How Your 3PL’S Back-Office Support Can Make or Break Your Business

The necessity of having a strong back office in the transportation industry can be the difference between the success and failure of an Agency.  From start to finish, the companies’ financial stability can be one of the strongest determining factors.  This entails following a shipment through when it is tendered from the customer all the way through collecting and applying payments quickly and efficiently.  If any of the processes are not in sync, it can cause a disruption in business hurting the individual business owner utilizing those services.  It is for this reason that the back office of a company plays such a strong role in the life of an Agent.

Back office support is the financial power house supporting an independent Agent’s business.  It is the reason that many utilize this service rather than operate under their own authority, bond, and insurances.  Choosing the right company to run your business with should not be taken lightly.  When looking at partner companies in the industry, keep these key items in mind:

1. Find the best platform for your business: Make sure your partner has a competitive offering for your type of business
2. Ensure that the company is financially secure: Find reports and reviews about payments to carriers, employee reviews, etc. This is a great place to begin as you will start to see if the company is making payment within terms. Paying Truckload carriers on time is a crucial part of keeping the capacity that you find.
3. Make sure you understand how their back office works: Get as much detail as you can regarding the policies in place and how they handle business. Key factors here will be following a shipment through, how long does it take to invoice a shipment, do they have an active or passive collection team, etc.
4. Know the contract:There are a lot of partner companies that have “hidden fees,” allocated costs, or are completely one sided. Have your lawyer take a look and make sure you are protected under the agreement as well.  A transportation lawyer can help to find, isolate, and negotiate a better arrangement in most cases
5. Finally, negotiate the best profit sharing splits for your business: The marketplace has splits that vary by mode and performance. Know your worth, it can be wise to take a lower split if the back office is so strong that it allows you to go out and do what you do best which is grow your business.

It may turn out that after looking further into your partner company that you are in the best home for your business.  However, if you find yourself questioning whether or not it is in fact the best business to not only sustain, but continue growing, there are plenty of options out there. Many of these solutions can be found at Priority1.  We have both an LTL and TL offering with some of the most competitive splits in the industry.  The financial backing from our parent company keeping us completely solvent.  Living and breathing agreements in which we will work with you to make sure that it is the right arrangement.  Most of all, a place that you can call home, where you and your customers will be treated like family.

Omar Alami- Vice-President of Business Development