How to Choose a Single-Source Logistics Provider

Tags: 3PL, Logistics, Third-Party Logistics, Supply Chain

The more service providers you work with, the more likely you are to suffer gaps in your supply chain. That's why companies looking for maximum efficiency often decide to partner with a single-source logistics provider.

A single-source provider is a third-party logistics (3PL) company that manages your whole supply chain, or a discrete portion of that operation. Rather than contract individually with motor carriers, ocean carriers, drayage companies, warehouse operators or other service providers, you rely on one partner to oversee all your logistics needs.

That arrangement puts one highly capable company in charge of the myriad moving parts that make up a supply chain. You don't need to worry about slippages that might occur, for example, if a trucking company and a warehouse operator don't communicate clearly about pickups. Your partner ensures smooth operations throughout. If something does go wrong—a shipment runs late or a product gets damaged—the lines of responsibility are clear, and you know exactly who to call to get the problem solved.

Working with a single source also gives you better visibility into your supply chain: one technology platform, or one contact person, provides all the information you need. With fewer middlemen touching your freight, you save money. And because a single-source supplier has a bird's eye view of your complete supply chain, its experts can spot opportunities to cut waste and gain efficiencies. For example, your partner might pair you with another of its customers to create dedicated round trips.