Selecting a Third Party Logistics Provider

Part 2: The Top 10 Questions to Ask

By Angela Cox

What to Ask Potential 3PL Service Providers

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Q1: How long have they been in business/ years of experience?

2015 XXXX

Q2: Are they close to logistics hubs such as highways, ports or railways?

Q3: How large is the facility/ how much space is currently available?

* Verify they will have enough space during busy/ holiday seasons

Q4: What are the hours of operation?

What to ask potential 3PL service providers:

• Typical daily output during given business hours

• Maximum daily output at full capacity

• Productivity statistics

Q5: What type of products are typically stored in this facility?

Also ask your potential 3PL:

• Do they store similar products?

• What are their mixing rules?

• Have they worked with your

current customers?

Q6: What are the facility’s technology capabilities?

Does this facility have:

• RF

• EDI

• RFID

• Warehouse Management Software (WMS)

• Shipment Manifesting/ Routing Software

• Customizable Reporting

• Customizable Compliance Documents

• Conveyor System

• Integrated Scale

Q7: What services can they provide including value-add services?

Ensure your needs are met and all required services are available

• Kitting/Assembly

• Food Processing

• Custom Packaging

• Tempering

• Sampling

• Etc.

Q8: What security precautions are taken?

This is especially important for high value inventory

• Security cameras

• Armed and/or unarmed guards

• Information security protocols

Q9: Can they meet compliance requirements?

Each industry/ inventory type has a separate set of compliance

standards. Can the facility meet these compliance requirements?

• USDA/FDA/CFIA/EU and/or other governmental standards

• IARW

• LBMA Good Delivery

• HAZMAT

Q10: How is the pricing structure designed?

Each third party logistics provider has its own pricing strategy. This

can significantly affect the overall cost of doing business with them.

Negotiate an agreement that is mutually beneficial.

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