When we talk about budgeting, we generally talk about the math of saving money, but there’s a lot more to it than that. The way you spend money is important, and can sometimes save you money as well. In today’s post, we’ll be talking about one of the things you might be spending money on that is actually a good buy – the third-party logistics agreement. 3PL is an acronym for a third-party logistics agreement. 3PL agreements are when businesses contract outside providers to handle their logistics needs, such as warehousing, shipping, or managing inventories. It’s important to understand what a 3PL agreement is, since 3PL agreements are something that individuals can get in on as well. 3PLs can be used for things like moving or helping with storage, so it is worth taking the time to look into versatile agreement. Making the right 3PL agreement can help you save time, which is essentially making money. Let’s make your 3PL agreement that saves you money as well. 3PL agreements are a savvy buy for anyone, but there are plenty of factors that go into a good agreement.
Jason Graves at 3PLexx negotiates contracts with 3PLs and advises businesses about how to best take advantage of 3PL services, as well as how to get the best price. He suggests: Don’t choose a 3PL solely on price. Price is an important consideration, but it is even more important to ensure you are entering into good service agreements with your 3PL. Ensure you are paying a fair rate for your service, but at the same time also ensure that the 3PL is prepared to negotiate with you on your behalf, and deliver quality service. You can have the lowest rate, but if service is poor, then what is the point in having the lowest rate. Selecting a 3PL that is comparable in price to the market is extremely important. While you want to get the best deal, you also need to keep in mind if the 3PL will be around for a long period of time. Since prices will not drop significantly simply because you go with the cheapest 3PL, it pays in the long run to sign a contract with a 3PL that will be there for the foreseeable future.
Use a good contract to make agreement and expectations clear. Ensure the agreement is clear and concise. There is nothing worse than business partners who don’t fully ensure the agreement, and then begin to argue about different points. The cost to a business of a small dispute is typically more than the business would have saved by simply implementing the agreement. Be flexible. Things do change. If you are no longer able to afford the 3PL, if the 3PL is increasing its rates or if you have a completely unexpected change in a cycle, just speak with your 3PL and work out a solution with them instead of hiding behind the contract. You can apply these principles to every aspect of any 3PL agreement.
We’re especially partial to the number three, but only because it’s a number that denotes being on the right path to success. A good 3PL agreement can be essential to getting started with success. 3PL relationships can save you money, give you flexibility in a situation where you typically wouldn’t have flexibility, and allow you to get the most out of a situation. The main objective is to align your interests with your 3PL, so your interests are met. It should be a symbiotic relationship, and understanding the basic principles of getting into a solid relationship with a 3PL can go a long way in ensuring that the relationship is, indeed, symbiotic.
We went over some basic principles to getting a good 3PL agreement. It’s important to get what you pay for, with a solid contract that avoids miscommunication. If you’re interested in delving deeper into the terms of a 3PL agreement, check out this article, Navigating 3PL Agreements: Essential Components and Best Practices. There are a lot of necessary components, and you don’t want to miss out on making the best deal possible for you!