New to logistics outsourcing or unsure about the process? You’re not alone.

Many businesses encounter similar challenges, leading to common mistakes.

This video highlights frequent pitfalls in logistics outsourcing and offers practical advice to steer clear of them.

 

 

Logistics outsourcing is a topic I discuss frequently because I’ve seen so many companies make costly mistakes during the process. Whether it’s the customers or the logistics providers themselves, mistakes can happen at any stage. In this video, I focused on three of the most common errors I see companies make when outsourcing logistics, specifically from the perspective of the customer. Understanding these mistakes will help you avoid them and set you up for a more efficient and cost-effective outsourcing journey.

 

Inaccurate or Insufficient Data

 

When you approach a 3PL for a quote, one of the biggest mistakes you can make is not providing enough detailed data. This can lead to a misaligned solution and inflated costs. If you’re outsourcing warehousing, you need to provide accurate information about your products, including weights, dimensions, packaging details, and how your products are handled. For instance, what’s the weight of a carton? How many layers fit on a pallet? These details help the 3PL design a storage solution that’s not only efficient but also cost-effective. The second key data set is demand data, which tells the 3PL about order frequency, picking needs, and labor requirements. This includes things like how many orders you typically process in a day, how many SKUs are in an order, and how large those SKUs are. It’s important to provide 12 months’ worth of transactional data to give the 3PL a clear picture of your operational needs. Without this, they’ll be forced to make assumptions that will likely lead to higher-than-necessary costs.

 

Underestimating Timeframes

 

Many companies drastically underestimate the time required to complete a logistics outsourcing project. They assume it can all be wrapped up in just a few months. The reality? It usually takes much longer. From gathering the necessary data, preparing RFPs (Request for Proposals), and reaching out to 3PLs, to evaluating responses and negotiating terms—this process takes time. A straightforward project can take six months, and if you’re building or moving to a new facility, it could take a year or more. If you rush the process, you risk choosing the wrong provider or not getting the solution that best meets your needs. It’s better to start the process early and allow for a realistic timeframe—six to eight months, ideally.

 

Approaching the Wrong Providers

 

The third mistake is approaching the wrong logistics providers. It’s easy to get overwhelmed and reach out to too many 3PLs, but this can waste time and energy. Focus on a select group of providers—four to six at most. Make sure they have the expertise that fits your specific requirements. The goal is to end up with two or three strong contenders. Do your research and ensure that the 3PLs you approach are experienced in your industry and capable of delivering the solution you need.

By avoiding these three mistakes—poor data, unrealistic timelines, and the wrong provider selection—you’ll ensure a smoother logistics outsourcing experience.

 

Related articles on this topic have appeared throughout our website, check them out:

 

Editor’s Note: The content of this post was originally published on Logistics Bureau’s website dated April 19, 2023, under the title “Top 3 Logistics Outsourcing Mistakes You Don’t Want to Make.