3PLs face moment of truth: Part II

What do shippers need to do when evaluating the best 3PL? That question and others will be addressed at the 3PL Value Creation North America Summit 2018 in Chicago this October.

Ravi Dosanjh, A&A’s Executive Vice President – International Advisory, maintains that shippers should have a firm strategy in place supporting Best in Class “Total Cost” Planning, Procurement and Operations teams as well as their stakeholders should be aligned on what that means to the enterprise and what the best ways are to execute as a group supported by each category.

“Once these strategies are adopted, shippers should understand the strategies as well as what drives the behaviors of their 3PL base,” he says. “Many 3PLs have unique offerings based on their own strategies and have different targets and capabilities. Leveraging these capabilities effectively will drive high performing supply chains.”

He adds that shippers should also look at segment 3PLs based on capability and need while trying to avoid a one size fits all approach. Depending on the supply chain, the use of multiple 3PL’s with specific deep competencies can drive real value.

“If the shipper is constrained by resources and unable to manage a broad number of suppliers effectively, they can also consider a LLP or 4PL model to support this,” he says.

According to Dosanjh, shippers should also look at some of the peripheral data relating to 3PL support functions and transition capabilities. Many shippers have rotation programs where there is a need for 3PLs to support being plugged in and/or out efficiently. Having these capabilities will support all parties. “In conclusion, shippers should look at the 3PLs spend and relationships with their providers to assess the 3PL’s ability to leverage and control their providers when things change and the respective markets start tightening,” he says. “A 3PLs ability to navigate choppy waters in times of need can mean the difference between meeting or missing important deliverables.”