By Marty Wadle, Sr. Vice President of Commercial Solutions
Transportation has often been considered a commodity. Equipment, fuel, software, and wages are all very similar from a cost perspective. So, how do 3PLs differentiate their competitive advantage? Culture is one way.
Why culture matters:
Service and supply chain information have become more important than price.
The days of selecting a 3PL based solely on price is a thing of the past. A low-cost provider may produce short-term savings but will not deliver sustainable efficiencies and the level of service shippers expect. Having the mindset of a shipper while encouraging a culture of empowerment and flexibility are the keys to developing a competitive advantage as a 3PL. Strategic partnerships that are mutually beneficial will stand the test of time and drive waste out of shippers’ supply chains. An organization’s culture is critically important to attracting talent, creating partnerships, and sustaining outstanding performance in the challenging field of supply chain management. The transportation industry is constantly changing: regulations, equipment, technology, capacity, insurance, data requirements, and service expectations. Empowering team members to solve a customer’s challenges when facing the ever-changing transportation landscape creates a team environment and leads to high retention rates. When team members know their actions positively impact a shipper’s supply chain, they are more engaged. Providing proactive notification of a late load, producing savings by combining LTL orders into a multi-stop truckload shipment, or eliminating empty miles for a dedicated resource by securing a backhaul creates a sense of accomplishment for the team member and strengthens the strategic shipper-3PL relationship.
Shippers want to do business with companies that share similar cultures.
Shippers don’t want to change their 3PL providers every three to five years. They are looking for strategic partners that are culturally aligned. Developing strategic partnerships requires both the shipper and 3PL to have similar cultures. When company cultures mesh, it is difficult to determine if the 3PL team member works for the shipper or the provider. Caring about your shipper partner’s business as if it was your own will differentiate you in the marketplace as a 3PL. Trusting a 3PL to manage all or a portion of your supply chain is a big decision—and selecting the right culturally aligned partner makes all the difference.
3PLs sustain business because they offer skills that support and compliment their strategic partners.
Culture alone won’t sustain a shipper-3PL relationship. But having a culture focused on continuous improvement along with the right people, processes, and technology is a formula for success. A flexible 3PL will customize transportation management system (TMS) software to meet the needs of each shipper partner. Managing each shipper partner’s supply chain with a dedicated team that understands the intricacies of their unique freight is a market differentiator. Implementing a TMS as shipper can be very time consuming and costly, and there is no guarantee the software will produce expected results. Quite often, shippers are dependent on third-party integrators and fail to develop in-house expertise for future configuration changes and upgrades. The right 3PL will have a team solely focused on implementation and integration yet closely aligned with operations. These team members work closely with operations and stay engaged with each customer to ensure continuous improvement.
When considering a 3PL partnership, look at the value the provider brings. A TMS is table stakes for all 3PLs, but does the 3PL provider have the right people, processes, and platform behind the software? Take the opportunity to vet your options and find a 3PL that has a culture and vision that match your own. If you are successful at that, you will have a long and mutually beneficial partnership.
Ruan has expertise in transporting and warehousing goods in every industry—and the right people, processes, and technology to meet all of your transportation management needs.
Learn more about how our family-owned, continuous improvement culture can add value to your company's supply chain.