Subscribe to our free, weekly email newsletter!


Global Logistics: Optimizing 3PL partnerships

In today’s dynamic, global marketplace, shippers need to execute a checklist of essential action items in order to get the most out of their third-party logistics partnership.
By Patrick Burnson, Executive Editor
November 01, 2012

When examining best practices in managing third party logistics provider (3PL) relationships, leading consultants, analysts, and educators recognize that most logistics managers begin their search with one goal in mind: to reduce cost by leveraging outsourced expertise and technology.

Naturally, one assumes that top 3PL players will provide the basic services that are now in widespread demand to achieve these goals. For example, the best 3PLs use the latest tools such as Lean and Six Sigma concept and offer the latest in warehouse management systems (WMS) and transportation management systems (TMS). And, the big players have real-time tracking and event management systems with “shipper alerts” for delays.

Shippers also expect their 3PLs to have network optimization capability to enable them to select the optimal warehouse locations. And, of course, 3PLs are relied upon for global expertise, including regulatory compliance and documentation.

However, according to our expert sources, there’s more than meets the eye when it comes to managing and optimizing a 3PL relationship. According to J. Paul Dittmann, Ph.D., executive director of the Global Supply Chain Institute at the University of Tennessee, shippers also need their 3PL to take direction, respond rapidly, and generate ideas for improvement. 

“Shippers further expect their 3PLs to become a strategic partner in efficiently growing their business,” says Dittmann. “Today, aggressive, continuous improvement is a given.”

According to Dittman, industry surveys indicate that the most important factor in establishing a successful 3PL relationship is trust—fostered by good communications between the two parties. Third party logistics providers report that their greatest challenge is finding qualified people who are dedicated to learning the client’s business, and taking it to the next level.

However, in order to complete that journey, several steps must be initiated and executed. If a checklist has not yet been established, the time for creating one is now. Our experts have helped us create a list of three steps that they feel will go along way in helping shippers fully optimize their 3PL partnerships.

About the Author

image
Patrick Burnson
Executive Editor

Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

A number of key topics impacting the freight transportation and logistics marketplace were front and center at a panel at the Council of Supply Chain Management Annual Conference in San Antonio last week.

The relationships between third-party logistics (3PL) service providers and shippers are seeing ongoing developments due in large part to the continuing emergence and sophistication of omni-channel retailing. That was one of the key findings of The 19th Annual Third-Party Logistics Study, which was released by consultancy Capgemini Group, Penn State University, and Korn/Ferry International, a global talent advisory firm.

Optimism in the form of increasing profits was a key takeaway in the Annual Survey of Third-Party Logistics (3PL) CEOs, released earlier this week at the Council of Supply Chain Management Professionals (CSCMP) Annual Conference in San Antonio.

Seasonally-adjusted (SA) for-hire truck tonnage in August saw a 1.6 percent increase in August on the heels of a 1.5 percent increase in July. The August SA index––at 132.6 (2000=100)––stands as a new SA high, with November 2013’s 131.0 now the second best month recorded.

Carload volumes saw a 5 percent jump compared to the same week a year ago at 302,178, and intermodal volumes hit a new weekly U.S. record at 279,777 trailers and containers.

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA