If you’re new to logistics outsourcing or don’t have much experience navigating the process, it’s easy to make mistakes. Many companies fall into common traps that can lead to challenges down the road.
In this video, I’ll share three common logistics outsourcing mistakes and tips to help you avoid them.
Let’s talk about logistics outsourcing and the three most common mistakes I see companies make. These are mistakes that can cost time, money, and efficiency—but with the right knowledge, you can avoid them.
Poor Data Quality
When outsourcing logistics, data is critical. If you’re asking a 3PL to quote on warehousing or transport, you need to provide accurate and detailed information. Without it, they’ll make assumptions that could lead to inflated costs for you. For warehousing, supply a comprehensive product master with details like dimensions, weights, and packaging configurations. Include demand data too—ideally, 12 months of order-level transactions. This helps the 3PL design efficient picking and storage solutions based on real needs. For transport, ensure you provide delivery locations (not billing addresses) and shipping frequencies. Precise data upfront allows the 3PL to quote accurately and design a cost-effective solution.
Underestimating Timeframes
Many companies think logistics outsourcing can be wrapped up in two to three months. In reality, even a simple process can take six months or more. You’ll need time to gather data, create an RFP, identify potential 3PLs, and review responses. The evaluation phase, due diligence, and negotiation also take time. If the solution involves a new facility, you’re looking at 12 to 18 months or longer. Rushing this process increases the risk of choosing the wrong provider or missing key details. Start early, plan for six to eight months at minimum, and give yourself the time to do it properly.
Approaching the Wrong 3PLs
Some companies make the mistake of sending their RFPs to too many providers—or worse, to the wrong ones. This wastes time and damages credibility. Research your options carefully and narrow your list to four to six providers with relevant expertise. Your goal is to end up with two or three strong contenders, so focus on quality over quantity.
By addressing these three areas—data, timeframes, and provider selection—you’ll set your outsourcing project up for success.
Related articles on this topic have appeared throughout our website, check them out:
- 6 Quick Tips for Successful Logistics Outsourcing
- Insourcing or Outsourcing Logistics: Don’t Choose the Wrong Reasons
- 10 Common Pitfalls to Avoid in Logistics Outsourcing
Editor’s Note: The content of this post was originally published on Logistics Bureau’s website dated April 19, 2023, under the title “Top 3 Logistics Outsourcing Mistakes You Don’t Want to Make“.
