Third Party Logistics Companies Check List

Size of building
Number of bay doors (enough to ship and receive x amount of containers or trailers per day)
Close to ports, airports, railways
Close to major highways
Available space
Available space for busy / heavy shipping periods
Available space for expansion
Product mix: Complementary to yours? Same busy seasons, or alternating busy seasons?

Testing of employees for reading, writing, comprehension, basic language and dyslexia
Certification/Recertification for Six Sigma, Kaizen, Kanban
Union or non-union staff
Temp agency staff or company workers
Turnover rate
Education, language and skill level of administrative support staff
Education and professional level of middle and senior management
Training procedures for new employees
Probation periods for new employees
Background checks of new employees
Disciplinary procedures for employees found making errors or stealing
Motivation methods for employees (merit based awards, raises and promotions or seniority based?)

Reporting capabilities: name of IT manager (to collaborate with your IT manager)
Warehouse Management System (WMS): Integration/customization capabilities
Transportation Management Systems (TMS): Optimization capabilities for your freight
Carrier Relationship Program (CRP)
Yard Management Systems (YMS)
Tracking freight systems
Theft Management considerations
File transfer capabilities
Modification possibilities
What are the shortcomings of their systems?
What are the shortcomings of your systems?
EDI, RFID or Voice Activation capabilities?
Order Management
Strong Inventory control capabilities
Strong location management capabilities
Systems available 24/7?
Cost to use 3PL’s systems

Do they provide the necessary range of services?
Do they have partners or trusted suppliers for services they don’t supply but you will need?
Shift times
Overtime when necessary, and cost of overtime
Weekend work
Ability to add staff – labor pool
Ability to handle rush or emergency orders – what is the lead time necessary?

Who provides what information to whom – both ways?
What is the time frame for the information provided?
What is the method of transferring information? (Should always be in written/email form)
In what format is the information being passed along?
What information does the 3PL require from you?
What information will they provide you?
Review and define jargon and terms to be used.
Conflict resolution: the chain of command to solve problems

How long in business?
Warehouse: Asset or non-asset based 3PL?
Staff qualifications?
Accreditations?
Customer comments about the 3PL?
Core business/commodity specialty
Can they provide customer and other references?
Do they have experience shipping the same product as your company ships?
Do they have experience shipping to the same customers/consignees as your company?
What size customers do they handle?
What kind (corporate types) of customers do they handle?

Customer service: Use of VOC=Voice of the Customer techniques to satisfy your customers: on tome delivery to your customers
Transportation: asset/non-asset? How to handle the FSC (Fuel Surcharge?);increases
Timetables and deadlines for receiving and providing information
Timetables for receiving new merchandise
Timetables for shipping orders
Expected quantities of inbound and outbound merchandise.
Expected number of orders and units picked or shipped daily/weekly/monthly.
What is the division of duties? Review all aspects of information management and flow to determine who is
responsible for what (for example: routing, backorders, invoicing, returns, POD tracking, QC inspections)
What are the shipping priorities?
Service Level Agreement (SLA) with Key Performance Indicator (KPIs) experience
Types of contracts 3PL requires? Ability to negotiate with 3PL?
Price list validity? Dynamics of pricing?
Receiving, Inspection, Dock-to-Stock, Warehouse Management, Cycle Counting capabilities, inventory
Management, warehouse-to-dock, turn around tomes?
Safety Program/Safety Manager
LEAN initiatives, meeting OSHA requirements, Six Sigma, Continuous Improvement/Kaizen, Kanban, Free/Foreign Trade Zone, cleanliness, 3PL teamwork

Who is responsible for routing, packaging, and shipping guidelines?
Who is responsible for charge-backs? Under what circumstances? What is the 3PL legal limit of liability? What does their insurance and your insurance cover and under what circumstances?
Who handles RMA: Returned Materials Authorization
Reverse Logistics Program
Create quantifiable standards and measurements of performance.
Does the 3PL subscribe to the VCF (Value Chain Federation) Clearinghouse (VCF is an organization that advocates trading partner alignment, retailer-supplier operating synchronization, and best practices by facilitating collaborative and educational opportunities and providing technology solutions to eliminate disruptions throughout the retail value chain. RVCF includes North America’s leading retailers, merchandise suppliers, and service providers)…. and do they use it?
CSA (Compliance, Safety, Accountability: US Department of Transportation: Federal Motor Carriers Safety Administration) compliance?

Price structure that is easy to understand and easy to check
Invoices formatted to your specifications with proper backup documentation.
Comprehensive price quote. Include all possible services you may require.
Payment terms
Finding a true partner
Do you feel they are honest, trustworthy and sincere?
Do you feel they have a passion for the business and a commitment to customer service?
Do they have the experience, education, and professionalism you require?

10 Steps for a Third Party Logistics Companies (3PL) Check List