(Harry Drajpuch is the CEO of Weber Logistics)

When outsourcing logistics services, the success of the relationship is less about what happens AFTER the contract is signed and more about what happens BEFORE the work starts.  

Shippers seek different types of logistics outsourcing relationships with providers.  Below is a high-level characterization of some of these relationship types:

Each type of relationship can add value for the customer – but it’s important that shipper and 3PL are aligned on exactly what type relationship is desired and, more importantly, what is required of both parties in each type of relationship. 

There is nothing inherently wrong with any of these types of relationship.   But problems arise when expectations are misaligned.  

For instance, for a shipper seeking a low-cost solution, a 3PL’s pricing calculation may not include dedicated engineering resources.  If this same shipper expects its 3PL to drive a constant flow of new ideas and breakthrough strategic thinking, this could be a problem.  The 3PL could, in fact, have these engineering resources available, but may simply have geared the solution to align with the shipper’s priority to reduce transaction costs to the lowest possible level. 

Here’s an example to illustrate the point.  Let’s say you need an oil change for your car and price is important.  The shop below might be just the place.   The price is very reasonable, they use high-quality oil, the service is good, and the car is ready within an hour.  The focus in the garage is efficient execution.  In and out.   A perfect fit.

Now let’s say you’re preparing a car for your daughter to take away to college for a year.  That same garage may not be the best fit.   To provide the assurance you want, you may look for an auto shop with experienced mechanics, advanced diagnostic equipment and a more thorough process.   As a result, you may end up in a shop that looks more like the one below, even though the hourly rates are much higher and the wait time longer.   

A big part of the success of a logistics outsourcing relationship depends on shippers doing some hard thinking well BEFORE a 3PL partner is identified and a contract is signed.   This is not an outward-looking thought process; it’s more about looking inside and understanding where the organization is going, long term, and what the company truly needs from a logistics partner.

Once this hard work is done, it’s easier to find the right partner and align around a shared set of goals.