Before searching for a logistics service provider, we have to first understand some terms that we use interchangeably.
The term “3PL” or “Third-Party Logistics” itself is a bit broad in a sense. To better explain it:
Third-party logistics is a service that begins with receiving a shipment of goods, storing and managing the goods in a warehouse inventory, followed by picking and packing orders before shipping them to end consumers.
E-commerce business owners normally opt for outsourced third-party logistics due to the processes that are involved, which in nature, are highly suited to their daily operations.
To find the best logistics service provider in Malaysia for your company, you first need to identify what type of 3PL company you will need. Some examples are;
- Conventional 3PL Supply Chain and Warehousing Companies
- Courier Companies / Logistics Service Providers
- eCommerce Fulfillment Companies
Depending on the type of business you are conducting, you might need one of these 3PLs, or even a combination of these service providers.
Conventional Third-Party Logistics Supply Chain and Warehousing
Third-party logistics have been around for very very long. Conventional providers include;
- Sea freight / Air freight
- Warehousing
- Trucking
- Brokers
Working in bulk, these companies are the ones who help your stock move from countries like China into Malaysia. From past experience, I will also admit it is one of the most tedious things to do! With that said, brokers do help the process by taking care of a lot of the paperwork and hassle!
Courier Companies / Logistics Service Providers
Logistics service providers are the middleman between businesses and their customers. The most known 3PLs, courier companies like DHL, Ninjavan, and FedEx have all made a name for themselves (especially throughout the last few years) for getting small packages from one side of the world to the other.
Nowadays, however, they do offer more than just transporting or storing packages. They pretty much cover tasks like customs and labelling, although some concentrate on more specific types of goods or materials.
Generally, for these companies, working with one account will help you reach bulk, and as such, lower down your cost per package.
In Malaysia, charges for domestic couriers are usually flat for the first 4 KGs, making it cheaper to send parcels (especially if you are in eCommerce).
eCommerce Fulfillment Companies
Like us, eCommerce fulfillment companies specialise specifically in eCommerce. Services offered are;
- Receiving of goods (inbound)
- Storage and warehousing
- Pick and Pack Fulfillment
- Courier Management
The difference between a company like Flybear Pick & Pack and a conventional 3PL are quite a few.
| Conventional | eCommerce Fulfillment |
| Conventional warehouses and 3PLs often work in bulk, carton boxes and pallets. Generally, stock count is based on how many carton boxes are visible. | eCommerce Fulfillment companies work on pieces, which means that pallets and carton boxes are opened. This means that stock count is based on individual units. |
| Conventional warehouses work more with bigger racking systems, keeping stock palletised until it has to be delivered. | eCommerce generally has palletised storage, but also has picking racks, which are made up of thin and small shelves filled with pigeon hole picking bins. This allows for quick outbound when orders are received from webstores and marketplaces. |
| The 3PLs generally use older ERP systems that do not receive orders automatically. Any new order needs to be inputted manually using their software. | These fulfillment companies generally connect to marketplaces and webstores through API connections. Any order received on these platforms will automatically be captured by their Warehouse Management System. |
| Fees for conventional warehouses and 3PLs are generally cheaper. While items are heavier, B2B fulfillment is generally cheaper because it works on a pallet / carton box base and packing material is minimal. The most might be shrink wrap really! | Fees for eCommerce fulfillment can get expensive! While storage fees might be as low as the conventional, you will see higher charges for inbound and especially outbound as charges are at a per item basis. Packing material also adds up. |
What To Look For When Searching For eCommerce Fulfillment 3PL
Cleanliness and Organisation
It is important to have a clean and organised warehouse partner. You don’t want your items dusty when they are sent to your customers. Furthermore, an organised warehouse means there are fewer chances of having your items lost, which is a real concern when it comes to third-party logistics.
Some customers go as far as needing a closed warehouse with humidity control (45% – 60% is always safe) and no direct sunlight, ensuring all your items are safe from natural factors.
Security & Trail Auditing
Of course, ensuring the perimeters of the warehouse are safe is required by logistics service providers. However, for eCommerce fulfillment, extra security and cameras should be available at the packing tables at the warehouse. This is important when claims are made by customers against wrongful doings.
For example, if a customer complains that an item is missing, the footage from these cameras can prove that the orders have been packed correctly.
Another example is during disputes with marketplaces. Generally, if items break during transportation to your customers, marketplaces and courier companies require you to prove that the items were packed well. Once more, this footage will help defend your cases!
Connecting this to a powerful Warehouse Management System will allow for timestamp sync, making it easier to sync footage as well.
Opening Hours & Dispatch Time
Flybear opens weekday from 8AM to 6PM, and Saturdays from 10AM to 2PM. We are closed on Sundays and public holidays.
Our opening hours do differ from other eCommerce Fulfillment companies, some of which could be open for 24 hours. Choose which one will be right for you!
Available Packing Material
You don’t want to be worrying about buying packing material and sending it to the warehouse. Instead, find a partner who can provide the best quality packing material at an affordable cost.
For example, at FlyBear Pick & Pack, we have been able to source our great packing material and great prices. We then share the savings with all our clients.
Great Reputation
Of course, it is important that your partner has a great reputation. Remember, switching warehouses and providers is time-consuming and costly. One way to check whether a logistics service provider is suitable for you is through Google reviews!
Conclusion
Finding the right third-party logistics company can be tiring and tedious. In the end, it is not an easy decision. Switching will always be hard! But if you find the right one, it will help your company reach new heights.