How to Avoid Common Pitfalls When Outsourcing Logistics to 3PLs

ompanies are increasingly outsourcing logistics to third-party logistics providers (3PLs). The 3PL market is expected to exceed $4 trillion by 2034, propelled by globalization, eCommerce growth, technological advancements, and the increasing need for supply chain optimization, according to recent projections by Global Market Insights. 

Partnering with 3PLs frees up internal resources, speeds up fulfillment, and lets businesses scale faster without building their own warehouses or delivery network. However, while 3PL partnerships can accelerate growth, they can also be problematic if expectations, processes, and communication aren’t aligned from day one. A misstep in choosing or managing a 3PL can result in late deliveries, unhappy customers, and higher costs.

Here’s a look at how to avoid common pitfalls when working with a 3PL.

If you don’t set clear, measurable performance expectations with your 3PL from day one, it’s difficult to know whether your third-party logistics provider is helping you grow or quietly holding you back. Establish key performance indicators (KPIs) such as on-time delivery rate, order accuracy, and delivery success rate before signing the contract. Clear KPIs aren’t just about accountability; they’re about creating a shared definition of success. 

When both you and your 3PL know the exact targets, it becomes much easier to spot problems early and celebrate wins along the way. Regularly review KPIs in weekly or monthly dashboards. Monitoring performance regularly will help companies identify new challenges, adapt strategies, and continuously improve, keeping their fleets scalable, efficient, and aligned with business goals. This transparency helps companies identify their strengths and weaknesses and make necessary adjustments to optimize their resources and achieve their target objectives.

Poor system integration is one of the biggest causes of delays, errors, and frustrated customers. Even great 3PLs struggle if technologies don’t integrate well with each other. When your eCommerce store, ERP, or inventory management system can’t communicate seamlessly with your 3PL’s systems, the result is often data silos and order delays because fulfillment staff are waiting for manual uploads or email instructions.

Integrating automated systems streamlines order processing and fulfillment, speeding up the delivery process. Testing integrations before going live can help avoid delays and data mismatches. Transparency is key to fast fulfillment and delivery. Retailers and end-customers now expect up-to-the-minute updates. By integrating real-time tracking tools, 3PLs can provide retailers with dashboards showing each delivery’s exact location and status. This visibility enables 3PLs to not only improve customer satisfaction but also preempt issues before they turn into problems.

One of the most common mistakes businesses make when choosing a 3PL is focusing only on their current order volume and operational needs. This short-term view can lead to big problems and higher costs when your business grows, or during peak seasons when order spikes occur. If your 3PL can’t scale up quickly, you may face delayed deliveries during busy periods, stockouts because the warehouse can’t process incoming inventory fast enough, and customer frustration that can damage your company’s reputation.

When choosing a 3PL, it’s important to evaluate their scalability and agility. Make sure your 3PL can handle seasonal peaks, geographic growth, and product expansions without compromising service quality. Understanding how quickly they can ramp up labor, delivery capacity, and warehouse space or how they have handled peak seasons for similar clients will help you determine if they are capable of adapting to demand fluctuations quickly and meeting your business’ needs as they continue to grow. 

Outsourcing logistics to a 3PL can unlock efficiency, agility, and growth. By defining clear expectations, integrating technologies, and thinking beyond short-term needs, you can avoid the common pitfalls that derail many outsourcing efforts.

For more information about how our delivery management solution can help you manage your delivery operations more efficiently, please contact info@bringoz.com.