As we all know, logistics plays a key role in the booming e-commerce business when it comes to their supply chain management and the order fulfillment to ship orders to the customers’ hand.
As a result, it is absolutely crucial to work with a reliable logistics partner given the efficiency, effectiveness, and safety over the road of transportation management.
A reliable logistics partner will help you with their expertise to streamline your business.
It will cope with your business expansion, and reduce risks and costs with their best solutions involving transportation, warehousing, and distribution, shipping & receiving.
Choosing the best suitable logistics company is not an easy task despite you will come across a number of logistics business entities.
There are many factors you have to take into consideration before deciding the right partner.
What are they?
We will dwell on the checklist and elaborate our best tips to choose the best suitable logistics partner.
Hope you can find some insightful idea to start working with the right logistics partner.
Let’s get started
How to Prepare to Identify the Right Logistics Partner?
To identify the best logistics partner, you have to understand your business needs and your expected logistics service first and foremost. To ensure the effectiveness of the checklist, you have to figure out your current freight logistics, supply chain, transportation lines, freight costs, performance audit, and relationships.
Get to know which part of the current logistics provider is unable to meet your demands, and figure out your expected logistics provider. You will understand the service level of a logistics provider that is suitable for your business. Besides, you have to take business growth into account. It’s not easy to get the right logistics partner. You’d better choose the provider who can cope with your business expansion.
With your business needs in mind, you are allowed to create a plan for the selection criteria. This means you have to figure out how to evaluate a logistics provider. For this process, you can hire a consultant to get help with the selection process. And finally, you opt to narrow down your options. A smaller pool of potential logistics companies will available for you to decide the right one for your business. Remember to negotiate hard with them to ensure you will get the best possible service with a limited budget.
The checklist for choosing the right logistics partner
1. Area of Expertise
There are various types of logistics provider including transportation, warehousing, distribution, shipping & receiving. Not all logistics companies provide for everything. Most of them will have their own expertise in a certain area. Try to match your needs with the service and expertise of the logistics provider. Make sure the expertise of the logistics provider is the best fit for your business.
Also, there will be a set of capabilities that meet your short-term and long-term needs. For instance, you need a transportation-based logistics provider, you have to dig deeper about the capabilities of relevant service providers including the truckload distribution, access to dedicated trucking assets, drop-frame trailers, etc. You can ask relevant questions to the logistics provider about their basic business facilities. Get to know the solutions for your short-term and long-term business needs.
2. Company Sustainability
The sustainability of the logistics provider matters to your business. As a result, it’s imperative for you to work with a company with long-term proven success and sustainability. The stable business partner will be allowed to cope with all possible emergencies and urgent needs.
Try to cooperate with a financially sustainable business for optimal logistics solutions. Remember to check the payment history and financial report in the past years. Try to identify a sustainable partner that continues to invest in facilities, equipment, and human resources for optimal logistics solutions.
Try to figure out the business expansion plan to get to know the sustainability of the provider. You are allowed to figure out the business growth plan with your own. Make sure you can keep a stable partnership with the logistics provider in the long term.
Credibility is crucial if you want to build a long-term logistics partnership. Make sure the partnership can be tested. To find a credible logistics partner, you have to investigate if the service provider is inclined to honor its business commitment with integrity or not. Time will tell you whether the company enjoys a good or bad reputation among its customers, suppliers, business partners.
On the market research stage, you can find the online customer reviews to figure out the social testimonials about the logistics service, business commitment, even marketing activities. On one hand, remember to double check if a provider offers a relatively lower than the market. Get to know all elements leading to a lower price. On the other hand, try to cooperate with a reputable logistics provider with limited budgets.
4. The network of locations
As a matter of fact, the network of locations of the logistics provider determines your business expansion or distribution in the world. A competent logistics partner will offer you a strategic approach to cope with your business distribution needs with optimal efficiency.
For instance, you need a cross-border freight forwarder who can deliver your packages to South Africa within 1 year. Then you need to figure out the candidates who already have a business network in the country, or in the continent. Is there anyone will establish their networks in the area within the time?
The right logistics provider will definitely offer strategic solutions to meet your business expansions. They have a network of located facilities and the ability to open new locations to cope with your specific needs.
5. Customer service
Does the logistics provider offer excellent customer service, quick responsiveness, fluid communications, and effective solutions to urgent issues? These elements are the key to determine if the logistics provider prioritizes its customer services. Normally, it’s not easy for you to identify their customer service in the early period. But there is still something you can do.
Undoubtedly, all candidates will claim to enjoy excellent customer service. But what is about the fact？Let their customers tell you the truth. You can ask them to get the reference, especially customers from similar industry and needs. Get to know what their customer feel about the customer service of the logistics providers, you will have your answer in your mind. If the customer service is consistently good, it seems that the company has created a mature customer service system over the past years in the industry.
Does the logistics provider have a sense of safety? There is no denying that you have to pay attention to safety awareness of your logistics provider. It is absolutely crucial when deciding a logistics partner. A deadly fire in the transferring warehouse will cause huge loss for your business. Try to check the safety awareness of the logistics provider, and relevant facilities, even safety management.
A good logistics company will offer safety training regularly to their employees, place safety warnings in the right place, check their facilities regularly, and document a company-wide safety standard in line with the industry safety rules and regulations of the nation. Make sure your products will be sent to the destinations without any damage during the operation of the logistics service provider.
Is the logistics provider equipped with the latest technology innovations to offer efficient and effective services? As a matter of fact, the technology the logistics provider used matters your business and your customer shopping experience.
Generally, logistics companies should equip themselves with the latest technology to provide efficient and transparent service to the clients. They can utilize technologies like warehouse automation, cloud computing, web-based booking and tracking system, etc. These technologies will help them provide error-free and consistent service with quick reports and efficient distribution system. You can access to the timely info about the whereabouts of your products at any time.
Choose a logistics provider that enjoys great automation technology. It will reduce your shipping cost and increase efficiency. For instance, you partner with a logistics company which can integrate their business system with your ERP. It makes seamless integration. You can submit orders at any time. And you can track when and where your order gets processed, packed, picked, and shipped. A logistics provider with extensive technology expertise will definitely bring your great benefits.
Is the pricing transparent? Are there any hidden charges? The price charged by the logistics providers is a key metric for you to considerate. You have to track the price per delivery before you make the final decision. Normally, the costs charged by the logistics companies should include transportation cost, receiving cost, warehousing fees, pick-and-pack fees, shipping costs, account set-up fees, and the monthly minimums.
When you get your candidates’ quotations for your long-term partnership, you can figure out the best one for your business. Get to know what they will charge you before enjoy their service. Remember never to ask the price first. You have to combine its price and service quality to determine if it is worthy of you to pay the money. Never think the price alone.
9. No Subcontractors
Will the logistics provider do the service by themselves? In fact, there are many logistics companies will not keep their promise. They only advertise logistic service and sub-contract to other small or local carriers or entities.
In this occasion, it totally goes the wrong way as the subcontractors will only listen to the contractors. Communication will be difficult. The logistics operator will control and operate the entire distribution network from pick up to delivery.
Try to avoid logistics subcontractors when you are seeking a reliable logistics provider as the service from the subcontractor may go awry.
10. Freight Management
How does the logistics provider manage the freight? How does it react to the fluctuating market needs? Normally, a good logistics partner will be capable to respond quickly to the changing market needs. It would likely to offer a quick and effective solution to the customers’ specific situation. They can coordinate based on customer demands. They may even provide customized service and tools to their clients based on their business requirements.
Also, a good logistics provider should be aware of when they have to drive up or drive down costs in line with the economic circumstances and business changes. For example, trucks would be more expensive and scarce during the harvesting season given the higher market demand. They will plan for seasonal and regular market changes.
How soon with the logistics partner will process your orders? How long will it take to ship your orders to your customers’ hands? Actually, efficiency matters your business and customers satisfaction.
Efficiency means the time it takes to pick the order, pack the order, and ship it to the destinations for the logistics company. The shorter time it takes the more efficient service it is. For a logistics company, both the transportation routes and modes play a key role when it comes to the order delivery.
Communication also affects efficiency. You can check the communication channels of the logistics provider. The more it offers, you will have more options to keep instant communication with it for a better solution.
All in all, choosing the right logistics partner is a challenging task. You have to do your homework, set up your metrics firstly, and then walk through the checklists to work with the right logistics partner. There are many factors to consider given the listed checklist. We’ve listed the major factors in this blog, and hope they will be helpful for your business. You can incorporate some of them when deciding changing your logistics provider. If you are still stuck in these metrics, go and check with relevant consultants. Definitely, they will help you out.
We do hope you can cooperate with the best-fit logistics provider with the checklist, and streamline your business in supply chain management and the product delivery. Now, it’s time for you to rethink the service of your current logistics provider.
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