What kind of services should I NOT expect from a 3PL?

What kind of services should I NOT expect from a 3PL?

QUESTION:

What kind of services should I NOT expect from a 3PL?

EXPERT ANSWER:

Alex Scott
Member of Supply Chain Management Ph.D. Program
Penn State University

3PLs thrive on economies of scale.  For instance, transportation brokers provide a service by having contracts and connections with thousands of carriers.  As an individual shipper, it is likely you won’t have the time or resources to establish all of those relationships.  Likewise, brokers also have connections with manifold shippers, something that carriers might not have the time or resources to establish.  So the advantage of scaling across many shippers and many carriers provides the opportunity for a middleman (i.e. 3PL) to provide value that would not exist otherwise.  Similarly for warehousing, customs clearance, international shipping, etc.  These are all areas that 3PLs have thrived, and for good reason.

Where they will likely not succeed are areas that are specialized for your industry.  Naturally, these specializations are often where your company’s competitive advantage lies, so you likely would not want to outsource those tasks to a 3PL.   So when thinking of when and where to use a 3PL, ask yourself these questions:  is this task a source of competitive advantage for me?  Are there other companies that are using a 3PL for this type of service?  Would a 3PL be able to do it cheaper than me?  If so, why?


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