Around the world, international logistics companies offer end-to-end quality and visibility standards to their customers, from its point of origin in one part of the world to their destination in another corner of the earth. However, to run a good global end-to-end service, they need to partner with the right local 3PL.

Here international logistics and distribution companies face an issue. They often struggle to find a local partner that matches their standards of quality and comply with their obligations with customers.

“Forging relationships with multiple suppliers” is critical for global logistics to improve their network, explains Inbound Logistics.

“Supplier A might be the main source of key products or components today. But the company also maintains an agreement with Supplier B, perhaps in another part of the world where it can deliver more effectively to certain markets. A company can ramp up Supplier B if that emerging market takes off (…).”

However, they quote an IBM survey, where 60% of chief supply chain officers around the world would face unreliable delivery, long lead times and poor quality.

When 3PL partners don’t meet expectations, “it’s difficult to standardize the logistics flow, which reduces efficiency and decreases their level of commitment to your goals.”

What to consider in choosing your local logistics partner?

1. End-to-end visibility and technology

Inbound Logistics adds that sharing service standards builds a foundation for efficient, consistent, and reliable logistics flow.

“Full visibility for each partner in your supply chain enables efficiency.”

For instance, DHL standardized its global warehousing services around the world, with shared Warehouse Management System (WMS) and Workforce Management (WFM) tools, and help it improve the accuracy of its supply chain and boost product availability.  

So, whether you’re a large freight transportation company or a mid-size supply chain supplier, the use of the right technology is critical to secure success.

“For companies trying to receive their overseas orders faster, technology that supports online collaboration can help compress lead time.”

Inbound Logistics

Logistics Management magazine adds that every business and market is different, “must deal with the real, rather than the ideal. They need to think about each developing country as an independent ecosphere, a micro-supply chain with its own variations. “

 2. A standard set of Key Performance Indicators (KPI)

It’s important to establish standard global practices to align processes and ensure consistency, according to the Journal of Business Logistics.

Look at what your target industries are looking for regarding quality. International corporations in areas such as automotive logistics set very clear expectations on reporting, visibility, and indicators they demand from their network of partners.

If your company can achieve that standard from the point of origin, are you sure your partner can deliver that at the point of delivery?

According to JOC.com, quality “needs to be defined so that the supplier and buyer understand and are in agreement (…). Poor quality affects everything downstream, most obviously, the rate of returns by dissatisfied customers”.

Standardization is essential to achieve success. Scholars from the Journal of Business Logistics explain that with globalization, “improving a company’s operational competitive advantage has become a priority.”

 A way to achieve that is through an “internal global process management and standardization.”

This isn’t easy. The scholars explain that “while it is challenging to standardize critical processes in a domestic market, it is more challenging in the global, or transnational, market.”

3. Flexible capacity to respond

Logistics Management magazine explains that the demands and environment in every different country can be highly unpredictable.

Therefore, they recommend that suppliers look at multipurpose infrastructure that includes distribution networks, warehousing operations or multimode transportation.

These can add flexibility and responsiveness, some of the key attributes of a successful emerging market operation.

4. Deep local knowledge

Make sure your supply chain partner knows its way around the country of delivery and the local business environment. 

PriceWaterhouseCoopers’ Transportation & Logistics 2030 report explains that “logistics service providers entering new markets should adapt company structures and their operations to local peculiarities.”  

“A strong local presence and the development of customized logistics business models, rather than simply transferring established standard procedures, are a necessity for success in upcoming markets.”

That’s why JOC.com adds that, if there are issues with the quality of the product, “it is much harder to address with a vendor through cultures, time zones, and geographies, than if you are meeting with a local supplier.”

The Journal of Business Logistics adds that global process management on a broad scale is hard because there is a short list of common obstacles such as language, customs, current standards, education levels, and government regulations.

5. Local trade regulation expertise

It’s not only important to know their way around the country.

At home, your supply chain company needs to set the right expectations. In turn, your local counterparts need to be straightforward on what to expect at the point of delivery.

According to a World Bank Policy Research Working Paper regulatory fragmentation tends to be very high in the logistics service industry.

“Each segment of logistics services is often restricted by a different license, such as for a customs clearing agent, trucking, warehousing, handling dangerous goods, and fire safety. This fragmentation gives logistics operators a high hurdle to provide integrated door-to-door services under their control”.

For instance, in countries like Mexico, automotive supplies or liquor needs to comply with specific customs law before delivery, and they can apply to significant tax incentives such as customs bonded warehousing.

But the right software is also critical to run this as they can help move the way through customs clearance, security compliance, and government regulation.

Is your partner helping you make the most of its local capacity?

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What is your supply chain company looking for in a local 3PL logistics provider?