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.
image
By Patrick Burnson, Executive Editor
November 01, 2012 - LM Editorial

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

The Department of Commerce reported that January retail sales were up 0.2 percent compared to December and up 3.7 percent annually at $449.9 billion, and the NRF reported that January retail sales, which exclude automobiles, gas stations, and restaurants, rose 0.6 percent over December and 1.4 percent compared to January 2015.

On the freight shipments side, Cass reported that January shipments––at 1.025––trailed December by 1.3 percent and January 2016 by 0.2 percent. These declines were less than the 4.9 percent drop from November to December, though, and January shipments still topped the 1.0 mark for the 65th straight month in December.

The Department of Transportation’s Bureau of Transportation Statistics (BTS) reported this week that its Freight Transportation Services Index (TSI) saw a 0.4 percent decline from November to December, its second straight decline on the heels of a 1.0 percent decrease from October to November.

Carloads saw a 11.7 percent annual decline at 241,680, and intermodal containers and trailers rose 10.5 percent to 262,830

An amendment to the International Maritime Organization’s Safety of Life at Sea convention will go into effect requiring all shippers (importers and exporters) to certify and submit the Verified Gross Mass – the combined weight of the cargo and the container – to the steamship line and terminal operator in advance of loading the container aboard a vessel.

Comments

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


© Copyright 2016 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA