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3PL Outsourcing

There may not be a more important decision for your business than your choice of third party logistics provider. If you have decided to outsource your warehousing and transport operations then you are putting a critical business function in the hands of another business. Once you have moved in, it is a costly and disruptive exercise to move out if you do not get the service level you expected.

So, it is worth putting some effort into making a quality decision. It’s also worth hiring a professional who understands the 3PL market to guide you through a formal Request For Proposal/Quote (RFP or RFQ) process to help you make an objective decision based on the best information available from the current options available in the market.

Semi Truck in the loading zone of the warehouse

Why Use a consultant to run your 3PL RFP?

  1. The time taken to run the process may be considerable and distracts focus from operational management.
  2. Expertise in researching and assessing suitable service providers and their responses may not be available in house.
  3. Many businesses wish to remain anonymous to prevent their current providers or competitors becoming aware of their intent or consideration of other options.
  4. Real or perceived bias may affect the RFP process and an independent search and decision making process is required.
  5. The risk of too narrow a search. Selecting from too narrow a range of service providers can significantly compromise the results.
  6. Small cost for a quality decision. Compared to the typical annual cost of freight and warehousing services the cost of the RFQ is small and savings from a quality decision will pay for the RFQ many times over.

Choosing the wrong 3PL can severely damage your reputation

The 3PL RFP project will ensure you make the most effective decision possible for your next logistics provider. We do a market search for suitable logistics providers with demonstrated expertise in doing similar work for other businesses and that have the capacity and willingness to bid on the work. This process alone sorts out the vendors that are committed to the work vs the uncommitted. There is nothing worse than an uncommitted 3PL.

We prepare a data table of your warehouse and freight activity so that the pricing of the responses are as accurate and comparable to each other as possible. We also document your essential business processes and requirements so that the 3PL understand what is required of them and they make a fully informed decision to respond to the RFP.

We then run the RFP and respond to any questions and make sure that we get a quality response from interested and committed bidders. We collate the information and present this to you along with a rating table that allows you to make a reasoned decision on a shortlist. We recommend visiting the proposed sites of the shortlisted 3PLs and running reference checks to confirm a final decision. Once the decision is made there will usually be a legal vetting of the contract before signing a deal.

How It Works

3PL RFP Process

Implementation

Once you have selected your new 3PL logistics provider you may also need some help with the transition if you don’t have the resources or focus to manage this process. We can help a lot or a little depending on what you need. We are with you all the way to make sure the vision is realised and you get the result you were expecting.

key benefits

CERTAINTY

Following a formal search and decision process based on quantitative and qualitative data will give you confidence that you are making the best possible decision.

CLARITY

Getting an outside perspective from an industry expert who understands both your business and the market can help you avoid the pitfalls of a bad decision.

ANONYMITY

Running an anonymous RFP can be essential in the context of sensitive business relationships or when you don’t want the market to know you are looking around.

RESOURCE CONSTRAINTS

Running a 3PL RFP can be a time consuming and difficult process when it’s not in your core skill set. It make sense to get help so you can focus on what you do best.

How long does a 3PL RFP take?

It usually takes one to two weeks to prepare the RFP response template and source a list of capable 3PL logistics vendors. 3PL response time allowance is usually to to four weeks. Presentation of findings, shortlist, site visits and final selection will be two to three weeks. Final legal sign off depends on your legal team and the contract vetting process but allow another couple of weeks (at least!) for that. If you are under business pressure and need to expedite the process (which is not ideal) then we will work with you and the 3PL respondents to complete the process as quickly as possible.

Is it expensive?

Not compared to the cost of a bad decision.

What is the typical contract term for a 3PL?

This can vary widely depending on the business context. Most 3PLs will prefer a two to five year contract so that they have certainty and can invest appropriately in performing your work to the standard you expect. They may accept a shorter term or month to month contract but short term deals put both parties at risk and are not recommended.

How do I minimise risk when selecting a 3PL?

Our 3PL selection process is designed to minimise the risk of a bad decision. Outsourcing goes wrong when one or the other party makes an uninformed decision they later regret. All the SLAs in the world are no good to you when they cannot be met because the 3PL underbid on a vaguely specified business and volume model that they can not support at that price. Mismatched expectations are a disaster for both parties and our process is designed to eliminate that risk.

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