Dynamic 3PL Blog


5 Reasons Food Companies Fire Their 3PL

Posted by Danny Rimkus on Mar 18, 2016 3:07:06 PM

you are fired

Building and maintaining a business relationship is a long and trying process. The food industry is certainly no exception. Food shippers demand –not only trust– but value from their 3PLs. Is that not why logistics are outsourced in the first place? Here are some of the pitfalls that can cause a 3PL/Shipper relationship to spoil faster than a misplaced pallet of grapes.

  1.  Chargebacks – When a food shipper designates a 3PL to handle their product, that customer carries a certain expectation that the particular rules, regulations, and schedule required for the freight will not be neglected. These are the exact compliance worries that a 3PL is brought in to alleviate. When a shipper is hit with unforeseen charges due to the careless mistakes of the 3PL, it should be no surprise when the shipper extracts what it considers to be a parasite and explores a more symbiotic relationship with a new 3PL.
  2.  Inventory Loss Write-Offs – The misplacement of freight in storage conveys an alarming lack of oversight. Poorly managed storage facilities not only impact the bills, but also the reputation of the 3PL. Today’s food shippers, more than ever, need to feel assured that the integrity of their brand name is upheld. 3PLs that do not keep a sharp eye in the sky over their inventory will be fired faster than “The Donald” himself can utter the words.
  3.  Not a One-Stop Shop – Passing off tasks from one entity to the next means weaker business relations, greater risk of damages, and a blind spot in regards to accountability. Food shippers hire a 3PL to remove the hassle from their own end. When using different suppliers for storage, transportation, and packaging, not only is it a hassle – it drives up cost, requires additional handling, and ultimately wastes time. By offering a multifaceted and dynamic slate of services, a savvy 3PL provides coverage for every logistical need of the shipper, such as repackaging or clean room services. When dealing with food products, unforeseen requirements (or opportunities) are bound to arise, so today’s food companies are looking to streamline their supply chain by hiring 3PLs that can fulfill all logistics needs in a safe, sanitary, expeditious, and efficient manner.
  4.  Lack of Food-Grade Certification – Cleanliness is an absolute must for any pusher of food products. But what is cleanliness without the proof to show for it? Shine like a whistle all you want. The important part is documenting those efforts by meeting the standard SQF (Safe Quality Foods) codes under the administration of the FMI (Food Marketing Institute). The Food Safety Modernization Act has been rolling out the past few years and it will ultimately compel food companies to only hire SQF Compliant 3PLs throughout the entire supply chain.
  5.  Inability to Grow – A growing company needs its logistics partner to not only keep up, but stay ahead of the game. If the 3PL has no headroom for its scope of services then a more progressive and accommodating 3PL will show up to eat its lunch. Maintaining on par may keep you around for a while, but putting for eagle will ensure your invite to the next outing.

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