How to Pick a Great 3PL Provider for Your Business
Choosing the right third-party logistics (3PL) provider can make or break your supply chain. A strong logistics partner helps you deliver on time, reduce costs, and scale with confidence. But with so many options, how do you know which 3PL is the right fit?
This blog will walk you through how to screen and assess 3PL providers. You’ll learn what to look for, what questions to ask, and how to make a smart, informed choice for your business.
What Does a 3PL Do
A third-party logistics provider (3PL) manages warehousing, transportation, and order fulfillment on behalf of your business. These services include storing inventory, picking and packing orders, and handling shipments to your customers.
Many 3PLs also offer support for returns (also known as reverse logistics), freight brokerage, and value-added services. Some providers focus on specific industries—PiVAL, for example, has experience handling specialized goods like tires and paper rolls.
The logistics industry also includes 4PLs and 5PLs, which operate at broader levels. A 4PL coordinates multiple 3PLs and manages supply chain logistics across the board. A 5PL aggregates logistics networks to support complex distribution.
Factors to Consider When Choosing a 3PL
Choosing the right 3PL requires more than comparing rates and capabilities.
You need to evaluate a number of factors including:
- Location
- Reliability
- Experience
- Specialization
- Flexibility
- Communication
- Technology
- Certifications
A provider must not only meet your immediate needs but also support your long-term growth. When logistics break down, your customer experience suffers and your brand reputation takes a hit.
Finding a 3PL with the right mix of infrastructure, process discipline, and industry knowledge gives you a stronger foundation as you scale.
Warehouse Locations
Warehouse proximity directly affects your shipping costs and delivery speed. When a 3PL has facilities near your manufacturing site, it shortens inbound freight routes and lowers transportation costs, and reduces the chances of downtime or shutdowns.
If warehouses are also close to your customer base, delivery becomes faster and more cost-effective. These location advantages help you improve fulfillment timelines and improve customer satisfaction.
PiVAL has warehouses located in major hubs like:
Reputation
Reputation helps you judge a 3PL’s reliability before you commit. Look at client reviews and ask for references, especially from companies in your space.
A provider with strong relationships and proven service to major retailers—such as Costco or Walmart—likely meets strict delivery standards. Long-term customer retention also suggests that the provider follows through on its commitments.
Years in Business
An experienced 3PL has seen and solved more logistics problems than a newer provider. Years in the industry often lead to stronger networks, better-trained staff, and mature systems that support consistent service.
Look for a provider with a long track record in logistics, as they’re more likely to handle challenges without disruption.
Experience in Your Industry
Industry-specific experience gives a 3PL an edge in handling your products properly. If your items require special handling, compliance with safety protocols, or adherence to customer packaging rules, a 3PL familiar with your industry can meet those needs without steep learning curves. You’ll also spend less time explaining requirements and troubleshooting basic issues.
PiVAL has experience in a number of industries, including specialization in:
Specialization and Equipment
Not every warehouse or carrier setup suits every product or industry. You need a 3PL that has the equipment and infrastructure to handle your goods safely and efficiently.
This might include refrigeration, heavy-lifting tools, or secure storage. PiVAL, for instance, serves sectors like automotive, retail, construction, and pulp and paper—each requiring tailored handling and tools or equipment. Matching your needs with the provider’s capabilities helps avoid service gaps.
Scalability and Flexibility
Business needs change, and your 3PL must be ready to scale with you. Whether you’re launching a new product, handling seasonal spikes, or expanding into new regions, your logistics provider must adjust capacity and process quickly. A flexible 3PL supports your growth without forcing a major transition.
Communication and Customer Service
Strong communication makes logistics smoother and prevents issues from escalating. Look for providers who are responsive, clear, and organized in how they work with you.
Ask if you’ll have a dedicated account manager who understands your business and follows up consistently. You also need visibility into performance, so make sure the provider offers reliable reporting and updates. Look for a 3PL that will provide you with regular touchpoints and processes for continuous service improvement.
How to Assess the Quality of a 3PL Provider
Before committing to a 3PL, you need to evaluate their service quality, operational standards, and client base.
One of the best ways to do this is to ask, “Who do you work with?” This helps you gauge their experience with companies similar to yours and gives insight into how well they understand your logistics operations.
A warehouse tour is also a strong indicator of quality. Clean, organized, and well-run facilities usually reflect how seriously the provider treats your products and your customers. During your visit, look at how inventory is stored, how staff operate, and whether safety protocols are in place.
Ask about certifications and compliance. Some industries require specific standards for handling, packaging, or documentation, and a good 3PL should already meet them. Request copies of relevant certifications if your products fall under regulated categories.
If you require strict processes you can look for a 3PL provider that is ISO 9001 certified.
Review the Service Level Agreements (SLAs) during onboarding discussions. A clear SLA outlines timelines, responsibilities, key performance indicators (KPI), and accountability. This helps you avoid grey areas and holds the provider to measurable expectations.
System integration and onboarding also show how prepared a provider is to work with your business. Confirm how they handle the transfer of data, link systems such as WMS and TMS, and coordinate with your team.
Ask if the provider owns their own assets or contracts external carriers. If they use third-party carriers, understand how they select and monitor them. PiVAL, for instance, uses a Carrier Scorecard to track performance and applies a consistent Carrier Policy to maintain quality.
Be sure to assess:
- Ask who they serve and whether they’ve handled customers like yours
- Visit their warehouse to check cleanliness, safety, and organization
- Confirm certifications for industry and/or product compliance
- Review Service Level Agreements during onboarding
- Understand their system integration process
- Find out if they are asset-based or use external carriers
- Ask how they vet and manage carrier performance
Should You Go for a Cheaper 3PL or Pay Extra?
Choosing a low-cost 3PL often looks appealing at first but usually leads to higher costs over time. Providers who cut corners in process, staffing, and technology can’t keep up when volume increases or unexpected issues arise.
Cheap 3PLs tend to have hidden costs. These often come in the form of late shipments, damaged products, customer complaints, or the need to rework broken processes. Eventually, you may have no choice but to switch providers—something that adds downtime, expenses, and risk.
Switching from one 3PL to another is rarely simple. You’ll have to transfer data, retrain staff, adjust customer expectations, and often rebuild performance standards. This process demands time and coordination and affects both your internal team and your customers.
If you underinvest in logistics, the damage often shows up in customer experience. Late deliveries, bad tracking, or damaged goods hurt your brand. Customers don’t separate shipping from your product—they see the entire experience as one.
You either pay for quality upfront or pay for problems later. A 3PL that charges more may offer cleaner operations, better technology, stronger staff, and more stable performance. These all protect your brand and reduce risk.
The risks are:
- Low-cost 3PLs usually lead to quality problems and hidden costs
- Failures with cheap providers can force an expensive switch
- Transitions between 3PLs add cost, time, and disruption
- Weak logistics damage your customer experience
- Paying more often means fewer long-term problems and stronger service
Red Flags to Avoid When Choosing a 3PL
Certain warning signs during your selection process often point to deeper issues. A disorganized or poorly maintained warehouse is one of the most visible indicators. If the facility looks chaotic, it’s likely your products will be handled the same way.
Avoid providers who are vague about what’s included in their service or who don’t offer written service agreements. Without clear terms, you have no way to hold them accountable when things go wrong.
Lack of process around damage claims or lost shipments is another issue. A good 3PL will have a clear method for resolving issues and compensating for loss or error.
You should also question any 3PL with limited or no experience in your industry. While general logistics skills are helpful, industry knowledge makes a difference when handling specialized products or following strict delivery standards.
Recurring issues such as late shipments, missed pickups, or customer complaints are strong signs that service will not improve. You can often find these patterns by asking for references or checking online feedback.
A lack of clear communication is another serious issue. If the provider can’t assign a dedicated account manager or struggles to give you timely updates, your day-to-day operations will suffer.
Finally, look for reporting tools. If the 3PL can’t provide basic performance data, you’ll lose visibility and control over your logistics chain.
Watch out for:
- Dirty, disorganized warehouses signal poor operational standards
- Vague service agreements leave you exposed to risk
- No clear process for lost or damaged shipments is a concern
- Little or no industry experience raises reliability issues
- Frequent service failures show deeper performance problems
- Weak communication and no account manager create coordination issues
- Lack of reporting tools limits your ability to monitor performance
What Will Onboarding Look Like?
Once you finalize Service Level Agreements (SLAs), onboarding with your 3PL begins. This step lays the groundwork for how your logistics will run, so it’s important to get it right from the start. The process typically starts with an introductory call to meet your provider’s team, align on expectations, and review roles and responsibilities.
You’ll then move into a detailed process review. This covers inventory, SKUs, inbound and outbound flows, packaging standards, and who your main contacts will be. Both sides need to agree on how information will be shared and how exceptions will be handled.
System integration is also a key step. The 3PL will connect their Warehouse Management System (WMS) and Transportation Management System (TMS) with your internal systems. A provider with strong tech capabilities will guide this process clearly and help troubleshoot issues.
You should expect regular performance reviews. At PiVAL, these include 45-day, 90-day, and quarterly check-ins. These reviews help track service levels, raise any concerns early, and adjust processes if needed.
Some admin work is required from your team. This includes setting up product data, confirming shipping preferences, and sharing supplier contacts. The better prepared you are, the smoother the onboarding will be.
Steps to onboarding are:
- Onboarding starts after SLAs are signed
- First step is an introductory call to align teams
- Review logistics processes, contacts, and handling rules
- EDI integration of WMS and TMS systems with your internal tools
- Expect structured performance reviews at set intervals
- Be ready to provide data and participate in setup tasks
How Do You Transfer Your Logistics to the New 3PL?
A well-managed transition limits risk and avoids disruption to your supply chain. Start with a clear plan that includes timelines, responsibilities, and backup steps. Without a plan, even a good provider will struggle to deliver a smooth handoff.
Inform all affected parties early. Your suppliers, internal teams, and customers need to know about the change. When everyone understands the switch, they can adjust schedules, update records, and reduce confusion.
Ensure your data is ready before the cutover. This includes inventory lists, order history, shipping rules, and packaging details. A 3PL can only run efficiently if your information is accurate and complete.
Run a test phase before going live. A pilot shipment or partial rollout helps uncover gaps without exposing your entire business to failure. Adjust the process based on results before scaling up.
Once live, monitor closely. Watch service levels, order accuracy, and communication. Be ready to jump in if something goes off track.
Prepare your team. Train staff on new workflows and assign someone to manage the relationship day-to-day. Internal ownership helps the 3PL succeed.
Steps to transferring are:
- Build a detailed transition plan with clear timelines
- Communicate the change to suppliers, staff, and customers
- Share accurate product and shipping data in advance
- Run a test phase before going fully live
- Monitor service closely in the first weeks
- Train your team to work with the new provider
When Should You Work with a 3PL?
You should consider a 3PL when internal logistics slow your growth or stretch your team too thin. Many businesses wait too long to outsource and end up paying for delays, errors, or capacity issues that hurt customer experience.
If fast shipping, tight margins, or high volumes define your operations, a 3PL helps you handle complexity. These providers already have systems in place to manage fulfilment at scale.
You may also need a 3PL when you expand into new regions or start selling through new channels. A provider with nationwide coverage or cross-border experience makes this easier and faster.
If your warehousing or delivery costs keep rising, outsourcing can lower fixed costs. A 3PL offers shared infrastructure, which means you pay for what you use—not for what sits idle.
When you need compliance support—whether for retail routing guides, safety standards, or temperature control—a 3PL with industry experience adds stability and peace of mind.
Seasonal businesses benefit too. A flexible provider helps you scale up during peak periods and scale down without carrying year-round overhead.
When you should outsource to a 3PL:
- Outsource when internal logistics limit growth or cause delays
- Use a 3PL to handle high volume, speed, or complexity
- Leverage a provider when entering new markets or channels
- Lower warehouse and delivery costs with shared infrastructure
- Tap into industry expertise for compliance and standards
- Manage seasonal demand without permanent overhead
Benefits of Outsourcing to a 3PL
Outsourcing logistics gives your business access to infrastructure, experience, and systems that would take years to build in-house. While not every company needs a 3PL, most growing businesses benefit from handing off logistics to a focused provider. Here are the main reasons why:
- Reduce overhead by eliminating the need to lease or operate your own warehouses.
- Access skilled staff, trained to handle complex shipping and warehousing tasks.
- Benefit from advanced WMS and TMS platforms without managing them yourself.
- Improve delivery times by tapping into regional and national distribution networks.
- Scale quickly to meet seasonal or unexpected demand spikes.
- Focus your internal team on product, sales, and growth—rather than shipping problems.
- Strengthen customer satisfaction with faster, more reliable fulfilment.
- Lower your risk by working with a provider that already meets industry standards.
PiVAL is Here to Help with Your Logistics
PiVAL offers full-service logistics support tailored to the needs of Canadian and cross-border businesses. We coordinate entire supply chains, integrate with systems, and manage multiple carriers on your behalf.
Our team supports a wide range of industries, including automotive, manufacturing, construction, pulp and paper, and retail suppliers.
From system integration and dedicated account management to regular performance reviews, PiVAL focuses on reliability, communication, and scalable service.
If you’re looking for a partner that can keep pace with your growth and simplify your operations, we’re ready to support you.
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