Transitioning to a New Third-Party Logistics Provider for Ecommerce Fulfillment

How to Transition to a New 3PL Provider for Ecommerce Fulfillment

This year’s peak season exhausted supply chain infrastructure, technology, customer support, and its workforce like never before.

Exponential ecommerce adoption brought on a tidal wave of products and packages that surged through logistics networks, exposing inefficiencies in its wake.

Merchants are now emerging from the ecommerce-induced rubble to bring their operations back to equilibrium, and for many, this means finally devoting the time and energy needed to part ways with their current third-party logistics provider (3PL) and seek a new partnership for ecommerce direct-to-consumer fulfillment.

If any of these were an issue, you’re likely already in the market for a new 3PL partner.

3PL Partner Pain Point Checklist

• Timely receipt of inbound products: Congestion throughout freight and transportation networks affected your fulfillment facilities’ inbounding and ability to make inventory available in a timely manner.
• Inventory accuracy: Your systems struggled to accurately communicate inventory statuses and availability for sales, causing backorders, partial shipments, and order cancellations.
• Same-Day Fulfillment: The influx of ecommerce direct-to-consumer volumes and lack of labor resources made same-day fulfillment challenging.
• Account Management: Getting issues resolved and timely communication from your 3PL support team made it difficult to provide great service to your customers.

Now that it’s clear that you need a new 3PL partner, what does that process look like? Here is a 3 step-by-step guide to help shippers get their house in order and execute a successful transition.

Step 1: Create Your 3PL “Wishlist”

The first step is to document all your pain points to create a wish list for your new 3PL partner. You are likely carrying over frustrations from recent Q4 inefficiencies – insufficient staff, siloed technology, poorly defined service level agreements (SLAs) – so documenting these issues and clearly laying them out for your partner will help ensure history will not repeat itself.

This will serve as your checks and balances to begin your transition to a new 3PL provider for ecommerce fulfillment.

Step 2: Open Clear Lines of Communication with Your New Partner

Next, you must begin to have meaningful conversations to express your expectations around your wish list. A few questions to help maintain clear, concise lines of communication with your new 3PL partner may be:

• What is your contingency plan for staffing?
• What is your employee retention rate?
• What are your contractual SLAs for inbounding, inventory, returns, etc., and what happens if they aren’t met?
• How is your technology stack integrated?
• How do I escalate issues?

Your new 3PL partner should have a dedicated account management team that can quickly define and point you to who is responsible for each aspect of your program should an issue arise.

This team will also be paramount when it comes time to onboard your new partner.

Step 3: Give Your New 3PL Provider a Seat at the Table

Once you’ve defined what success looks like for your operation and communicated this with your new partner, initiating the actual transition requires a specific mindset and approach.

The mentality that the transition needs to be treated as its own process and requires a dedicated onboarding team with professional project management is essential.

Regardless of your relationship with your prior 3PL, treating your new provider like a strategic partner and not a commodity will yield the greatest success.

Having your new partner sit down with your leadership team to understand the nuances of your business – like your promotional calendar – will ensure operational alignment right out of the gate and mitigate the potential for costly downtime.

While there are countless intricacies (and certainly more than three steps) involved in transitioning to a new 3PL provider for ecommerce fulfillment, these steps can help guide your business’s framework and overall approach to ensure a seamless transfer.

If your ecommerce business is looking for a partner that can support your operation through its evolution, visit our Ecommerce & Fulfillment solutions.

About the Author

Dan Coll is Kenco Logistic's Vice President, Ecommerce Fulfillment. Coll’s ecommerce supply chain experience spans 20 years. He is known for his unwavering commitment to deliver exceptional service and value to his customers. His most recent role was leading the strategy, execution, and launch of FedEx Fulfillment, the newly introduced ecommerce fulfillment initiative for FedEx. Prior to joining FedEx Supply Chain (via the GENCO acquisition), Coll was the founder and President of Rapid Fulfillment, a supply chain company that delivered ecommerce fulfillment solutions for emerging brands and the Fortune 100. He studied business with a concentration in marketing at the University of Pittsburgh and the American College of Dublin in Ireland.

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