How to Find the Right Logistics Partner for Your Business
Whatever your industry, you must make sure your direct sales supply chain is prepared to respond to globalization and its impact on consumer behaviour and technology. Social media and online conferencing are rapidly replacing door-to-door salespersons with their immediacy and indirect techniques. When a company scales, inventory, scheduling, and transportation become concerns you need to find the right logistics partner.
No company – not even the mighty Fortune 500 – attempts to tackle these challenges internally. The following criteria will help you find the right logistics partner for your company.
Direct sales are dominated by countries outside the United States, especially in emerging economies like China and India. You can find these customers on the internet, but you have missed a golden opportunity if you cannot deliver to them because of your logistics.
With the right logistics company, you can sell door to door. Global direct sales are estimated to be over $167 billion. To scale with you without interruption of service, you must ensure your partner has an international scope.
Depending on how far you expand your reach, you might have to focus less on your physical storefront and consider generating online sales from a smaller “conference center” strategically located in a remote area.
Managing remote physical centers requires monitoring your budget and your local audience and service them on a scale. You should be able to rely on your logistics company to fulfill orders for physical stores of any size and deliver products through the fulfillment method of choice of the customer.
The Right Logistics Partner offers Deliverability with Flexibility
Logistics companies should be able to adapt to changing production schedules as well. You may be restricted from shipping certain substances due to tariffs, duties, and regulations based on where you are shipping. In the same way as people who want to save money on airline tickets, you will also need to be creative.
At this point, you should have a logistics company that focuses on solutions. Anyone can look up new duties or regulations online; that’s not the purpose of your partnership. The term fulfillment and distribution refers to packing your products differently, rerouting production, and shifting production methods to get them to the final destination as cheaply as possible.
Preferences for Canadian Parcel Carriers
There are three major small package carriers in Canada: UPS, Canada Post, and Purolator. It is more common for Canadian companies to shop for low-cost providers lane-by-lane, unlike their counterparts in other regions. The fact that shippers can choose from various carriers offers them lots of flexibility and challenges those seeking volume discounts.
Having the option to choose from cost-effective carriers while not worrying about having enough volume to qualify for discounts is where third-party logistics can assist customers.
Account management, visibility, reporting, and scalability are other factors Operations and Transportation teams point out as being important in the initial third-party logistics selection process, but these factors will vary by business need. Check out our Canadian eCommerce & Logistics Market Guide for more information about how to begin eCommerce fulfillment in Canada.
According to the Direct Selling Association, direct selling accounts for more than $32 billion in revenue for more than 16 million people. With third-party logistics outsourcing, you can capitalize on the growth in this industry.
The Right Logistics Partner – Establish Reporting and Communication Expectations
The transition from third-party logistics to another must be seamless. Customer service channels and social media should be monitored for complaints about shipping. You may also want to ask whether your third-party logistics provider provides some form of reporting to help you manage things like timeliness of deliveries, order and delivery accuracy, and shipping-related damages.
Clarify your expectations for communication. Consider:
- Orders received
- Notices of shipment
- The number of items in inventory
- Purchasing orders
- Stock being received
- Notifications of adjustments
Establish Delivery Service Levels
Before you engage a third-party logistics company, be sure to review the contract details. Using the following questions beforehand prevents you from entering into an unreliable contract:
- What are their strategies for compensating for delays?
- What kind of non-disclosure agreement do they have?
- Can they provide references from satisfied customers?
- Is their financial stability at least two years old, and are financial statements available for review?
- If shipments aren’t delivered on time, decide whether you’d prefer a credit or a refund. You should know whether you’ll receive a credit for damaged or lost items and understand the service-level guarantees offered to assess your liability.
Lastly, consider if you want packages to be fully insured while in storage and during delivery and return. When negotiating, be specific. In some cases, you may want to insure items worth less than or equal to $100. Learn whether you’re getting insurance or just a liability included with the carrier.
Typically, costs are divided into the following categories:
- Transport costs: the cost of transporting products from your factory to your warehouse.
- Receiver costs: Offloading your products to the warehouse of your transportation provider.
- Storage fees are usually charged per pallet and are based on the amount of space used.
- Pricing for pick-and-pack services, where units are picked from shelves or bins and packed for shipment, with discounts for higher volumes.
- Costs associated with shipping the product to your end customer.
- There is a fee for setting up an account and integrating software.
- Spending minimums are generally required.
Stocks are Out of your Control
In third-party logistics warehouses, inventory will not be available immediately. Syncing warehouse inventory with your order management system is a must. If quality control issues arise, retrieving and repairing stock will be a challenge.
However, it is sensible to choose Third Party Logistics before your order growth overwhelms you. Managing logistics internally prevents you from focusing solely on your business.
Your brand image can be damaged if you break your fulfillment promises to customers or clients. Consumers have higher expectations now than ever. 13% of customers will never return if your supply chain is inefficient and deliveries take longer than expected.
Wills Transfer is highly recommended for logistics services in Ontario. Our trusted team has over 75+ years of experience in the business.
For more information about how we can help to improve your business logistics, call Wills Transfer at 1-613-283-0225 or contact us here.