When searching for third-party logistics companies (3PLs), it may help to take a structured approach for sifting through and analyzing all of your options.
This guide provides you with common criteria for selecting the best 3PL companies, along with lists of questions you can ask to find the right one for your business.
3PL fulfillment company fit
Discovering which third-party logistics provider serves your exact needs depends on factors such as your business evolution, product categories, specialized services, customer geographies, etc.
Take a look at the categorized third-party shipping companies below and jump to any section that you think might fit with your business.
Ecommerce 3PL companies
Ecommerce fulfillment services streamline your warehousing and shipping processes to make sure your customers get the right items delivered quickly. You may be able to optimize costs and get help with inventory management, too.
FBA 3PL companies
FBA 3PLs can help you integrate with Fulfillment by Amazon (FBA), the marketplace’s extensive logistics network. They can also act as an alternative to FBA, providing fulfillment services while still capturing the massive potential of the platform.
Cold chain 3PL shipping companies
Cold chains involve precise management of temperature-sensitive products, so a 3PL makes sure you maintain controlled environments across your supply chain. You can also partner with a 3PL to satisfy the high recordkeeping requirements these products typically involve.
Alcohol third-party fulfillment company
Alcohol fulfillment companies help you navigate complex regulatory landscapes, ensuring licensing compliance across states. You may also benefit from distribution services with specialized security since alcohol may be at high risk for cargo theft.
3PL companies USA to Canada
Some 3PLs are set up to help with cross-border logistics and distribution services, including customs clearance, tariffs, and international regulations. They may also provide bilingual support.
When to look for new 3PL fulfillment companies
There may be key moments in your business evolution when you need to consider hiring 3PL shipping companies. Typically, these moments center on growth. Either you’re starting up and need to scale rapidly, or you’re experiencing high demand and need a partner to help you keep up.
In both cases, the best 3PL companies are ready to hit the ground running, making sure you maintain high levels of speed and accuracy while gaining cost efficiencies.
Startup ecommerce 3PL companies
This early stage is often marked by intense workloads, fixed resources, and limited expertise. It’s not that you don’t know what you’re doing. You just might not be generating sustained revenue or collecting substantial data yet.
In this case, you need a 3rd party fulfillment company that can provide you with streamlined services. You want to focus on reducing the complexity of warehousing, order processing, and shipping.
At this stage, low packing and shipping costs may be a deciding factor, too. You may want to find a 3rd party fulfillment company that lets you pay by unit or transaction, so you can scale costs against business activity.
Growth-stage third-party logistics company
As ecommerce businesses tap into demand, working with a 3PL fulfillment company can streamline logistics and boost scalability.
Outsourcing ensures effective handling of order surges and provides supply chain solutions, including inventory optimization and demand forecasting.
The transition from in-house operations to 3PL a partnership may be a pivotal step in your company’s growth. The agility and scalability provided by the best 3PL companies can help you seize market opportunities, expand your customer base, and increase revenue.
What services do top 3PL companies provide?
A third-party fulfillment company can play a critical role in supply chain logistics for many ecommerce businesses. Primarily, services include receipt and storage of inventory in multiple warehouses, order fulfillment, and shipping products to customers.
- Receiving: A third-party logistics company accepts and inspects incoming shipments to a warehouse. You can have your suppliers send inventory directly to your 3PL.
- Warehousing: A 3PL stores and manages inventory, ensuring organization and accessibility, so products remain in perfect condition and can be packed efficiently when customers place orders on your online store.
- Order fulfillment 3PLs pick, pack, and ship items to fulfill customer orders accurately and efficiently.
- Shipping: 3PLs coordinate transportation of packages to your customers. Shipping speed and accuracy are important drivers of customer satisfaction, so this key function is vital to your company’s success.
- Reverse logistics: A third-party logistics company might also handle customer returns, refurbishing and restocking or disposing of products as needed. Returns can eat up profits, so an experienced returns partner may help protect margins.
In addition to these core capabilities, the best 3PL fulfillment companies may also offer a variety of value-added services. These services may help your business by reducing in-house effort so you can reallocate resources for growth.
- Freight forwarding services: A third-party logistics company may coordinate or negotiate pricing on more extensive transportation services, including movement of inventory from coastal ports of entry to inland warehouses.
- Kitting and assembly: 3PLs may assemble parts into products or multiple products into subscription kits or promotional bundles. These services may also include returning single items to inventory.
- SKU analysis: As part of your inventory optimization, this analysis helps your company understand the timing or demand curves of each item so that you can reduce carrying costs, fine-tune supplier orders, and discover product introduction opportunities.
- Demand forecasting: This critical function aids in predicting product demand based on historical data and market trends, allowing for more informed inventory management decisions.
When looking for the best 3PL companies, assess which of these services may benefit your business to help narrow your options.
Why do you need a 3PL fulfillment company?
In addition to the services you need, consider why and how 3PL shipping companies can benefit your business to help refine your search further.
You need to do more faster
This is a common scenario when your store is struggling to meet growing demand. The best 3PL for ecommerce growth already has infrastructure for high throughput. You can onboard quickly because you’re ready to go in some important ways, including:
- Solid processes and data to back up their efficacy.
- Staff are experienced with structures to ensure labor availability.
- Onboarding won’t slow you down or keep your customers waiting on orders.
With these structures in place, you can eliminate the need to tie up cash growing in-house fulfillment operations at your company.
You need to spend less time on fulfillment
You know fulfillment is crucial, but you’re spending too much time managing it. In this case, the best third-party shipping company frees you up to allocate resources more appropriately. They might do this in a number of ways.
- A good 3PL provides high-quality data so you can discover growth opportunities.
- Warehouse teams take on high-labor tasks so you can focus on strategy and execution.
- Fulfillment experts may act as an extension of your team, helping to support efforts like inventory management, product launches and various go-to-market activities.
- Warehouse managers can help you understand turnover and support ongoing inventory optimization. This lets you align marketing with product flows.
When your third-party logistics provider helps with advanced supply chain management, you can focus on ecommerce leadership.
Making the case for fulfillment expertise
Nearly every startup, growing company, large business, and enterprise-level ecommerce business could benefit from fulfillment expertise. No matter what stage your business is in, there’s a good chance you could use the following support:
- High accuracy and efficiency metrics you can monitor in real time
- Long-term relationships with various carriers for reliable logistics services
- The right data to optimize landed cost across shipping zones
- Specialization for temperature-controlled or heavy products as needed.
Another great thing about expertise is that it can help deliver cost savings and operational efficiencies. You may not have the volume or staff members available to help assess cost effectiveness, but great 3PL logistics companies do.
4PL vs. 3PL logistics services
For many businesses, engaging a fourth-party logistics provider (4PL) is a strategic move that helps them navigate the complexities of fulfillment and logistics services.
What is a 4PL?
A 4PL is a consultant that goes beyond the typical operational scope of a 3PL.
While a third-party logistics provider primarily handles physical logistics and transportation, a 4PL may act as a coordinator. They may take on responsibilities like strategic planning, international shipping, coordination with multiple 3PLs, and logistics optimization.
A 4PL may also help identify and collaborate with top 3PL companies to analyze business requirements, evaluate strengths and weaknesses, and make recommendations.
Hybrid 4PL operations
Some ecommerce companies may hire a 4PL for certain aspects of their business while working directly with a third-party logistics provider for others.
For instance, if you’re an enterprise-level ecommerce company, you may launch a new brand with its own fulfillment processes. A 4PL could take on the responsibilities of the new brand without changing a 3PL model that works for your existing brands.
Another example may be if you’re a startup or company facing a growth phase that needs consultancy help for a temporary period. Once the 4PL finds the best third-party shipping company for your needs, you may take over the relationship for the long term.
Finding the right fit with a 3PL fulfillment company
As you’re considering certain companies, compile interview questions for each one based on the specific needs of your business. Below, you’ll find various lists of questions to ask top 3PL companies to help get you started.
Key questions to ask third-party logistics companies
Industry
If a 3PL fulfillment company is familiar with your industry, it’s more likely that they understand your unique challenges and requirements, leading to smoother operations and better problem-solving.
- How many clients do you serve in our industry?
- What improvements have you helped companies in our industry realize?
- What industry-specific certifications do you have?
- How do you stay informed about the latest trends and developments?
- Can you describe industry challenges you’ve successfully navigated?
- How do you ensure agility to align with industry change?
Specialized services
Specialized expertise allows the best 3PL companies to tailor services to the specific needs of your business, resulting in improved efficiency and cost-effectiveness.
- What specific services do you specialize in?
- Can you share success stories related to projects similar to ours?
- How do you stay updated on industry trends and best practices?
- How do you approach unique challenges in this specialization?
- Can you elaborate on technologies or tools you use?
- What ongoing training and certifications does staff undergo?
3PL size and experience
The size and experience of third-party shipping companies can impact their ability to handle your volume, complexity, and potential challenges effectively.
- How long have you been in the logistics services industry?
- What is the size of your operation in terms of staff and facilities?
- How has your company evolved over time to adapt to changes in the logistics industry?
- Can you provide examples of projects that required significant scalability?
- In what ways does your experience translate into cost efficiencies for your clients?
- Can you provide references from companies of a similar scale to ours?
Accuracy rates and guarantees
Precision and reliability are crucial in logistics services to prevent disruptions, delays, and errors that can affect the supply chain. Your 3rd party fulfillment company should be able to clearly identify its commitments to accuracy.
- What is your track record for accuracy in order fulfillment and delivery?
- What measures are in place to handle unforeseen challenges to accuracy?
- How do you handle discrepancies after the fact?
- How do you monitor and continuously improve accuracy rates?
- Do you offer any guarantees of shipment accuracy or on-time deliveries?
- Can you share times when your commitment to accuracy exceeded client expectations?
Geography and distribution
A 3PL with a strategically located network can optimize transportation costs and reduce lead times. The best 3PL warehouse spaces are close enough to your customers to ensure two-day shipping without requiring you to stock an excessive number of facilities.
- Where are your primary distribution centers located?
- How do you optimize transportation routes to minimize costs?
- Can you provide examples of how your geographic positioning benefits clients?
- What strategies do you use to optimize last-mile delivery in different regions?
- What technology do you use to optimize last-mile delivery in different regions?
Network partners
A top 3PL company may have a robust network of partners to enhance services and flexibility, including complex transportation networks that can impact your shipment timing and accuracy.
- How does your 3PL company select and evaluate your network partners?
- Could you provide information about key partners in transportation and technology?
- How do you ensure seamless collaboration with your network partners?
- Can you describe a situation where your network partnerships resolved a critical logistics issue for a client?
Continuity planning
Unforeseen events and disruptions are practically inevitable in logistics. The best 3PL companies use effective continuity planning to minimize the impact on your supply chain.
- What measures do you have in place for business continuity and disaster recovery?
- How do you communicate and coordinate during emergencies or unforeseen events?
- How often do you review and update your continuity plans to adapt to evolving risks?
- Can you share examples of how your continuity planning has been tested?
- How do you involve clients in the continuity planning process to align expectations?
Scalability
When looking for third-party logistics companies, scalability may be one of the most important factors in sustainable growth.
- How easily can your 3PL company scale to accommodate increased volumes?
- What challenges might arise when scaling, and how do you address them?
- What technology does your 3PL company have in place for seamless scaling?
- How do you ensure that scalability does not compromise quality and efficiency?
- Can you share examples of clients who have successfully scaled with you?
Cost and cost efficiencies
No matter what stage your business is in, cost-effectiveness is a key factor in choosing the best 3PL for ecommerce.
- How does your 3PL company structure your pricing for different services?
- What key performance indicators (KPIs) do you use to measure cost efficiencies?
- How do you collaborate with clients to align on cost-efficiency goals and strategy?
- Can you provide examples of cost-savings you’ve implemented for other clients?
Customer service
The best 3PL companies have dedicated customer service help that involves personal relationships and ongoing, proactive support.
- What level of customer support do you provide?
- What steps do you take to address potential concerns before they escalate?
- How does your 3PL company handle and resolve customer complaints or issues?
- How do you gather client feedback for continuous customer service improvements?
- Can you share examples of situations where your 3PL company made a significant impact on client satisfaction?
Switching fulfillment partners can have a huge impact on your business, so it’s important to make sure the one you choose will be a good fit for the long haul. If you want to work with the best 3PL fulfillment company, take the time to get to know them first and decide if their business decisions are based on short-term revenue or long-term relationships.
Top 3PL companies for 2024
Ready to get your search for 3PL fulfillment companies headed in the right direction? Check out this list of the best 3PL companies and specific criteria to look for based on specialization.
This list may be a little subjective (we’re only human, after all), so refer back to the questions above to solidify your own thoughts and opinions.
Best 3PLs for ecommerce: capabilities to consider
The impact a 3PL company has on your ecommerce business can be profound. Consider the following criteria in shaping your thoughts on each one’s ability to provide efficiency, reliability, and customer support.
Integrations with ecommerce platforms
Seamless integration with major ecommerce platforms such as Shopify, Magento, and WooCommerce is fundamental. This serves as a backbone for operations, allowing your business to synchronize product listings, inventory management, and order processing. Integrated ecommerce platforms also ensure any changes or updates made in their systems are reflected in real-time within a 3PL company system.
This connectivity extends beyond visibility. It directly impacts the efficiency of order processing. Efficiency gains can translate to faster turnaround times, reducing the likelihood of delays and enhancing the overall customer experience.
Omnichannel fulfillment
A 3PL company with robust omnichannel fulfillment capabilities can help you maximize sales opportunities. A unified fulfillment service can help you increase revenue while enhancing brand consistency and customer satisfaction.
Flexibility and scalability
As you expand your presence across different sales channels, the flexibility and scalability of your 3PL company may be instrumental. Scalability without compromising service quality is a key factor in sustained ecommerce growth.
Commitments to order accuracy and speed
Ecommerce customer expectations are high. Accurate orders, free from errors or discrepancies, contribute to positive customer experiences, fostering trust and loyalty.
That means order accuracy and speed impact more than individual transactions. They can significantly influence brand reputation.
Review the questions suggested above and ask each 3PL company about accuracy rates and guarantees.
Strategic fulfillment center locations
Strategically located fulfillment centers play a crucial role in minimizing shipping times.
Proximity to customers enables your 3PL company to fulfill orders quickly, reducing transit times and meeting customer expectations for timely deliveries.
Optimal warehouse locations also contribute to cost efficiency. By strategically placing centers in regions with high customer concentrations, you may be able to minimize shipping costs.
Moving fulfillment inland earlier in the order-to-cash cycle may also help you avoid the risks of congestion that can delay inventory on the coasts, where greater logistics activity can cause bottlenecks.
Handling large, heavy, and bulky items
If you sell large, heavy, and bulky items, a specialized 3PL company offers a strategic advantage for your ecommerce business. Specialization in this area can help you reduce shipping costs, limit the risk of damages and returns, and expand your market reach.
Kitting and assembly
If your ecommerce business offers customized product bundles or packaging configurations, you may require kitting and assembly services.
A 3PL with kitting expertise ensures processes are executed seamlessly and knows how to return individual SKUs to inventory for sales optimization.
Flexibility with minimums or ratios
The flexibility of operating without minimum order requirements or strict order-to-SKU ratios can help ecommerce businesses with varying sales volumes. This flexibility lets you scale up or down, ensuring your 3PL’s services can adapt to evolving business needs.
Customer service
Challenges like inventory management, order tracking, and reverse logistics may raise questions for you or your team. Exceptional customer service can be a defining factor.
Best ecommerce 3PL companies
Red Stag Fulfillment
Maybe we’re biased, but we feel good about putting our name at the top of this list.
Red Stag was founded by former ecommerce business owners, so you get a partner that understands your pain points firsthand (think high shrinkage rates and costly shipping errors).
That’s why we offer 100% order accuracy and 0% inventory shrinkage guarantees. If we make a mistake, we’ll cover the cost and pay you an additional fee. No other ecommerce 3PL companies guarantee anything like that.
Red Stag’s strategically placed warehouses make it easy for you to meet customer expectations for fast shipping services, too.
With warehouses located inland, where it’s cheaper and less congested, you can reach 96% of the U.S. within two days, including East Coast and West Coast addresses. Most companies move inventory inland at some point in the order-to-cash cycle anyway. Doing it earlier limits risks like high coastal inflation and congestion bottlenecks.
You have customer service and success teams ready to help you at every stage. Most people on our customer teams start in a Red Stag warehouse, so they know supply chain operations inside and out. They’re well-equipped to provide the support you need and proactive about keeping in touch with you.
Red Stag works with a wide range of products across many industries, but you might have heard about our reputation for handling the large and oversized items that can be a challenge for other 3PL companies. You can also work with Red Stag to prepare for the approval process for Amazon’s Seller-Fulfilled Prime (SFP) or for Fulfillment by Amazon (FBA).
You don’t have to worry about monthly minimums or an order-to-SKU ratio, but you’ll get the best value if your company has hundreds to thousands of orders per month. A typical package at Red Stag weighs 20 pounds or more, but there’s no upper limit—at least not that we’ve found yet.
You can also take advantage of a 30-day trial period with no obligations to continue. If you’re interested in learning more about how Red Stag can help you serve your customers, reach out to get started.
ShipBob
ShipBob, a leader in DTC ecommerce business, guarantees 100% coverage for two-day shipping across the U.S. With low monthly minimums depending on services, it works with companies with low SKU counts and offers a variety of standard and custom packaging sizes for up to mid-sized items.
ShipMonk
ShipMonk offers global logistics solutions to more than 200 countries, so it may be ideal for international sellers. The 3PL company is flexible with low minimums and scalable pricing.
ShipHero
ShipHero offers warehouse management and fully outsourced fulfillment. With nine warehouses, they may be best for enterprise ecommerce companies that can afford to distribute high stock levels across locations. It claims a 3.5 day average fulfillment time and a 35% decrease in warehousing costs compared to other services of their size.
Saddle Creek Logistics
Saddle Creek excels in large, omnichannel enterprises that sell enough to scale inventory into more than 40 warehouses and may be able to connect ecommerce companies with manufacturers and factories for additional product development or cost-efficiencies.
Speed Commerce
Speed Commerce is a flexible D2C logistics provider with high warehouse capacity. They deliver to most of the U.S. within two days. They provide a U.S.-based contact center for customer service.
Best FBA 3PLs: capabilities to consider
If you use Amazon’s FBA or sell on the marketplace, you need to make sure your 3PL tailors services to the platform’s requirements.
FBA integration
Seamless integration with Amazon’s FBA system is fundamental, ensuring efficient and error-free processes. Your 3PL company should have the capability to handle FBA-specific requirements, including labeling, packaging, and shipping standards.
Amazon compliance
Compliance is non-negotiable with Amazon. Make sure your 3PL understands and adheres to Amazon’s standards to avoid acceptance issues. Your chosen 3PL should be well-versed in Amazon’s specific labeling, packaging, and shipping guidelines.
Best FBA 3PL companies
3PL Guys
3PL Guys offers real-time inventory management and freight quotes through an integrated system. They can also assist FBA sellers with air and ocean. Transparent pricing includes $15.00 per pallet for receiving, $40/pallet for storage, and a $29.99/month warehousing software fee.
ZonPrep
ZonPrep claims a high shipment accuracy rate of 99.9% and 48 to 72 hour packing timeline. Dedicated reps respond to inquiries quickly. Customizable plans cover receiving, inspection, labeling, emphasizing no hidden fees.
Best cold chain 3PLs: capabilities to consider
Cold chains demand specialized capabilities to ensure the safe transport and storage of temperature-sensitive goods. The following criteria are crucial for selecting cold chain 3PL shipping companies:
Temperature storage
Any 3PL company serving cold chains has facilities equipped with temperature-controlled storage to accommodate a range of temperature-sensitive products.
Monitoring
Comprehensive monitoring systems are critical in cold chain logistics because they provide real-time visibility into temperature conditions. The best 3PLs implement advanced monitoring technologies that allow for continuous tracking and immediate alerts if temperatures deviate from specified ranges. This level of vigilance is essential to prevent spoilage or degradation of temperature-sensitive products.
Backup systems
Robust backup systems prevent disruptions in events such as power outages or equipment failures. These events could compromise temperature control, causing loss of inventory, capital investments in inventory, and forecasted profits. They may also trigger additional recordkeeping requirements that can be costly to meet. It’s better to sidestep these risks.
Compliance recordkeeping
You can face heavy fees and fines if you don’t adhere to regulatory standards and recordkeeping requirements. You may find yourself on the receiving end of further unwanted attention in the form of increased inspections or records requests. Make sure your 3PL keeps the right records.
Prep for FDA Food Traceability Rule
Preparedness for upcoming regulations, such as the FDA Food Traceability Rule, can help your company keep supply chains moving when requirements change. Failure to prepare in time may result in major financial losses.
Best cold chain third-party logistics providers
RLS Logistics
With approximately a dozen locations, RLS Logistics caters to DTC and B2B businesses. They may have a monthly minimum. They provide real-time dashboard updates.
Cold Chain 3PL
Cold Chain 3PL offers two-day shipping for most of the country. Ideal for startups, it accommodates flexible SKU limits for various goods and FBA prep.
Best alcohol 3PL: capabilities to consider
Alcohol logistics pose unique challenges due to varying state laws and the nature of the cargo. The criteria for selecting the best alcohol 3PL fulfillment and logistics company may include:
Compliance
Ask questions to make sure your 3PL company thoroughly understands and complies with state laws and regulations governing the transportation and storage of alcoholic beverages across jurisdictions.
Insurance
Given the higher risk of cargo theft for alcohol shipments, the 3PL company should provide comprehensive insurance coverage to protect against potential losses. If it doesn’t, you may need to factor cargo insurance into your own costs.
Temperature storage
Certain types of alcohol, such as wine and specific spirits, may require temperature-controlled storage to maintain their quality. The best alcohol 3PLs invest in facilities and equipment to ensure products are stored under optimal conditions, preserving their characteristics and preventing spoilage.
Best alcohol 3PL company
Trinity Logistics
Trinity Logistics has seven U.S. locations and over 100 independent agents. They focus on flexibility across a broad network. But they certainly aren’t the only player in the game. Be sure to explore other options to find the right fit for your business.
Best Canadian 3PL: capabilities to consider
When operating in Canada, international shipping considerations come into play. The criteria for selecting the best 3PL companies in the USA and Canada include the following.
Customs
Customs can be complex, and penalties for violations can be extreme, sometimes extending to individuals rather than companies. Expertise in navigating Canadian customs regulations helps to facilitate smooth cross-border and logistics operations.
Cross-border logistics
A 3PL company should demonstrate a streamlined process for coordinating shipments between the USA and Canada. This includes optimizing transportation routes, understanding border-crossing protocols, and coordinating with relevant authorities to expedite the movement of goods. Timely and efficient cross-border logistics contribute to overall supply chain management reliability.
Bilingual support
Effective communication is essential in cross-border logistics, where language differences can pose challenges. The best Canadian 3PLs offer bilingual support to facilitate seamless communication between parties involved in the supply chain.
This includes clear communication with customs officials, carriers, and other stakeholders. Bilingual support ensures language barriers do not impede supply chain efficiency.
Network capabilities
Look for strong network capabilities within Canada. Your products may move through more rural or undeveloped land than in the U.S., and a robust network ensures effective coverage.
Top choice for Canadian third-party logistics provider
Ottawa Logistics
Ottawa Logistics has two Canadian locations and a Dallas location for shipping in Canada and the U.S. They focus on cost-reducing strategies like zone skipping and rate shopping. There are plenty of other options out there, so be sure to shop around to find the partner that fits best with your business needs.
Work with the best 3PL for ecommerce
When you’re ready to scale your ecommerce business, Red Stag Fulfillment is here to help. As the only ecommerce 3PL to guarantee 100% order accuracy and 0% inventory shrinkage, we treat your products like our own.
Want to learn more or ask questions? Reach out to get started.
