The Key Factors to Consider When Choosing Third Party Logistics Provider

Written by Subramanian Venkatesh, DLM

Choosing the right third-party logistics (3PL) provider can be challenging. In today’s business environment, the sector is becoming increasingly innovative and fast-paced, and thus the challenge of finding a perfect match is harder than ever before.

When it comes to efficiency and cost-effectiveness in road transportation management it is absolutely crucial that a company works with a trustworthy 3PL. Understanding the potential value of a 3PL early in the process is crucial to saving money and providing great service.

Roles of a Third-Party Logistics (3PL) Provider

A 3PL, also sometimes known as a TPL, is a third-party logistics provider. A 3PL helps an organization by providing expertise and best practices that can effectively integrate into its existing supply chain.
3PLs can specialize in various logistical areas and geographic regions. The diagram below shows the various areas provided by 3PL.

Various areas provided by 3PL

The diagram above shows the various areas provided by 3PL.

Selecting the Right 3PL

Choosing a 3PL can be challenging because there are so many factors involved in making sure that a company selects the right one before beginning to work together. Hard data should be the deciding factor in any new 3PL relationship. Any company that plans to provide freight services should be able to indicate the specific ways in which the client company stands to save money.

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About the Author: Subramanian Venkatesh has substantive years of experience in the Oil & Gas industry, and has developed a special interest in transportation logistics and delivery solutions. He is a member of the Singapore Institute of Purchasing and Materials Management (SIPMM). He is currently completing a course on Diploma in Logistics Management (DLM) at SIPMM Academy.