From the experts: How to choose a 4PL provider

If you’re reading this, you’ve probably already heard about the benefits 4PL firms have for businesses looking for effective, affordable, and scalable logistics.

Now you’re ready to take the next step and figure out which 4PL provider is the best choice for you. That’s not always so easy. In today’s fast-growing industry, there are many options out there. And if you quickly skim their websites, most of them appear to offer the same thing. But with a little digging, it is easy to find major gaps between services offered.

Read About CBIP’s Global 4PL Logistics Services

We really think you should check out our services if you want a truly customized and affordable 4PL option for your business. However, we understand picking a logistics provider is a big decision and we want to help you pick one that best suits your needs.

Here’s what you should look for and ask about when selecting a provider for your business — from the experts.

A GOOD 4PL FIRM SHOULD USE THE LATEST LOGISTICS TECHNOLOGY

To operate effectively as a modern business, you need full visibility for your shipments.

A good 4PL firm should let you see where your goods are at any given time without the hassle of constantly hopping on a phone call with them.

Technology is the name of the game in logistics today. Luckily, there are tons of ways to effectively track and view local delivery partners, inventory, warehouses, fulfillment capacity, and delivery status. When you are meeting with a 4PL provider, make sure to ask about the following:

LABELING SERVICES 

Even though 4PL firms work with many different providers, it is their job to piece them together into an understandable and trackable system for you. This is usually done through custom labeling services in warehouses. If this part of the operation is done well, it should be easy for providers at every stage of delivery to scan the label and report back.

SOFTWARE INTEGRATIONS 

Major software systems like Anchanto have become central to the logistics industry today letting clients like you view all of your shipping activity from one place. They can do things like:

• link your logistics to your e-commerce store
• give you an in-depth view of shipment times
• Show you live overall views of costs
• Help you identify growth areas based on previous shipment data

At CBIP we use a special software powered by Anchanto to help you manage, track, and analyze every part of your logistics. Your provider should either use something similar or have their own in-house version.

CHOOSE A 4PL FIRM THAT HAS REAL INDUSTRY CONNECTIONS

Many fourth-party logistics companies today have the technology you need, but sometimes that great software is backed by inflexible and barebones logistics infrastructure. Once you’ve established that a business uses the proper tech, you should ask the following: 

RELATED: What is 4PL? And Why is it Making Logistics Unrecognizable

CAN THEY SHIP WHERE YOU NEED THEM TO TODAY?

When you’re working with a 4PL firm, you need to make sure they actually have the connections to ship where you want to go. They should have relationships with properly licensed freight forwarders and have warehouse connections in major ports worldwide.

CAN THEY ADJUST TO YOUR NEEDS?

The point of fourth-party logistics is that they are not tied down by their own network of providers. If you need an adjustment, a good 4PL can quickly get you operating with a new freight forwarder, warehouse, or shipper.

Maybe you already have a logistics partner who knows your needs well and you’d like to incorporate them into a new plan. If your 4PL provider really can build you a custom plan, they should be able to consider integrating with your existing providers.

When meeting with a 4PL firm, ask how quickly they can scale your network as your business grows.

A GOOD 4PL FIRM SHOULD KNOW THE INDUSTRY

Because 4PL firms get their value from being a single point of connection in your logistics network, you also should expect them to be able to give you timely information about the logistics industry.

A couple of things to note when searching for a knowledgeable 4PL partner:

BE CAREFUL OF 4PL FIRMS OFFERING FLAT RATES

Logistics are expensive and unpredictable. As we saw with the semiconductor shortage this past year, narrow production pipelines can cause demand for goods to skyrocket. When that happens, costs can vary drastically.

Whenever you see a business claiming flat rates, that usually means they are sacrificing predictability or skimping in an area where they should not be to raise or lower their price. A fourth-party logistics provider should be upfront about the rates — and be able to explain them to you if they aren’t matching the market.

CHECK THAT THEY CAN MAKE ACCURATE PREDICTIONS FOR YOUR BUSINESS

In e-commerce, having more inventory than demand in a given location means that you waste money. And if you don’t have the right inventory to meet your demand, you’ll lose customers. To run an effective business, you’ll likely need to plan in advance how you’re going to move your products before your customers make their purchases.

A 4PL service should be able to help you conduct a detailed analysis of your historical sales and help you build better systems for meeting future demand.

MAKE SURE TO GET QUOTES AND MARKET INFORMATION FROM OTHER SOURCES BEFORE CALLING

If you really want to show up prepared, make sure the provider you’re looking to work with knows what they are talking about by shopping around and hearing what other providers have to say. It should become quickly apparent whether or not a provider knows what they are talking about after a few brief calls.

WORK WITH A 4PL FIRM THAT DOES EVERYTHING YOU NEED IT TO DO

At CBIP, we think you should be investigating all of these points during your search. We know because we do them all.

When you sit down to a free meeting with our team, we immediately help you review your current logistics plan and help you find where you’re strong and where you can improve. If you decide you like working with us, we can give help you run any level of service you need with features like:

• Our own custom OMS system powered by Anchanto
• A global network with contacts in tough markets like Southeast Asia
• A comprehensive label tracking system we implement in all of our warehouses
• Specialization in last-mile fulfillment
• An ever-expanding list of logistics options for your business as it grows

Even if we’re not quite the service you’re looking for, we’d love to be your reference point for vetting other services. Hop on a call with us and we’ll tell you exactly what you can expect from a great logistics partner.