Blog Posts Secrets to Successful Logistics Outsourcing

With ecommerce and the growing complexity of today’s supply chains, many companies are seeking the support of a third-party logistics provider (3PL). In fact, according to the 2023 Third-Party Logistics Study, 55% of shippers are increasing their use of outsourced logistics services.

If you are outsourcing, naturally you want to make the most of the relationship. Duane Sizemore, senior vice president of business development at Saddle Creek, recently sat down with Digital Commerce 360 to discuss key elements of a strong 3PL partnership.

Following is an excerpt from the “2023 Leading Vendors to the Top 1000 Retailers” report…

Driving a stronger relationship with your 3PL

What are some characteristics of a healthy relationship with a 3PL?
Retailers and brands are recognizing the need for more strategic, collaborative relationships with their 3PLs.

To provide effective solutions, a 3PL needs to have detailed knowledge of its client’s business, understand the goals and challenges and see how the business is changing and growing. In the most effective relationships, a 3PL has a seat at the strategic table with the retailer.

It’s critical to share information openly and honestly. Transparency is a two-way street. Both the retailer and 3PL need to clearly understand the value that each party brings to the table.

Good communication is also essential. Clarify specific requirements such as product deliverable specifications, storage needs and operational variances up front — and along the way — as forecasts change or the business evolves. Keep lines of communication open at all levels and schedule regular check-ins and business reviews.

Both parties need to share information and data openly and honestly to ensure everyone is on the same page and working effectively.”
~ Duane Sizemore, Senior Vice President of Business Development, Saddle Creek Logistics Services

How is technology impacting the relationship between retailers and 3PLs?

As technology advances at warp speed, you must take a strategic approach and rely on data to determine the best technologies for every business case.

Implementing technologies such as AI, visibility and data analytics requires that 3PLs and retailers work together more closely. Both parties need to share information and data openly and honestly to ensure everyone is on the same page and working effectively.

You also need to have the right processes, systems and business intelligence tools in place to capture and interpret that data and integrate it seamlessly. And you can’t overlook the organizational infrastructure necessary to put these technologies in play.

To learn more about how 3PLs can add value through technology and other means, read the full article.

Related to: Fulfillment Technology, Managing Growth