COMMENT: Choosing the right 3PL for your business
Mustapha Kawam is Globe Express Services’ managing director for Gulf States and joined the company in 1995. He holds a Bachelor of Science degree in Business Marketing from the Lebanese American University and an Executive MBA from the University of Sharjah.
Logistics activities significantly contribute to the economy by adding value to the business community and the society.
The sector, a significant component of gross domestic product (GDP), is also an effective element on inflation rate, interest rates, productivity, energy costs and availability.
Logistics will enable the availability of the product look more attractive from a cost and consumer service point of view in the global village and is a key component in creating employment opportunities to meet the demand. It will help increase the employment opportunities and productivity thus decreasing poverty and contributing to the country’s gross domestic product.
In recent years, the global logistics industry has grown significantly. The sector has specifically become an important business and economic component.
The global trade-to-GDP ratio increased significantly from 19% in 1990 to 42% in 2014, with the total value of global trade in 2014 exceeding $20 trillion.
Choosing the right logistics company to support your business needs can spell the difference between meeting your customers’ requirements through efficient, cost-effective distribution of products and falling short of their expectations through careless, wasteful handling of them.
The following criteria must be taken into consideration before outsourcing one’s logistics requirements:
• A good cultural fit – choosing a service provider that is congruent to an outsourcer’s company culture ensures seamless communication and smooth process implementation. Since outsourcing is about people, it is imperative to have not only skilled, experienced workforce but also to employ those who can respond to emergencies and challenges with cool-headed judgment and decisive action.
• Reputation – careful research on the logistics company’s operations and financial and market standing, among others, to guarantee if it can deliver on its commitment.
• Prompt attentive service – a logistics company should also be known for its prompt and timely service to preserve the outsourcer’s own reputation.
• Collaborative border management – check the company’s efficiency and compliance with customs and border management clearance requirements.
• Competitive pricing – look out for competitively priced shipments and proven track record of time management and dependability. A cheap rate does not weigh much if the delivery of products is delayed. A logistics company must provide flexible solutions and applies a tailored approach to suit an outsourcer’s specific situation.
• Quality of logistics services – determine if the logistic company has the capabilities and expertise to handle all levels of services.
• Updated technology – ensure that the company has an advanced IT system in place such as providing real time updates on tracking and tracing the consignments.
• Geographic desirability – having a network of domestic and international offices is a competitive advantage.
With so many choices out there, narrowing your search and finding the right logistics provider is truly a challenge. The above criteria, however, will help narrow down the search. It is imperative to develop a realistic implementation and work schedule that both parties can adhere to and leave the nitty-gritty business of moving freight to the experts.