Managing 3PL Relationships

Logistics View

It doesn’t come as a surprise that poor service is the leading reason why companies do not renew contracts with their third-party logistics providers, but many 3PLs believe that their customers have unrealistic expectations.

That’s why you need to do your homework before you choose a 3PL and come up with realistic goals. Accessing, selecting and negotiating with a 3PL is a time consuming process—but well worth it, because, like a marriage, switching partners is easier said than done.

Communication between both parties is key, as is establishing mutual expectations, but it’s important to give your prospective 3PL an accurate profile of your business, including product lines and volumes, as well as pallet and/or case picking requirements.

You also need to determine if the 3PL is flexible enough to handle surges and special promotions.

Once the final agreement is in place, however, you’ve only just begun the long journey together. In this issue, we look at managing 3PL relationships in “Creating A Winning Team,” [page 18]. We talked to food companies that have developed innovative programs with their 3PL providers, including shared risk management and co-loading programs. And as 3PLs acquire a deeper knowledge of their partner’s business, they help uncover other areas of optimization.

Today’s 3PLs offer more services than ever, and more food and beverage companies are taking advantage of those services for a competitive edge. Work with your 3PL to reap the benefits of the relationship.


Congratulations are in order for Safeway Inc.’s NorCal distribution center for winning our Golden Pallet Award. The Golden Pallets recognize outstanding achievements in warehousing. At 2.2 million square feet, the Tracy, CA facility is the company’s largest DC—in fact; it’s one of the largest distribution centers on the West Coast—shipping some 14 million cases each 28-day cycle.

For its outstanding success at handling such a huge volume—with a 99.9 percent accuracy rate—NorCal receives the award in the self-distributing retailer category. Find out more about this DC in “The Biggest And The Best,” [page 9].

The awards are open to all warehouses in the food industry. We look for the very best in shipping accuracy, inventory management, labor management and customer service. Two more winners will be announced later this year. If you would like to enter your warehouse, please click on the Golden Pallet button on our website, and fill out the submission form.

Again, congratulations to NorCal!

Companies in this article