Managing 3rd Party Logistics (3PL) Service Providers – Key Success Factor # 2 – Clearly articulate service level expectations

It is important that service level expectations are clearly articulated.

There should also be a differentiation between your standard requirements and any non-standard requirements. Even if 99% of your orders are dispatched as standard shipments you should still have all potential non-standard service requirements included in the scope of work and in the costing schedule.

Not defining the potential non-standard service requirements provides an opportunity for the third party logistics (3PL) service provider to charge a premium for the service. Non defined services are usually charged at the services providers’ highest rate, as opposed to a rate that is in line with what has been negotiated for known services.

Domestic transport companies are notorious for charging high rates for consignments from combinations of origins and destinations that have not been included in the schedule of quoted rates.