Top Tips When Evaluating a 3PL's Warehouse Function

Third-party logistics companies (3PL) outsource warehousing services to companies that do not have warehouse facilities. The article below discusses how you can evaluate a 3PL's warehousing services. 

Location and Network

The 3PL's warehouses should be strategically located along your distribution routes. It ensures customers have an easy time accessing your products. How secure is the facility? A perimeter wall, CCTV system and armed security guards will ensure your products are safe in the warehouse. 


What services does the 3PL provide? For instance, if you deal with perishable goods, such as meats and flowers, you would want a 3PL that offers cold storage facilities. If you wish to export your products, you need a 3PL with bonded warehouses. The company should also secure the necessary permits to get your goods through customs. You could also need transloading services. This service happens when you need to switch from one means of transport to another. For instance, goods could be delivered by trucks to the warehouse and transported via air to customers. 

Warehouse Operations

Below are a few tips to help you examine the effectiveness of the 3PL's warehouse operations: 

  1. The company should have trained staff and a 24-hour customer care system.
  2. The company must have state-of-the-art warehouse equipment such as forklifts, conveyor belts, wrapping and packaging machines, docks and elevated platforms.
  3. The 3PL should have warehouse management systems to ease order tracking, picking and eliminate stock-taking orders.
  4. Evaluate warehouse safety measures; for instance, employees should have personal protective clothing, and the warehouse should have fire alarms and extinguishers.
  5. What type of insurance does the warehouse have? If goods are the facility are insured, you will receive compensation in case of a fire or robbery.

Business Cycle 

The company should understand your business cycle. For instance, you may need a whole warehouse during winter and limited space during summer. During peak seasons, you may need 24/7 services to ensure effective order fulfilment. 

Pricing, Terms and Conditions

The company should have a friendly pricing strategy. Do not shy off from comparing the rates of various companies.

Examine the terms of your agreement. For instance, what process will the company use to adjust their pricing? How will you resolve disputes or terminate the contract? What liabilities does the company accept?  Preferably, engage a lawyer if you have trouble understanding the legal terms. Renegotiate the terms if you find them unreasonable.  

When looking for 3PL warehouse services, examine the company's warehouse network, the available services, the efficacy of their warehouse operations, flexibility, the pricing and the terms and conditions. Look for a 3PL logistics warehousing provider near you for more information.