About.com - Selecting a 3PL

 About.com has a very good article about selecting third party logistics providers (3PL).    Some of it is quoted below.  3PL's, such as DHL and others provide outsourced services that are critical supply chain components.  They enable more effective use of corporate cash reserves and extend a firms supply chain.  Global 3PL's can assist in getting into markets in far off locations and in unique service offerings such as Service Parts Logistics, reverse logistics and exchanges.  

http://logistics.about.com/od/strategicsupplychain/a/select_3PL.htm Third party logistics (3PL) companies are a becoming an important part of today’s supply chain. These companies offer services that can allow businesses to outsource part of all of their supply chain management function. Many 3PL companies offer a wide range of services including; inbound freight, freight consolidation, warehousing, distribution, order fulfillment and outbound freight. The growth of 3PL companies has been driven by the need for businesses to become leaner, reducing assets and allowing focus on core business processes. Deciding to a use a third party logistics company is a decision that depends on a variety of factors that differ from business to business. The decision to outsource certain business functions will depend on the company’s plans; future objectives, product lines, expansion, acquisitions, etc. When selecting a 3PL, the request for information (RFI) or quotation (RFQ) should be as detailed as possible. The company that is selected should be able to fulfill all the logistics requirements and that can only be assured if every requirement is communicated to potential companies. The RFI should include a detailed description of the areas to be outsourced. This will usually include: The scope of the contract, including locations, facilities, departments. Information on volumes involved; number of deliveries, warehouse sizes, number of items, etc. The logistics tasks are to be performed, e.g. warehousing, transportation, etc. The level of performance required. The selection team will usually review each of the bids based on the criteria and give each bidder a score. Depending on the importance of each criteria, a weighting can be given which gives more importance for one or more criteria in the selection process. Once the selection team has evaluated the bids, management will often select the top two or three companies for site visits, face to face interviews and more detailed reviews of financial records. Once a company has been identified contract negotiations would follow before a final agreement could be reached.

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Comments

[Quality Warehouse and Distribution]

Great information! It's great to see a post about the benefits of third party logistics providers.

[Logistiker]

We use only third party transports but offer our customers the full range of logistics (my fulltime job ;).

Nowdays it's very dangerous to have your own trucks in an unstable transport situation in Europe.

[Simon]

Keep up the good work Eric, Great to read your blogs