The Impact of the Costs of a 3PL

If you are a shipper shopping around for shipping then at some point the costs of a 3PL is going to become a topic of discussion. You may think to yourself, “Just go with the cheapest option!” I mean, it’s always good to save money right?

Not always, especially when it comes to the goods and services for your business. The 3PL that you choose is going to have COMPLETE control over your shipment so make sure you’re not just going with the low-cost option.

So, what are some of the advantages of spending more?

Advantages of a higher cost 3PL

Before we get started, it needs to be noted that higher costs won’t magically provide these benefits, a bad 3PL can always charge a high rate. However, most charging a higher rate are doing so for a reason, that reason is quality.

There is always a balance between cost and quality in every business. In terms of grocery shopping, you can go with a low-cost option such as Walmart or spend more and get higher quality goods.  Well, this applies to shipping in the same way. It does, however, raise the question of what is “quality” in a 3PL?

The quality of a 3PL is determined by many factors. The cost of a 3PL is able to provide some insight into overall quality but there’s always more research to do on your part. Some of these quality factors include:

  • Level of communication
  • Technology and Reporting capabilities
  • Flexibility and scalability
  • The overall level of customer service
Impact of a high cost and low cost 3PL

Impact of a bad 3PL

By now, you hopefully know that a good 3PL is worth the cost, but what can happen if you end up with a bad 3PL? One that doesn’t return your calls, is unable to work with your schedule, and not willing to budge on anything.

Well, the biggest impact is going to be late and dropped shipments. The impact of this varies depending on the company but it is always a hassle. What you thought was a guaranteed and easy shipment suddenly becomes a headache and a lot of work for you.

Partnering with a bad 3PL also makes it difficult to plan ahead. For one, they won’t be able to make the kinds of recommendations and improvements you can rely on. Also, you’ll never trust them 100% to be able to handle a shipment that you NEED to be delivered.

In the end, you just have more work for yourself, more stress on whether your shipment is going to arrive, and more costs. When it comes to shipping it is always worth spending just a bit more for quality.

In Conclusion

While a higher cost of a 3PL does not ALWAYS equal a higher level of service it is a good indicator. However, they could be a new company trying to win on clients or maybe they always cover the lane you are shipping. There are many cases where a low-cost 3PL is the best option. Because of this, it’s important to investigate a 3PL before partnering with them.

Check out on-time percentages, carrier base, experience in your industry, and additional benefits they offer. Overall, when possible, get to know the company a little bit before partnering with them. Doing so results in much stronger relations for everyone involved in the shipping process.

At Becker Logistics we offer a high-quality shipping service at a cost that works for you and your budget. We have been around for 24 years and in that time have built the processes and partnerships to help you succeed. Reach out and contact us if you would like to learn more or request a quote to get started today!

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