As a business expands and matures, so too does the complexity of its logistics requirements. For companies that rely on third-party logistics (3PL) providers to manage their warehousing, distribution, and transportation needs, it’s not uncommon to discover that their current provider is no longer capable of meeting their evolving demands. Indeed, there are several indicators that suggest it may be time to reconsider your 3PL partnership. Here, we outline five of the most prevalent signals that it’s time to explore other options.
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5 Signs It’s Time to Switch Your Third-Party Logistics Provider
1) Poor 3pl service levels
Let’s face it, when it comes to logistics, service levels are everything. According to a recent study, nearly 80% of companies cited service level as the most important factor when selecting a 3PL provider. So, if your current provider is consistently falling short of your expectations, it’s time to start exploring other options. Late deliveries, inaccurate inventory counts, and poor communication are all tell-tale signs that your current provider may not be up to the task.
Late or delayed deliveries will result in lost sales and unhappy customers. As well inaccurate or incomplete orders will lead to customer complaints. Your need efficiency and professional logistics operations that are flexible and will cater to your specific needs with 3PL account management, convenient cloud fulfilment technology, custom packaging and more.
If your 3PL is unable to make the necessary adjustments for your business, it’s time to cut ties and find a new partner who can deliver the level of service your business deserves. After all, in today’s fast-paced business environment, time is money, and your logistics operations simply can’t afford to be held back by subpar service levels.
2) Fulfilment centre stock limits and growing pains
Ah, the joys of growing pains. As your business blossoms, you may start to notice that your current 3PL simply can’t keep up with the sheer volume of your logistics needs. Maybe they’re running out of warehouse space to store your ever-expanding inventory, or perhaps they don’t have enough personnel to keep excess stock flowing smoothly. Whatever the case may be, if you find yourself consistently hitting capacity limits & storage hiccups, it’s a sign that it’s time to start scouting for a provider that can scale with you. After all, you don’t want to be held back by a provider who can’t keep up with your growth trajectory.
A recent survey by Supply Chain Dive found that 84% of shippers believe that a 3PL’s ability to scale with their business is a critical factor in selecting a provider. So, don’t let capacity constraints hold you back from achieving your full potential. Find a provider who can grow with you and watch your business soar to new heights.
3) Lack of logistics experience
In the world of logistics, specialisation is key. Every business has unique logistics requirements and finding a third-party logistics (3PL) provider that has the necessary expertise to handle those needs is essential. Unfortunately, if you’re in a specialised industry or have unique logistics requirements, you may discover that your current provider simply doesn’t have the knowledge or experience to get the job done right. This can be a frightening realisation, as logistics mistakes can have disastrous consequences for your business. Perhaps they’re not familiar with efficient warehouse storage practices, the FIFO method, or they consistently ship the wrong products, etc.
A survey by DHL found that logistics errors cost companies an average of £310,000 per year. That’s not chump change. By partnering with a provider who is familiar with your industry and your unique logistics requirements, you can ensure that your business operations run smoothly and efficiently, without any costly errors along the way. Whether it’s homewares fulfilment, health and wellness fulfilment, or beauty fulfilment – do your due diligence to determine if your 3PL is already familiar with your industry.
4) Price concerns for your 3pl services
When it comes to logistics, the cost is undoubtedly a crucial factor in selecting your 3pl. If your 3pl isn’t saving you time and money and your ROI just isn’t clearly in sight anymore – it may be time to make the shift.
It’s not just the direct cost of services that should be considered – such as warehouse storage, picking and packing, and shipping. Depending on the 3pl provider you use, there could be administration fees, and annual fees. There may be other numerous hidden costs associated with logistics such as delays, inventory carrying costs, and damages, that can add up quickly and have a significant impact on your bottom line.
So, if you’re consistently going over budget or find that your 3PL provider’s rates are no longer competitive, it’s time to take a closer look at your logistics costs. Are you experiencing delays that are causing additional expenses? Are you carrying excess inventory that’s driving up your carrying costs? Are your goods arriving damaged due to poor handling practices? These are all factors that should be considered when evaluating the true cost of your logistics operations.
By working with a provider that offers transparent pricing and has a proven track record of minimising hidden logistics costs, you can ensure that you’re getting the most value for your investment. Don’t let hidden logistics costs eat away at your profits. Take the time to evaluate your current provider’s pricing and explore other options that can provide a more cost-effective solution for your logistics needs.
5) Communication breakdowns around your fulfilment needs
Finally, if you’re consistently experiencing communication breakdowns with your 3PL provider, it’s time to start looking for a new one. Good communication is essential for any successful logistics partnership, and if you’re not able to communicate effectively with your provider, you’re likely to experience a variety of issues down the line. What are their hours of operation for example and is there enough flexibility to reach them outside normal business hours?
At Selazar, we have customer service available until 10pm. Our esteemed clients are assigned a dedicated account manager who not only maintain a professional rapport but also cultivates a personalised relationship. This approach ensures a high degree of consistency and reliability in our service delivery. Account managers help our clients from A – Z, such as setting up your online portal to onboarding your stock in one of our fulfilment centres, to replenishment, returns and more. This is how a great 3PL creates clear communication and strong relationships.
Is it time to switch your third-party logistics provider?
In summary, choosing to switch your third-party logistics provider is no small feat, but it’s often the key to maintaining the seamless flow of your logistics operations. By heeding the five tell-tale signs discussed earlier, you can steer clear of suboptimal service and opt for a more promising 3PL partner. Be sure to dedicate ample time to scrutinise potential providers, as making a well-informed decision can make all the difference in driving your business towards success. Remember, it’s not just about finding any 3PL provider, it’s about finding the right one that aligns with your business needs and goals. Contact us today if you want to make the switch from your current 3PL provider.