How to Measure Third-Party Logistics

Whether you are looking to find the right logistics company for your business needs or are trying to figure out if the company you’re already working with is doing a good job, it pays to know the proper metrics. Outsourcing your product delivery means outsourcing part of your reputation. After all, customers don’t always make the distinction between the company delivering a product and the people who actually produce it. How the third-party logistics (3PL) company performs will impact how customers view your business.

APS Fulfillment, Inc. has mastered the ins and outs of our business. In doing so, we know what you should look for when evaluating any 3PL company. The following factors are ones to watch when assessing 3PL quality.

Average Delivery Time

When evaluating a logistics company, look at how long it takes on average for your product to arrive at the customer and assess whether it’s within an acceptable timeframe. If possible, get access to the underlying data that was used to determine the average delivery time. Look at the longest delivery time used in the data and keep in mind that “average” means almost half of the deliveries were closer to this time than the average value the company is touting. Also examine how much time passes between an order being placed and the product actually leaving the warehouse, as this can expose underlying inefficiencies.

Days Late

Delivery time and days late are two sides of the same coin for a logistics company. Lateness can and will happen eventually for any number of reasons, but any company with a glaring trend for late deliveries should be avoided. When late deliveries occur, examine just how late they actually were; a product arriving a day or two outside of the estimated timeframe is vastly different than one that doesn’t arrive until a month later. The former instance can be the result of traffic, temporary surges in demand, or weather, while the latter is more likely the result of mismanagement.

Keep in mind that some 3PL companies don’t consider partially completed deliveries to be late so long as the initial delivery was made within the estimated window. This is unacceptable to both you and your customer; if a product is not delivered in full within the window, then it is to be considered late.

Rate of Returns and Quality Control

Returns are inevitable in any business, but that doesn’t mean they aren’t avoidable. A good measure of a logistics company is how often products are returned due to avoidable errors such as damages or the wrong item being delivered. When an error does occur for one of these or similar reasons and a return is made, how does the 3PL company react? Do they drag their feet and shift blame, or do they investigate the incident and take steps to prevent future occurrences?

APS Fulfillment, Inc. is an e-commerce product fulfillment and third-party logistics company in Florida. We specialize in turnkey, state-of-the-art delivery technologies that enable quality control, real-time inventory and returns tracking, and customer service. For more information, visit www.APSFulfillment.com.