Less than a decade ago, the CEO of a major third-party logistics provider wrote an article lamenting the fact that so few companies outsourced their logistics. Based on recent trends, the tide appears to have turned in a dramatic way.

According to a 2002 Cap Gemini Ernst & Young and Georgia Tech study, nearly two-thirds of all logistics expenditures in North America will be directed to outsourcing by 2007-a marked contrast to the 43 percent that companies reported in 2002. And in Western Europe, 74 percent of all logistics dollars spent in 2007 will go to outsourced logistics providers.

As a result of this shift, it is almost inevitable that today's supply chain managers will have to become adept at two seemingly simple but critical functions: finding the third-party logistics provider (3PL) who's the best match for them via a well-constructed RFP, and making the relationship with that 3PL work.

To help you brush up on your outsourcing skills, APL Logistics offers five hints to improve your RFP process, along with four relationship secrets from some of its longest-standing clients.

RFP Tip #1: Don't cut corners on your internal homework.
Many companies take a wrong turn early in the RFP process by failing to collect internal input in a clear, methodical and standardized fashion. The result can be an RFP with data that's difficult to decipher, not to mention unclear goals and requirements.

There are two reasons this poses a problem. First, these inaccuracies limit a 3PL's ability to design a solution that will truly meet your needs. Second, they make it difficult for you to realistically evaluate responses when the time comes, because you're probably going to get price quotes that are all over the map.

To avoid falling into this trap, be consistent about the process you use to collect data from every department or location that's contributing to your RFP, asking everyone the same questions in the same way. Clearly define each term you're requesting input for, because words like "shipment," "space," and "order" can mean slightly different things to different people. And, ensure the directions you give for reporting data are painstakingly clear.

RFP Tip #2: Don't rush the process.
No matter how urgently you want to hire a 3PL, demanding that candidates submit proposals too quickly is a sure way to undermine the depth and quality of the responses you receive. Not only is adequate lead-time common courtesy 3PLs appreciate; it's the best way to ensure you don't get cookie-cutter responses.

APL Logistics, for example, likes to be very thorough in its analysis of potential solution alternatives, using tools like modeled representations of product flows to put together the ultimate solution. That sort of thing doesn't happen overnight. In fact, it can take hours just to load your data onto our systems.

As a minimum, allow four weeks for a local or regional 3PL RFP or six to eight weeks for a national or international RFP. The more time you give potential providers to work with your RFP, the more opportunities your candidates will have to run multiple iterations and evaluate what's really going to work best for you.

RFP Tip #3: Share your rationale.
Years ago, there was a popular ad campaign that stated, "Why ask why?" 3PLs have a good answer for that question- because every company that puts out an RFP has a clear motive for doing so. And, if 3PLs know what that motivation or "why" is, you will get a significant improvement in the proposals you receive.

For example, instead of saying, "We need 15,000 square feet of deconsolidation space in California," say, "We've opened up a new manufacturing operation in China, and we need to find a facility that's close to a good U.S. west coast port of entry."

By making 3PLs aware of the specific opportunities you're trying to capitalize on or the specific issues you're trying to resolve, you empower them to help you get to the root of your problem and quite possibly, craft a better solution.

Should you feel like this will make your RFP too vague or open-ended, you may wish to consider adding an interim step to your RFP process-conducting a Request For Information (RFI) first. This encourages more collaboration with your potential 3PLs and could even help you thin the herd of candidates.

RFP Tip #4: Include some reality checks.
Although an RFP is an opportunity for 3PLs to put their best feet forward, it should not be an open invitation to oversell services or capabilities. As a result, it's always a good idea to include some RFP questions that help you cut through any smoke and mirrors.

One of the most effective ways to do this is to ask potential providers to provide details about their implementation and start-up process and to include a timeline for your particular solution. Or if you prefer the historical approach, ask respondents to provide details about similar business they've handled.

Such questions help keep all of your respondents honest. They also help you avoid unfortunate surprises after contracts are signed.

RFP Tip #5: You've only just begun.
The last important point about improving 3PL RFPs has little to do with how you structure them, and everything to do with how your company behaves during the process.

Too often, companies forget that an RFP is not a preliminary step in a third-party logistics relationship-it's the first step, and it can set the tone of your 3PL relationship for better or for worse.

No matter how many 3PLs you cull out during the process, bear in mind that you eventually will have to work with one of them. So make sure you use your behavior during the RFP process, as an opportunity to start things off on the right foot.

Common denominators in good logistics marriages

Fortunately, the art of being an effective outsourcer isn't necessarily hard to learn. In fact, if you look at some of the industry's longest standing 3PL relationships, you'll find several common denominators.

Common Denominator #1: Good communication is key.
There are few disconnects between savvy outsourcers and their 3PLs, because these exemplary clients communicate clearly and frequently with their 3PLs.

As a rule, highly successful outsourcers are very inclusive in terms of their 3PL communications, hooking third parties up to their Intranets, copying them on internal communications that are big-picture in nature, and even having an employee on site at the 3PL's facility.

Equally important, these companies don't hold back, nor do they expect their third parties to. They're frank about any operational issues that could have an impact on logistics operations, even if those issues are potentially negative or proprietary. Furthermore, they encourage their providers to be completely candid about how things are going-even if the truth hurts.

Common Denominator #2: 3PL employees are valued and trained.
All companies understand the importance of training and growing their own employees. However, successful outsourcers often have a broader view of who their employees are, and this definition frequently encompasses the 3PL personnel who work on their business. Therefore, these companies are usually very good about doing what they can to expand the skills, talents and knowledge of their 3PLs.

It may be something as simple as deciding to send a 3PL's facility management team to the same events where they send their own logistics management.

Common Denominator #3: Performance expectations are clear.
In the Olympics, the outcome of a race is often affected by hundredths of a second-it's that precise. Successful outsourcers understand the concept of precision well, believing that the more specific they are about their expectations, the more likely they are to get exactly what they want.

Effective outsourcers don't just tell a provider they want next-day delivery; they say that next-day means by 7 a.m., and they spell out the date. Additionally, they don't just say they want the provider to help increase their profitability; they define that profitability in dollars-and-cents terms.

Above all, they take the time to make sure their 3PLs how important their contribution is to the big picture.

Common Denominator #4: R-E-S-P-E-C-T.
Last but certainly not least, there is the fundamental issue of respect. Smart outsourcers know who's the boss in a 3PL relationship: They are.

However, you will rarely if ever see these companies take a "my way or the highway" approach to dealing with their providers. Instead, they see and in turn treat their 3PL personnel as highly qualified, well-trained professionals who are partners in their logistics process, not just suppliers.

Because of this, they tend to be especially conscientious about honoring any commitments they make to their 3PLs. They're often more considerate and realistic about requests they make of their 3PLs, and they frequently encourage their providers to collaborate with them and be agents of change, even if it means taking some calculated risks.

Most important of all, while they of course hold their logistics provider accountable for performance, they still make them feel like the relationship is solid-not something they have to constantly defend or resell.

This brings us to an important former point: Like former President Ford, who was famous for his trips and falls, even the best 3PL will occasionally stumble, especially if you work with that provider for a very long time. After all, no one's perfect. When that happens, it may be tempting to change 3PLs, because the grass is always greener on the other side of the fence. However, if that 3PL truly has a good history of serving you, consider fixing the problem, not simply assigning blame, thereby giving your provider the benefit of the doubt.

Commitment and loyalty like that go a long way toward bringing out the best performance in your logistics provider. And that, in turn, will bring out the best in your logistics.