West Coast and California Logistics Blog

You’re not going to choose just any 3PL to store and ship your chemical products.  The liability and safety risks associated with hazmat storage and shipping are just too great.

But how can you evaluate 3PLs to ensure you’re working with an expert company that can actually advise you on proper procedures for storage and handling?

Here are three tips for your vetting process.  Read our Insight paper for all 7 tips.  

1) Look for experience handing the class of chemicals you market.
3PLs that handle one class of chemicals are not necessarily qualified to handle others. For instance, non-regulated chemicals do not require the same stringent storage and handling procedures as flammables, oxidizers, explosives, corrosives, and other hazmat substances. Flammables, for instance, require firewalls and in-rack sprinklers. Make sure the chemical warehouse provider understands the requirements for your class of chemical and has the necessary operating procedures, permits, and physical environment to store and handle such products.

2) Limit transportation miles.
With chemicals, fewer miles are better. For one, hazardous chemical transportation is dangerous, and more miles means more risk. Secondly, transporting chemicals is expensive. Commercial drivers with a hazmat endorsement on their licenses earn 15%-20% more an hour than other drivers. Equipment and insurance costs add to this expense. The location of the provider’s warehouse is very relevant to the goal of reduced miles. Finding a provider that is centrally located to efficiently reach your customer base will reduce your costs and risk. Weber Logistics serves the chemical warehousing needs of many large companies who need a distribution point in California.

3) Choose a partner for present AND future needs.
Too many Requests for Proposals ask only about a 3PL’s ability to address current needs. Instead, you should anticipate your needs well into the future and look for a partner that can satisfy these requirements. This avoids the cost and risk involved in switching providers. For instance, today you may not be moving goods via rail, but you may want to exploit this lower-cost shipping option in the future. In that case, choosing a warehouse with a rail spur is smart planning. Likewise, your need today might be for simple pallet in/pallet out storage and distribution. But what if future requirements involve, for instance, repackaging 50-gallon drums into ten 5-gallon pails? Can the provider handle the job? Does the provider even want to do this kind of work?

For more tips on vetting chemical warehouse providers, read our Insight paper: Chemical Logistics: 7 Tips for Choosing a Partner for Storage and Distribution.

Too often, companies assume they have no power to impact warehouse distribution rates from 3PLs and commercial warehouse providers.

Not true. You have the power to control and reduce your warehousing costs.

An analogy might be preparation of your yearly IRS tax return. If you keep poor records and have no knowledge of allowable deductions for health expenses, business travel, and the like, you may pay more than you should. In contrast, if you keep meticulous records and have a solid understanding of IRS allowances, you’re more likely to get that fat refund.

Third party logistics providers use different warehouse pricing models to determine their costs for warehouse storage and services. But the approaches are pretty similar across providers. We all look at a variety of data, including product volume, case size, pallet size and weight.

For a primer on warehouse pricing, download our Commercial Warehouse Pricing Guide.  

To get the pricing right, we need accurate data on the account characteristics to plug into a pricing model. Understandably, shippers often can’t provide all the details requested. Here are some actual shipper responses to pricing worksheet questions:

Retailer chargeback fines for non-compliant shipments are a profit-draining reality for many consumer goods manufacturers.

Were brown suits ever in style?  Perhaps, but today they are typically not the first choice for fashionistas.  For those who don’t follow fashion trends, however, a brown suit might seem like a good option when sifting through the rack of 42 regulars at Men’s Wearhouse. 

What is logistics customer service?  Well, traditionally it has meant logistics companies focused on providing great service to their paying customers.  But lately 3PL providers are taking a vested interest in the end customer – for consumer product companies, that would be the retailer  – to make sure all delivery compliance rules are met and to learn how to make the receiving process more efficient.

For instance, in conversation with a 3PL, one retail chain asked if the following improvements could be made:

•    Punch holes in the sides of heavier boxes for easier maneuverability from dock to shelf.
•    Pick and pack orders according to category, with multiple products packed according to each aisle in the retail store.

Is your food warehouse compliant with the Food Safety Modernization Act (FSMA)?
The FSMA was signed into law in January 2011 in order to increase the FDA’s role in monitoring and policing food companies.  The gist of the law is to protect the public from real and potential health scares, and it certainly impacts food logistics and food warehouses.

Let’s face it, competitive transportation and warehouse rates are critical to earning new 3PL business.  Providers need to be ready to look for any and all efficiencies when pricing a deal, because that’s what shippers expect in their efforts to manage logistics costs.  

According to the Fall 2013 “Big Box Velocity Index” from Jones Lang LaSalle, even though just 5.5% of current retail sales are online, fully 12% of the U.S. requirements for warehouse space are eCommerce related.  The reason?  eCommerce fulfillment is increasingly moving to a one-day and same-day delivery model.  So companies, like Amazon, have to increase the number of distribution centers to get physically closer customers. 

You know the perils of food logistics. Let your guard down, and a truckload of perishables turns into an unsellable mess. Or you get stuck with racks full of canned goods nearing their sell-by date.

The right 3PL can help you avoid those pitfalls in food logistics distribution.  But how do you know which 3PL to trust with your food shipments?   Here are five essential questions every food shipper should ask.   These are covered in more detail in Weber’s new Insight Paper – Choosing a 3PL for Food Product Distribution. 

1. Can the 3PL monitor and maintain temperature integrity throughout the food logistics supply chain?   For temperature-sensitive products, a few degrees might spell the difference between a trip to market and a trip to the landfill.  Suddenly, you’re writing off thousands of dollars worth of product.

2. Can the 3PL meet all your customers’ requirements for code date compliance, FIFO and other picking rules?  While all your customers want to maximize product shelf life, each of them has different ideas about how to achieve that goal. Code date, expiration date, best used by date, FIFO, FEFO, LIFO—any of them might apply to a specific customer. And the rules might be different for different SKUs. Get the details wrong, and you could get stuck with product your customers refuse to take.

3. Can the 3PL help you reduce supply chain costs?  Marketing food products is a low-margin business. To maximize profit, you need to minimize costs, and that means making your food logistics operation as lean and efficient as possible. Your 3PL should demonstrate how it keeps that per-case cost as low as possible with smooth, efficient warehouse and transportation operations. 

4. Can the 3PL meet government requirements for tracing food shipments?  From the FDA to the USDA to the SEC, federal agencies have enacted a mass of regulations that describe how vendors of food for humans and pets must perform during a product recall. Even if nothing ever goes wrong with your product, you must be able to prove that you can track and trace any item by lot number. Companies that don’t meet government mandates can suffer significant penalties.

5. Does the 3PL have plenty of solid experience handling food products? Any 3PL can claim to have experience in food logistics, but how many transactions has the company handled, and for how many years? How many satisfied customers does it serve in the food industry? How many different kinds of food has it managed?

For more detail on these questions and how to tell the experts from the imposters in food logistics, download Weber’s new food logistics white paper.