Today, I will likely get two calls.  One will go like this:

Me:  Hello, how can I help you?

Prospective Customer:  "Please send me your warehouse rates."

Another one will go like this:

Me: Hello, how can I help you?

Prospective Customer:  "I’d like to discuss my current supply chain in order to see how you can help improve our efficiency.” 

Customer #1 seeks a transactional relationship and is shopping for the best rate on what she considers a commodity service. 

Customer #2 views logistics services more strategically and seeks a relationship with an expert partner that can solve her problem. 

In today’s volatile economic environment, price has clearly become a very important factor in 3PL selection.  But, as the 2012 Eye For Transport chart below illustrates, quality remains the #1 factor. 

Weber Logistics does its own research with customers on why they chose Weber.  The results somewhat mirror the Eye For Transport data:

1.   Reputation for quality service
2.  Track record of handling like business, particularly for consumer product vendors who need to comply with retailer routing guidelines
3.  Competitive price
4.  Strong infrastructure in Western U.S.
5.  Proximity to California ports for import freight
6.  Agility and quick decision making

Competitive transportation and warehouse rates are critical to earning new 3PL business.  But a lowest price strategy is simply not possible for quality-conscious organizations.  The investments we must make – in people, systems, training, and process engineering – preclude a “low price leader” strategy.  Karl Weber, who founded Weber in 1924, was focused on being the value leader.  He felt that the low price leader in ANY market could not win because there is always a competitor willing to go lower. 

Often, shippers who shop and settle for the lowest cost provider pay a very high COST for getting the lowest PRICE.   That cost comes in the form of retailer chargeback penalties, rework projects, lost sales orders from disgruntled customers, and other profit-draining impacts.  

Occasionally, my calls with rate-shoppers will evolve into a discussion of their true logistics objectives.  I’m happy to say that these have become some of our best and longest-tenured customers.