Why data matters when shopping for a new 3PL

By Sara Abrons

When looking for a new 3PL, most e-commerce brands focus on just a few big things: warehouse location(s), the 3PL's specialization (in terms of sales channels and product types) and services offered, technology and of course, pricing. Ones that have done more than one 3PL search or really know what they're doing will add a few things to the list — account management and customer service (Do we get a dedicated account manager who is on location where our inventory is?), checking customer references, visiting the warehouse in person, a thorough vetting of reviews or asking around for other brands' experiences. But one thing that doesn't seem to be check on too often, and isn't on many "how to vet a 3PL" check lists is availability of data to clients.

To check that, ask to see example invoices to see how detailed they are, and for an example export of order data. If a customer dashboard is available, you can also ask for a login to see what's available to you in there instead of the export of order data. Way too often, customers find out what this all looks like after they've already moved in and receive their first invoice.

It's not uncommon for a 3PL invoice to be a single page PDF, showing line-items for services, storage, receiving and packaging, without any kind of breakdown. This is usually because the 3PL hasn't yet upgraded their technology to make this possible, not necessarily because they are attempting to hide anything. But this isn't great for customers: It makes it impossible to audit your 3PL invoices to make sure you're being charged what you're supposed to be charged, and it makes it impossible to gain insight into your supply chain costs to see how you could potentially save money.

While the single-page PDF invoice is on the extreme end, what is very common is for customer (your customer) order data to not be detailed, particularly the shipping. Even if you purchase shipping through your 3PL, you should be able to see a full breakdown of the shipping expense for every single order, just like you would on a FedEx or UPS invoice. Without this info, it will be impossible to understand why your shipping costs are what they are, and what you could do to reduce them.

Here are a few examples of things you could figure out with that data and then takes steps to reduce shipping costs, even if you aren't able to negotiate shipping rates since you're buying them through a third party:

• The DIM factor on a particular service is causing your packages to ship at a weight double its actual weight, but if you invested in custom packaging for your most common shipments, you could minimize the cubic volume of your packages, getting them under a threshold to be impacted by the DIM factor, so you save enough money overall to cover the cost of the custom packaging and still save a good amount on top of that.

• A disproportionate number of your packages go to EDAS or DAS zip codes and that it makes sense to switch to USPS even though the base rates seem higher because of your package weights, just so you can eliminate those surcharges.

• The 3PL is shipping packages using an expedited service like Overnight or Two-Day — even if the end customer's location is close enough to the warehouse to get it in that same timeframe with regular Ground delivery.

So when you're in the market for a 3PL, be sure to ask for example invoices, and go over with the sales team in detail how you are given access to data. It's also critical that you are able to export this data to spreadsheets (not just receive it PDF) for easier analysis.

At Fetch Fulfillment, we've invested a lot of time and money (and continue to do so) in our technology so we can continue offering better data transparency to our customers.