Thoughts on Selecting
3PL Transportation
Spend Management Service Providers

by Mike Starling

Transportation Trade Rags frequently sprinkle 3PL service vendor marketing and sales pitches disguised as informative cost savings/expense reduction “10 TIPS” articles. I just read one that proposed ten tips for keeping shipping costs in check. Think you could come up with a list of ten ways to control or reduce your freight spend? YEAH! ME TOO! Maybe even more than ten!

This particular article was authored by the CEO of a Transportation Spend Management company laying out a list of ten things you can do to keep your transportation spend management under control. The topic is certainly important, as I recalled the results of Inbound Logistics’ eighth annual 3PL market research report, which says the number-one concern of shippers today is “cutting transport costs.”

So, I did a little research on the author’s background and determined he was another of the plethora of UPS and FEDEX alumni hawking freight-cost reduction via 3PL transportation spend management programs. There are a TON of these guys out there, God bless them. Hey, some of my best friends are ex-UPS and FEDEX sales guys. But they are all somewhat myopic in their transportation modal focus and experience.

While I personally have nothing against former small package company employees looking to help clients fight their overbearing and intimidating former employers by working to blunt the never-ending GRIs and slight-of-hand assessorial pricing tactics (not to mention their DMV-like, client-focused claims management services), the fact remains that the vast majority of the 3PL Transportation Spend Management companies in the marketplace today are staffed with former small-package or other mode carrier sales or finance employees with no real shipper multi-modal operational experience!

You ask, "So, what?" Well, think about it. Do you want to engage a 3PL Transportation Spend Management service provider:

A. Who never sat on the shipper’s side of the desk?

B. Whose primary area of expertise relates to a single mode (i.e., small package – parcel)?

C. Who spent their entire career focused on selling a single transportation mode?

Or, would you rather engage a 3pl Transportation Spend Management service provider:

A. Who sat on the shipper’s side of the desk for their entire career?

B. Who was in charge of finding and executing ways to control transportation operating budgetary expenses?

C. Who has expertise and experience with ALL MODES of Transportation?

D. Who has led and directed RFQ–RFP processes as a part of their role working in a shipping organization?

E. Who understands all the other organizational concerns and pressures outside the transportation area that need to be taken into account as a part of your overall transportation network strategy and tactics?

F. Who understands and can provide a whole lot more insight, input, and instruction on those things that impact operating expenses that go beyond the narrow focusing of freight cost reduction?

So, if you are one of those “shippers” who fits the profile of our Inbound Logistics magazine survey mentioned above, next time a Transportation Spend Management sales person pays you a visit, why not ask what their industry background experience was?

Worked for a carrier? Shipper beware!

Worked for a Small Package carrier? RUN!

Working for a shipper? Bingo! Have a conversation! No need to reinvent the wheel. Learn from their experience! Benefit from their expertise!

Now you have found someone who understands where you are coming from and where you want to go, and can help you get there… and beyond! Quickly! Efficiently! And effectively!

NEARSHORING TREND

Transportation Spend Management – It’s MORE than LOW HANGING FRUIT!