Executive Briefings

A More Effective 3PL-Client Relationship

Some shippers have treated their transportation providers like commodities, says Vincent Gulisano, chief customer officer of Greatwide Logistics Services, and that's not good. You can always find somebody to do a transaction, but partnering is what's key to your success.

It's no secret that capacity is a big issue in over-the-road transportation right now, and a major question for shippers is this: What do you want-a carrier or a solutions provider? The answer will turn on how you want to manage your relationships, Gulisano says. You can always find someone to do a single transaction. What you need is someone with whom you can partner, especially as things get tight. "That's key."

A solid, ongoing relationship dovetails with another concern: rising costs and what to do about them. "Mitigating cost increases is more important than reducing costs," Gulisano says. "Look at your efficiency. Am I the most efficient at managing my transportation? Not only, do I have the proper rates, but do I have the proper solutions? This is the time to look at these things. Your transportation network design is key."

Having said that, Gulisano notes that it's the mid-tier shipper who will be most affected by the capacity squeeze and rising rates. Larger shippers will be able to do things in their supply chain to mitigate the effect of higher rates; they can leverage the marketplace. The burden is on the mid-tier. But they have the opportunity to leverage the buying power of a greater entity, such as a 3PL. With one, you can take your buying power and multiply it by 10 or more times."

A 3PL relationship offers more than increased buying clout, he says. A financially sound provider will have made the necessary technology investment for optimized transportation management and visibility. "Ask yourself, do I want to invest in this technology and bring my company up to speed or work with someone else who's already doing that everyday anyway, like a 3PL?"

To view this video interview in its entirety, click here.

It's no secret that capacity is a big issue in over-the-road transportation right now, and a major question for shippers is this: What do you want-a carrier or a solutions provider? The answer will turn on how you want to manage your relationships, Gulisano says. You can always find someone to do a single transaction. What you need is someone with whom you can partner, especially as things get tight. "That's key."

A solid, ongoing relationship dovetails with another concern: rising costs and what to do about them. "Mitigating cost increases is more important than reducing costs," Gulisano says. "Look at your efficiency. Am I the most efficient at managing my transportation? Not only, do I have the proper rates, but do I have the proper solutions? This is the time to look at these things. Your transportation network design is key."

Having said that, Gulisano notes that it's the mid-tier shipper who will be most affected by the capacity squeeze and rising rates. Larger shippers will be able to do things in their supply chain to mitigate the effect of higher rates; they can leverage the marketplace. The burden is on the mid-tier. But they have the opportunity to leverage the buying power of a greater entity, such as a 3PL. With one, you can take your buying power and multiply it by 10 or more times."

A 3PL relationship offers more than increased buying clout, he says. A financially sound provider will have made the necessary technology investment for optimized transportation management and visibility. "Ask yourself, do I want to invest in this technology and bring my company up to speed or work with someone else who's already doing that everyday anyway, like a 3PL?"

To view this video interview in its entirety, click here.