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The Definitive Third Party Logistics Checklist

A reputed Third Party Logistics or 3pl service could be just the answer your company has been looking for, but how do you determine what you need? Check out this definitive 3pl checklist below which will help you to find the ideal 3pl logistics partner for your business.

The most basic definition of third party logistics is that in this arrangement, a company works with shippers to manage their logistics needs, which include warehousing, freight bill auditing, forecasting and much more.

While outsourcing a company's whole supply chain may seem a bit scary, in reality, you can turn all of your focus to your core business while still staying connected to your supply chain with a third party logistics company. The idea is to find the right logistics company or companies to partner with you and create a system that is designed to give you the supply chain and logistics services that your business needs.

Southern California 3PL Types

Third party logistic companies in California and elsewhere are generally divided into two main categories: asset-based and non-asset based.

Asset-based usually includes the following:

Non-asset based often includes:

With all these services and company types, it can be difficult to tell which Los Angeles Third Party Logistics companies to hire to meet your needs. The following checklist can help you to identify the right companies for your business.

Check Warehouse Location

When you're investigating in warehouses, note the building sizes and the number of bay doors available to receive trailers and containers on a daily basis. Physical location is also important, and hence, the buildings close to railways, airports, ports and major highways are preferable. There should be enough available space and room left over for expansion.

You should also take a look at the product mix in the warehouse. Determine whether the products have the same busy season as yours, as that could put extra stress on the warehouse.

Evaluate All Equipment

Survey the available equipment types and their conditions. Are there enough pallet racks, conveyors, flow racks, scanning stations and packing tables? What about forklifts? Look at carton sealing machines, printers for labels, the postal and shipper services stations and scales, and any other specialized equipment you need.

Study the Staffing Situation

Your Los Angeles 3pl company will only run smooth when the staff is efficient enough. Hence, find out if the employees are tested for basic reading/writing skills and if they have received any sort of certification, such as Six Sigma, or not. Determine if the workers are temporary or permanent, whether background checks are done, and what the training/disciplinary procedures are. Don't forget to ask about the turnover rate. And remember, a high one signals problems.

Eye the IT

While the exact systems you'll need depend on your business, there are some key IT points you can look into to help protect your supply and delivery chains as outlined below:

Check Flexibility and Communication

You'll need a Southern California 3pl company that has the range of services you need and shift times that meet the requirements of your business. Ask what the lead times are for emergency or rush orders, and also find out if they have trusted suppliers or partners who can provide the services you need that they don't offer.

Communication can make or break a 3pl relationship, so make sure you know who is responsible for providing information and what the time frame is for it. Ask what communication methods are used, and note that written is always preferable. Determine what the chain of command is to solve problems if they arise.

Review Qualifications, Expectations and Pricing

Qualifications will vary by business, but you can ask how long the company has been operating and what qualifications their staff has. Ask to speak to existing customers to get an inside look at how the business operates, and find out whether they've ever handled products similar to yours.

On the performance expectations end, you can determine how customer service is handled, what they do about fuel surcharge increases, and the timetables for providing and getting information, receiving merchandise, and shipping your orders. You'll also want to ask about the expected volume of inbound and outbound merchandise; the estimated number of orders to be shipped on a daily, weekly and monthly basis; and how duties are divided internally.

Don't forget to look at compliance. Find out who is responsible for duties such as packaging, shipping and routing guidelines and who handles chargeback and the authorization of returned goods. You should also confirm that the business is in compliance with any and all federal, local and state laws. When it comes to pricing, make sure their structure is simple to check and understand and their invoices are formatted in a way that meets your needs. Get a comprehensive pricing quote that includes all services you might need, and review the payment terms in detail.