Choosing the Right 3PL With Adam McCoy From eHub

On this episode of Unboxing Logistics, Adam McCoy and Lori Boyer sit down to talk 3PLs: what they are, when to start working with one (or more), and how to manage successful partnerships.

As it turns out, choosing the right 3PL is a little like dating. There are lots of options out there, and you don’t want to make the wrong choice. While Adam doesn’t give any dating advice during this episode, he does share plenty of tips for making sure your 3PL partnership doesn’t end in heartbreak.

Why work with a 3PL?

First things first—what exactly is a 3PL? Adam defines a 3PL as “a partner to the ecommerce business” that focuses on “getting the right product to the right customer on time.” 3PLs handle logistics activities like picking, packing, shipping, kitting, returns, and more. 

So how do you know when to turn your order fulfillment over to a 3PL? According to Adam, there are two common signals that it’s time:

• Growth. As fulfillment becomes more time-consuming, ecommerce businesses must decide whether to outsource it to a 3PL or expand their in-house operations.
• Specialization. Many 3PLs specialize in certain types of shipments, including big and bulky products, hazardous materials, and cold storage for food.

Managing the 3PL relationship

Adam believes that the best time to start managing a 3PL relationship is before you sign a contract. “Ensure that you've set expectations. Your contracts are negotiated in a way where SLAs [service level agreements] are defined. And if you've done that properly, it makes other aspects of managing the relationship down the road easier.”

And while a breakup is never ideal, you shouldn’t stick with a 3PL that isn’t working out. “If you have a 3PL partner that's not meeting those needs and those SLAs … if you can't address that, that's probably a good indication that you should look for an alternative partner.”

Why technology is key

Technology helps bridge the gap between you and the 3PL. Adam explains how: “We're working with a customer [who is] using a technology where the merchant and the 3PL are effectively in the exact same instance of the technology. So they can [both] see who's ordering, who's fulfilling what, and it's almost like they're working side by side.”

The takeaway? You can maintain visibility and control even when the 3PL physically stores inventory and ships packages. “The ecommerce business isn't blind to what's happening with the 3PL … [the] technology that strengthens that partnership is key.”

Links

• Connect with Adam on LinkedIn: https://www.linkedin.com/in/aadammccoy/ 
• Visit eHub’s site: https://ehub.com/