What Your RFP for a 3PL Should Include

While a request for proposal (RFP) isn’t necessary for hiring the services of a third party logistics provider, some businesses prefer to submit one. A RFP helps define the scope of the logistics services being sought so third party logistics (3PLs) firms can specifically match their offerings to those needs in their response.

For businesses using a RFP for selecting a 3PL, it’s important the request includes the proper information to obtain the best warehousing, distribution and logistics solutions to meet the company’s current and future needs. Because every business has different requirements, 3PL requests for proposals will differ from one company to the next. However, RFPs have several aspects in common, so with that in mind, here are some tips to assist you in preparing your RFP for 3PL services.

Drafting the RFP

Whether writing a RFP in-house or using an external consultant, it needs to be done by someone who has a thorough understanding of both the current day-to-day operations and future needs.

An effective request for proposal for 3PL services should be organized into sections that encompass what the company needs and the requirements the 3PL must meet. A due date for submitting proposals and a contact person should be clearly displayed. In some instances, businesses may establish a timeline that includes deadlines for submitting questions to them, responding to their questions, or other applicable time frames.

A RFP can be made available in an online format that can be emailed or downloaded, or as a paper document that is distributed through U.S. mail. Some companies offer both options. It also should be stated in the request how your business wants to receive returned proposals, for example as an attachment in an email or as a paper document.

Sections of a RFP

An organized RFP makes it easier to obtain comprehensive information about a 3PL’s services. As a guide, the document can be broken down into these seven sections:

1.* Objectives –* Specifically state what your business wants to achieve through the use of a 3PL. Supply historical data so the 3PL can understand where your business was, currently is and plans to be in the future in terms of performance and growth.

2.* Required Services –* Provide a list of warehousing, distribution and logistics services your business is seeking, including requirements for meeting objectives and goals. For example, the warehousing services entry would include stock rotation parameters and business practices for fluctuating inventory, peak seasons and low inventory. The services section should also indicate customized services your business may require from time to time, such as assembling different products into one bundle, packaging for a special promotion, or customized labeling.

3.* Goals –* When listing business goals, be specific in terms of what your business expects from your partnership with a 3PL. Include your company’s key performance indicators (KPIs) for warehousing, distribution and logistics. Likewise, include KPIs and other metrics that your company will use to assess the performance of the 3PL in meeting your business goals.

4.* Pricing –* Pricing structures can differ greatly among outsourced logistics providers, so the RFP is an opportunity to establish a standard pricing request format. Setting the pricing structure format also makes it easier to compare basic fees and any special pricing. It should outline warehouse space fees, additional fees for customized services and services obtained on an as-needed basis.

5.* Contract Terms –* It’s important to state the terms of the contract because often times, the longer the contract, the better the rates. To avoid going through the RFP proposal every year, some businesses set a contract term of several years, long-term, or request an open fulfillment agreement term that can be canceled at any time.

6.* Third Party Logistics Provider Information –*A business should gain key information about the public warehouse, distribution and logistics provider. With all other bid aspects being equal, this information helps to distinguish one 3PL from another. It also enables a business to identify common goals and philosophies as it decides which 3PL would make the better partner.

Basic information should be requested, such as years in business, number and location of public warehouse facilities, the number of full and part time staff, its business objectives, and profit and loss data for the past three years. Requesting information about community and/or charitable involvement can help ascertain the stability and commitment of the 3PL.

Technological information also needs to be obtained, including the type of warehouse management system, automated order fulfillment processes and transportation management system. Ask for specifics with regards to the age of the systems and equipment, whether operating systems are scalable and if the systems can be integrated with your company’s systems. Integration is key for tapping into the full benefits provided by a 3PL.

The RFP also needs to request specifics from the public warehouse, such as whether real-time information is available for monitoring inventory levels, tracking shipments and identifying product location in the event of a recall. Inquire as to how reporting is done, how often and the ability of your company to access reports.

Additional expectations should be included as well. For example, if you expect the 3PL’s senior management to be available for regular meetings or to be an active partner in your company’s management team focused on achieving business goals, then this should be specifically indicated in the request for proposal.

7.* Selection Criteria – *While a business can choose not to make its selection criteria public, giving 3PLs an idea of the evaluation process your business will be using to select a 3PL helps to ensure that your expectations are met. The selection criteria can be as basic as listing the factors that will weigh heavily in the comparison of providers.

We Welcome Your RFP

At Brendamour Warehousing, Distribution & Services, we welcome the opportunity to respond to a company’s request for proposals. We understand how important it is for business owners to find a third party logistics partner that is the right fit for their company. Whether through a RFP, an on-site meeting and tour of our facility, email, or a phone call, Brendamour Warehousing is at the ready to show you how we can be your logistics solutions provider.

Contact us whenever and however it’s convenient for you and we’ll present you with detailed information on how our services and solutions can get your goods to market in the fastest and most cost-effective manner possible.