling strategies for peaks vs. average demand.
- Support for expansion within or beyond current facilities.
How often does your partner/provider look at SKU slotting?
- How do they handle seasonal shifts in volume and order profiles?
- Are they looking to split your orders by type and handle them differently?
- Will they handle peak periods differently than average?
- Can they staff up or down quickly as your needs change?
- Are they willing to try different options if their original plan doesn’t hit the required metrics?
How about your ability to grow your business within the four walls or out of them? Are there other facilities nearby in case you outgrow the current one? Have they performed in-house moves before?
4. Transparent Operations: Building Trust Through Openness
Secrets don’t help anyone and more to the point they sow distrust into everything.
What Transparency Looks Like
- Open floor access and honest communication.
- Willingness to share KPIs and staffing metrics.
- Owning up to mistakes before you even notice them
If your new partner/provider isn’t allowing you to access the floor to talk to the associates and see the operations first-hand during all phases, there’s something amiss. Let’s be honest and admit there probably aren’t any trade secrets involved in how they’re looking to process your business. We can all talk about proprietary issues but batch picking vs discreet or a Goods-to-Person vs a put-wall don’t really qualify. If they restrict your time on the floor or access to SOPs, won’t discuss individual KPIs or provide staffing metrics, then you should be very wary.
A recent client told me the best characteristic in the new 3PL I helped them find was the transparency they offered. He said they called him to let them know about a mistake they made before my client even knew it happened. They called to say we erred, we fixed it and we think we have something in place so it doesn’t happen again. That’s transparency, which is a synonym for honesty, ethics and caring about not just your business but about you and your ongoing relationship with them.
5. A History and a Future: Proven Experience & Innovation
Yes it is important to find a 3PL who has been there and done that. It’s important to find someone who has a stable history of shipping to your customers and handling a product just like yours. However, they also need a future. Your business and theirs was drastically different just 10 short years ago. The new reality is everyone ships eComm, Omni-Channel and Eaches are the standard. Even replenishment orders for the major department store chains are smaller as retailers want frequent shipments to the stores to maintain levels set by the merchandising team.
Your 3PL needs to be investing in not only their future but yours too. Are they still picking solely from static pallet rack with a few extra levels at the bottom? Alternatively, are they upgrading their facility to allow discreet pick and pass operations designed specifically for eCom/Omni orders? Most 3PLs today are looking to upgrade their manual mechanical systems to more automated ones. They’re looking to invest in their future by offering options that are multi-product capable. They’re looking to combat wage increase with automation thereby protecting themselves and you in the future.
6. Financial Stability: Protecting Both Businesses
Show me the money. That’s right, show me your balance sheet and your P&L. Show me that you’re financially stable and pay your bills. Show me your profit margins. I don’t mind that you make a profit, in fact I expect and hope you do, so don’t feel like you have to hide it.
Don’t you think the 3PL will also want to talk to your financial backer, your Private Equity group? The days of secrecy and denying margins, asking them to make money from everyone else except you are in the past. Both parties need to be healthy financially and you can actually help each other by cooperating.
It’s common practice today to have the ownership of both parties discuss the business directly. Another step in the open communication and transparency process that provides greater trust and partnership in support of the business models of both companies.
Partnering With the Right 3PL
If you’re considering moving towards the 3PL world or simply looking to create a better relationship with your existing provider, a trusted advisor with the history and experience of operating in both worlds can help broker difficult conversations and steering everyone towards a better future.
Our Team: The Avalon CSC Difference
At Avalon CSC, we use technology to drive businesses forward while supporting them throughout their digitization journey. We’re technology and AI enabled but people-led. When we say we walk the floor, we mean that we set ourselves apart with our team’s care, willingness to listen, and commitment to understanding your challenges firsthand.
We don’t just manage logistics. We build trust by delivering solutions and keeping communication open. Acting as an extension of your business, not just a vendor, we are proactive, accountable, and invested in your success.
