What It Really Takes to Establish a Successful 3PL Relationship

With a quick web search, you can find plenty of articles on how to make a 3PL partnership successful. Certain keywords are common among most of them, such as key performance indicators (KPIs), open communication, service-level agreements (SLAs), well-written contracts, and proper onboarding—to name a few!

And, we agree! All of those things are important. But overemphasis on these terms means it’s easy to underplay what makes them actually work: a well-managed relationship.

With decades of forging genuine partnerships under our belt, we have identified three foundational steps to create relationships that go the distance:

• Thorough onboarding

• Meaningful metrics

• Candid communication

Within these foundational steps, there are key relationship-building strategies that foster trust and set realistic expectations from the outset, ensuring both parties are on the same page.

Let’s dive in!

Step #1: Thorough Onboarding

Cursory onboarding is like a fast-food diet; while the food is convenient and can provide short-term comfort, it is a weak foundation for long-term trust, partnership, and value creation. But, with a thorough onboarding, retailers can expect a smoother launch, happier customers, and cost-effective strategies.

For example, with a deep understanding of a merchant’s pick & pack process, a 3PL can train their associates and help them understand the retailer’s specific product handling requirements, packing standards, and quality expectations. This level of training is essential in reducing errors that could lead to order inaccuracies, damaged goods, or delayed shipments.

Additionally, comprehensive onboarding allows both parties to dive deep into the retailer’s order volume and customer demand patterns. By collaborating closely during the onboarding phase, they can establish robust processes tailored to meet demand and scale operations seamlessly during peak or promotional periods, ensuring customer orders are fulfilled accurately and on time.

Moreover, a thorough onboarding process enables the 3PL to offer strategic insights that can lead to significant cost savings. As they familiarize themselves with the retailer’s operations, the 3PL may identify opportunities to optimize packaging solutions, select more cost-effective shipping carriers, or streamline the overall supply chain.

Step #2: Meaningful Metrics

While common distribution measures like on-time shipping, order accuracy, and cost per order are essential for evaluating the performance of a 3PL, they don’t always capture the full picture of a partnership’s success. Metrics, while invaluable for tracking progress, can sometimes overshadow the human element of collaboration.

When metrics are misused—such as to assign blame or force cost reductions—they can strain the relationship, fostering an environment of distrust and defensiveness. This overemphasis on numbers can lead to a breakdown in communication, making it harder for both parties to work towards mutual goals.

In contrast, establishing meaningful metrics and personal relationships helps foster a healthy partnership. These interactions go beyond the limitations of data, allowing both the retailer and the 3PL to address concerns, brainstorm solutions, and explore opportunities for improvement that may not be immediately evident through metrics alone.

By fostering open dialogue and mutual understanding, personal relationships can bridge the gaps that metrics might miss, leading to a more resilient and adaptable partnership. In the end, it’s the combination of both quantitative metrics and qualitative relationships that creates a balanced, effective 3PL relationship.

Step #3: Candid Communication

Every company wants to put their best foot forward. But sometimes that leads to hiding less-than-flattering details, such as:

• Operational challenges
• Technology limitations
• Performance issues
• Employee mistakes

But, the only way to create a truly healthy and fruitful 3PL relationship is honest communication about current capabilities, limitations, and when things go wrong. When 3PLs are transparent about their limitations or errors, it creates opportunities for collaboration and problem-solving.

For example, if a 3PL acknowledges a gap in its technology capabilities, this can spark discussions about developing a custom integration for a customer. This collaborative approach addresses the immediate issue while strengthening the partnership by demonstrating a commitment to continuous improvement.

Similarly, when mistakes occur, openly discussing them allows both parties to assess and refine standard operating procedures. This process can lead to more effective task performance. By working together, the retailer and the 3PL can create a resilient and adaptable operation, better equipped to handle future challenges.

How WSI Enables a Seamless 3PL Relationship

Collaborative onboarding

​​WSI strives to make onboarding a collaborative and personalized experience. We assign every new customer a dedicated onboarding manager, and the collective teams work together to deeply understand requirements and seek out opportunities to create value. We ask a lot of questions to gain a complete understanding of a shipper’s business and strategy.

To this point, we request all new customers provide a six- to 12-month order history to study product flow and check dimensions on all SKUs to optimize carrier and box selection. A recent analysis for one new customer revealed that their prior shipping cartons had excessive void space and were slightly too large to maximize carrier discounting. Optimizing box types generated a 15% reduction in total shipping cost.

Customized reports

During onboarding, we work hard to understand what metrics are meaningful to a customer’s business. For instance, we created custom data elements to enable automated carbon reporting for each order for one company that expressed a deep committment to a sustainable supply chain.

We collaborate with our customers to ensure our metrics are aligned with business strategy and support quality, service, cost, and customer satisfaction improvement. Then we use those metrics as a touchpoint in ongoing, regular communication.

Customer-first approach

WSI takes proactive steps to cultivate enduring partnerships. We assign dedicated account managers to each customer because we know that’s the very best way to build relationships, ensure frequent and timely communication, and understand customer needs so that we can identify opportunities to add value.

To illustrate, we had one potential customer inquire about 3PL services in Chicago. Parcel cost reduction was a primary objective. The company provided an order list and requested that we provide parcel rates from Chicago.

WSI provided the requested rates, but we also opted to provide rates if those same orders were to ship out of other nodes in our network on the East and West coasts. We determined that a multi-node strategy would reduce parcel cost by 15-20%. We brought this customer onboard within 12 weeks.

Relationships are Core

Customers work with 3PLs because that partnership has the potential to optimize distribution and fulfillment, reduce costs, and increase customer satisfaction. It is natural to enter the relationship focused on how to maximize and guarantee value. SLAs, contractual obligations and incentive structures help establish expectations and promote excellence.

These mechanisms serve an important purpose; however, they are a very poor substitute for human connection, open communication, and synergy. At WSI, we establish this solid foundation to ensure every customer relationship is truly collaborative, personalized, and successful.

Ready to start your journey to a seamless 3PL relationship? Get in touch with one of our fulfillment experts today.