A logistics company is the operation between your product and your customer. Get it right, and orders arrive on time, inventory stays accurate, and your brand reputation holds. Get it wrong, and you spend the next six months putting out fires that have nothing to do with your actual product.
Most guides on “how to find a logistics company” read like a checklist someone wrote without ever running a warehouse. They tell you to “evaluate technology” and “check references” without explaining what to actually look for, what questions expose real capability versus sales polish, or how to tell the difference between a logistics company that can handle your growth and one that will buckle under it.
This guide comes from the warehouse floor. Jay Group has operated as a third-party logistics provider for over 60 years. We are a woman-led, family-owned company that has been listed on the Inc. 5000 seven times. We have seen brands outgrow their logistics partners, switch providers mid-peak-season out of desperation, and lose six figures in revenue because their fulfillment operation could not keep up with a single viral product launch. What follows is what we have learned about what actually matters when choosing a logistics company, and what does not matter nearly as much as most people think.
What Does a Logistics Company Actually Do?
“Logistics company” covers a wide range of services. Before evaluating providers, it helps to understand what you are actually hiring them to do, because not all of it applies to every business.
At its core, a logistics company manages the physical movement, storage, and delivery of goods through a supply chain. That can include warehousing and inventory management, order fulfillment (picking, packing, and shipping individual orders), transportation management and carrier coordination, reverse logistics and returns processing, kitting and assembly, contract packaging, marketing support fulfillment, and subscription and continuity programs.
What you need depends on your business model.
If you sell direct-to-consumer, you need a 3PL that specializes in ecommerce fulfillment. That means picking, packing, and shipping individual orders, integrating with your ecommerce platform, and managing returns. Volume can range from a few hundred orders per month to tens of thousands per day.
If you sell through multiple channels simultaneously (DTC, retail, wholesale, marketplaces), you need a partner that handles B2B and B2C from the same inventory pool without creating fulfillment conflicts. This is harder than it sounds. Many logistics companies that excel at one struggle with the other because the workflows, labeling requirements, and shipping methods are fundamentally different.
If you are importing goods internationally, you may also need a freight forwarder to move product from the manufacturer to the warehouse. This is a separate function from domestic fulfillment, and most 3PLs do not offer it. (We cover this in detail in our freight forwarding guide.)
If you sell products that require special handling (supplements, food and beverage, medical devices, hazardous materials, cosmetics), your logistics company needs specific certifications and infrastructure that most general warehouses do not have. This is where the evaluation gets serious, and where most generic advice falls short.
The logistics industry is growing. The U.S. Bureau of Labor Statistics projects 18% growth in logistics employment through 2032. The U.S. Census Bureau reports that ecommerce now accounts for 16.9% of total retail sales as of Q1 2026, and that percentage increases every year. The reason is straightforward: brands are recognizing that fulfillment is not a back-office function. It is a customer experience function that directly affects reviews, repeat purchases, and brand reputation.
The 8 Criteria That Actually Matter
1. Industry Experience and Product Specialization
A logistics company that handles consumer electronics has different infrastructure than one that handles supplements and nutraceuticals. A company that ships beauty and cosmetics operates under different regulatory requirements than one that ships food and beverage.
This is not just about “experience.” It is about facility certifications, equipment, and operational procedures. Regulated products require specific infrastructure that a general warehouse does not have:
The U.S. Food and Drug Administration requires facility registration for any warehouse that stores food products. Current Good Manufacturing Practices (cGMP) apply to cosmetics and dietary supplements, covering storage conditions, sanitation, pest control, and handling procedures. Medical device fulfillment requires FDA registration, lot tracking, serialization, and in some cases DEA registration for controlled substances. Hazardous materials require DOT compliance, DGAC (Dangerous Goods Advisory Council) training, and specialized storage areas.
If your product falls into any regulated category, the first question is not “what are your rates?” It is “what certifications does your facility hold, and can you provide the registration numbers?” A logistics company without the right certifications cannot legally store or ship your product. Discovering this after you have shipped inventory is expensive and disruptive.
Jay Group’s four facilities in Lancaster, PA, Mountville, PA, Houston, TX, and Reno, NV are FDA-registered (verifiable through the FDA Establishment Registration database), cGMP-compliant, ISO 27001 certified for information security, DEA-registered, and climate-controlled. We also hold DGAC dangerous goods certification for hazardous materials fulfillment. That combination is not standard. Most 3PLs in the United States carry one or two of these. Few carry all of them.
Questions to ask: – What product categories do you specialize in? – Which facility certifications do you hold? (FDA registration, cGMP, ISO 27001, SOC 2, DEA, DGAC) – Can you provide the actual registration numbers for verification? – What percentage of your current clients ship products similar to mine?
2. Warehouse Locations and Transit Times
Where your inventory sits determines how fast it reaches your customers and how much you pay to get it there. This is physics, not marketing. A warehouse in Pennsylvania ships to New York in one day. That same package takes four to five days to reach Los Angeles by ground.
The math on warehouse location is straightforward: a single facility on one coast means half the country gets fast delivery and half does not. A multi-location setup with facilities spread across the East Coast, West Coast, and central U.S. shortens transit times and reduces shipping costs by keeping inventory closer to the end customer. According to research from Penn State’s Supply Chain program (consistently ranked among the top supply chain institutions by Gartner), network optimization and facility placement are among the highest-impact decisions in logistics strategy.
Consumers now expect two-day delivery as a baseline, not a premium. If your logistics company cannot deliver to most of the country within that window, you are losing conversions to competitors who can.
Jay Group operates from four facilities totaling 760,000 sq ft: Lancaster, PA (250,000 sq ft), Mountville, PA (140,000 sq ft), Houston, TX (240,000 sq ft), and Reno, NV (130,000 sq ft). Lancaster and Mountville cover the East Coast, Southeast, and Midwest within one to two days. Houston covers Texas, the Gulf States, and the South Central U.S. Reno covers the West Coast, Southwest, and Pacific Northwest. This four-location network provides 2-day ground coverage to the majority of the continental United States, and inventory can be split across locations to optimize transit times for each customer’s address.
Questions to ask: – Where are your warehouse facilities located? (Get actual addresses, not “nationwide network.”) – What percentage of the U.S. population can you reach in 2 days by ground? – Do you offer inventory splitting across multiple locations? – How do you route orders when inventory exists in more than one facility?
3. Technology and Systems Integration
Your logistics company’s technology stack determines how much of your fulfillment operation runs automatically and how much requires manual intervention. Manual intervention means errors, delays, and your team spending time on operational tasks instead of growing the business.
The baseline requirement is direct API integration with your ecommerce platform. Shopify, WooCommerce, BigCommerce, Amazon, Walmart Marketplace, Magento, and NetSuite are the most common. If your 3PL requires you to upload CSV files or manually forward orders, you are working with outdated infrastructure that will not scale.
Behind the integration layer, the warehouse management system (WMS) matters. Not all WMS platforms are equal, and the difference shows up in inventory accuracy, order routing speed, and your ability to make data-driven decisions about your supply chain.
Jay Group runs Manhattan Associates WMS, a best-in-class enterprise platform used by some of the largest logistics operations in the world. This is not a custom-built database or a lightweight SaaS tool. It handles real-time inventory tracking across all four facilities, automated order routing to the nearest warehouse with available stock, and seamless integrations with major ecommerce platforms. Orders flow in automatically. Tracking numbers push back to your store automatically. Inventory updates in real time.
Two capabilities within the WMS that most brands do not think to ask about but should:
Lot tracking and expiration date management. If you sell supplements, food and beverage, cosmetics, or any product with a shelf life, your 3PL’s system must track lot numbers and expiration dates at the case level. Jay Group’s WMS manages this automatically, applying FIFO (First In, First Out) or FEFO (First to Expire, First Out) logic to every pick. FEFO is critical for perishable and regulated products because it ensures the oldest expiration ships first, reducing waste and preventing expired product from reaching customers. If your 3PL cannot explain their lot tracking and expiration workflow in detail, they are not equipped to handle regulated inventory.
Advanced reporting and forecasting. Your 3PL should not just store and ship your products. They should give you the data to make better business decisions. Jay Group’s proprietary order management system sits on top of Manhattan Associates and provides clients with advanced reporting: SKU-level velocity, inventory aging, order trends by channel, seasonal demand patterns, and forecasting tools that help you plan replenishment before you run out of stock instead of reacting after it happens. The difference between a 3PL that sends you a monthly PDF and one that gives you a live dashboard with actionable intelligence is the difference between guessing and knowing.
Beyond the WMS, evaluate:
Real-time inventory dashboards. You should see exact stock levels across all locations at any time without contacting your account manager. If you have to email someone to find out how many units remain of a product, the technology is not good enough.
Automated reorder alerts. The system should notify you when inventory drops below thresholds you set. Running out of stock because nobody checked the numbers is a preventable failure.
Order accuracy reporting. Your logistics company should provide regular accuracy metrics. The industry standard target is 99.5% or higher. Jay Group maintains a 99.8% picking and packing accuracy rate. Below 99%, one in every hundred customers gets the wrong item, which is enough to damage your review scores and repeat purchase rate.
Questions to ask: – What WMS do you use? (Named software vs. proprietary/custom) – How do you integrate with my ecommerce platform? (API, EDI, other) – Can I see real-time inventory levels without contacting my account manager? – What is your documented order accuracy rate over the last 12 months? – Do you support automated order routing across multiple facilities? – How do you track lot numbers and expiration dates? Do you support FIFO and FEFO? – What reporting and forecasting tools do you provide to clients?
4. Scalability and Peak Season Capacity
A logistics company that works at 500 orders per month may not work at 5,000. And a logistics company that handles 5,000 orders per month during normal operations may not handle 15,000 during a product launch or holiday peak.
Scalability depends on three things: labor, space, and systems. Can the warehouse bring on trained temporary staff quickly? Is there physical space to absorb a surge in inbound inventory before peak season? Can the WMS handle higher order volumes without slowing down or creating bottlenecks?
The National Retail Federation reports that holiday retail sales consistently represent roughly 20% of annual retail revenue, concentrated into about 8 weeks. For many brands, November and December order volumes are 3 to 5 times their monthly average. Crowdfunding and Kickstarter campaigns can create similar spikes: thousands of orders arriving in a single week after a campaign closes. If your logistics company does not have a documented plan for handling these surges, you will find out the hard way during the one period where failure costs the most.
Jay Group has operated 7-day-a-week fulfillment for decades, including through every peak season since the 1960s. With 760,000 sq ft of combined warehouse space across four facilities and a multi-location network that distributes volume rather than concentrating it, the infrastructure absorbs surges without scrambling for space or staff.
Questions to ask: – What is your maximum daily order capacity? – How do you staff for peak seasons? How far in advance do you start hiring? – What happens if my order volume doubles in a single week? – Can you show me data from your last peak season (volume handled, on-time rate, accuracy)?
5. Shipping Carrier Relationships and Rates
Your logistics company’s carrier relationships directly affect your shipping costs. A 3PL that ships high aggregate volume across all clients negotiates rates that an individual brand cannot access on its own. This is one of the clearest financial advantages of working with an established logistics company.
Jay Group’s carrier partnerships include FedEx, UPS, USPS, Amazon Parcel, DHL, OnTrac, OSM Worldwide, and GLS, plus regional carriers for last-mile optimization. Consortium-level freight discounts from this aggregate volume translate into meaningful savings compared to the rates a single brand can negotiate independently.
But rates are only part of the equation. Carrier diversification matters because no single carrier is the best option for every package size, weight, destination, and delivery speed. A logistics company that only ships through one carrier is leaving money on the table and exposing you to risk if that carrier experiences disruptions.
Look for a 3PL that uses rate shopping: automatically selecting the best carrier for each shipment based on destination, weight, dimensions, and delivery speed. This is also where understanding dimensional weight pricing matters. The recent FedEx and UPS dim rounding rule changes have increased costs for many shippers. Your logistics company should be proactively optimizing packaging to minimize dim weight charges, not waiting for you to notice the increase on your invoice.
Questions to ask: – Which carriers do you work with? (Get the full list, not just the top two.) – Do you use automated rate shopping to select the best carrier per shipment? – Can you share a rate comparison for my typical package size and destination zones? – How do you handle dim weight optimization? – What happens when a carrier has service disruptions? Do you have backup options?
6. Returns Processing and Reverse Logistics
Returns are not an afterthought. Depending on product category, return rates range from 15% to 30% (apparel is higher, consumables lower). According to the National Retail Federation, retailers lost $816 billion to returns in a single year. How your logistics company processes returns affects your bottom line, your inventory accuracy, and your customer experience.
A strong reverse logistics operation includes receiving returned items, inspecting them against your criteria (resellable, damaged, defective), restocking items that pass inspection, processing disposals or donations for items that do not, and updating inventory counts in real time.
Return fraud is a growing problem. Empty boxes, wrong items returned, used items claimed as defective. Your logistics company should have processes to identify and flag fraudulent returns for your review rather than automatically restocking everything that comes back.
One factor that increasingly matters: green returns. An estimated 5 billion pounds of ecommerce returns end up in U.S. landfills every year. Brands are starting to ask their 3PLs about sustainable return processing, including options for refurbishment, donation, and responsible disposal rather than defaulting to landfill. If sustainability is part of your brand identity, your logistics company’s returns policy should reflect it.
Questions to ask: – What is your returns processing workflow? – How quickly do returned items get inspected and restocked? – Do you have a process for identifying fraudulent returns? – Can you provide return reason data so I can identify product issues? – What are your options for sustainable disposal and green returns?
7. Account Management and Communication
Technology handles the routine. People handle the exceptions. In logistics, exceptions happen constantly: a carrier delays a shipment, product arrives damaged from the manufacturer, a retailer changes their routing guide, a customer needs a rush order.
The difference between a logistics company that causes you stress and one that reduces it often comes down to how they handle these moments. Do you have a dedicated account manager who knows your business, or do you submit tickets into a queue and wait? Do they proactively flag issues before you hear about them from a customer, or do you find out when a one-star review appears?
We have a client who ran a flash sale that tripled their normal daily order volume. Their previous 3PL did not notify them that orders were backing up until the third day. By then, shipping SLAs were blown and customer complaints were flooding in. At Jay Group, the account manager flagged the volume spike within hours and coordinated additional picking staff the same day. The orders shipped on time. That is the difference a dedicated account manager makes.
Jay Group assigns dedicated account managers to every client. These are not call center representatives rotating through a queue. They know your products, your shipping patterns, your seasonal rhythms, and your priorities. When something goes wrong, they are already working on it before you call.
Questions to ask: – Will I have a dedicated account manager? – What are your response time SLAs for issues? – How do you communicate proactive alerts (inventory low, carrier delay, quality issue)? – Can I visit your facility and meet my account team in person?
8. Financial Stability, Track Record, and Values
A logistics company going out of business while holding your inventory is a nightmare scenario that happens more often than most brands realize. Many 3PLs in the United States are less than 15 years old, operating on thin margins with leased facilities and limited capital reserves.
According to the U.S. Small Business Administration, about 20% of small businesses fail within their first year, and roughly 50% fail within five years. In the 3PL industry, where capital requirements are high and margins are thin, financial stability is not a given. It is something you need to verify.
Jay Group has been operating for over 60 years. We own and operate our facilities directly. We have been listed on the Inc. 5000 as one of the fastest-growing private companies in America seven times. Our CEO, Dana Chryst, has led the company as a woman-owned, family-run business, which matters to brands that value supplier diversity in their procurement decisions.
Beyond financial stability, consider whether your logistics company’s values align with yours. Jay Group’s four facilities run on 100% renewable energy through a partnership with Constellation, with Green-e certified Renewable Energy Certificates sourced from U.S. wind and solar generators. Our Lancaster flagship facility uses geothermal HVAC. All locations have EV charging stations. We are donors to the Lancaster Conservancy, supporting the preservation of natural lands in the region where Jay Group was founded. Sustainability is not a buzzword here. It is infrastructure.
Questions to ask: – How long have you been in operation? – Do you own or lease your facilities? – What is your client retention rate? – Can you provide financial references (bank, insurance carrier)? – What sustainability programs do you have in place? – Is your company woman-owned, minority-owned, or certified for supplier diversity?
Red Flags That Should Stop the Conversation
After 60 years of working with brands across every major product category, we have seen the patterns that predict a bad logistics partnership. These are the signals that consistently precede problems:
No facility tour offered. A logistics company that will not let you visit their warehouse is hiding something. Operations that run well are operations people are proud to show. Every client and prospective client is welcome to tour any Jay Group facility at any time.
Pricing that seems too low. We have seen brands lured by per-order rates 30-40% below market, only to discover hidden surcharges, monthly minimums buried in contracts, and accuracy rates that cost more in customer service than the savings were worth. If a quote is significantly below market rate, the gaps will show up somewhere.
No documented accuracy metrics. If a logistics company cannot tell you their order accuracy rate, on-time shipping rate, and inventory accuracy, they are not measuring them. And if they are not measuring them, they are not managing them.
Vague or generic references. “Our clients love us” is not a reference. Specific, contactable references at similar volume and product type to yours are the standard. Reluctance to provide them tells you everything.
Single carrier dependency. A logistics company that ships everything through one carrier is not optimizing your shipping costs and is vulnerable to carrier-specific disruptions. When UPS or FedEx has a service interruption, you need a provider that can route through alternatives the same day.
Long-term contracts with penalties. Confidence in service quality does not require locking you in. Be cautious of providers that require multi-year commitments with steep early termination fees. Jay Group earns retention through performance, not contract terms.
No compliance awareness. If a 3PL does not proactively ask about your product’s regulatory requirements, they either do not handle regulated products or they do not understand the compliance landscape. Both are problems.
The Decision Framework: How to Compare Logistics Companies
When you have narrowed your list to two or three providers, use this framework to make the final decision:
Step 1: Confirm baseline requirements. Certifications, platform integration, warehouse locations, and carrier partnerships. If any provider does not meet your baseline, they are out regardless of pricing.
Step 2: Request a total cost model. Not just per-order rates, but everything: receiving, storage (per pallet per month), pick and pack, shipping, returns processing, monthly minimums, and surcharges. Model it against your actual monthly volume and order profile. The cheapest per-order rate is rarely the cheapest total cost.
Step 3: Run a trial. Send a small batch of inventory and process real orders through each provider. Evaluate accuracy, speed, communication, and tracking quality with actual shipments, not demos. Jay Group welcomes trial periods because our performance data speaks for itself.
Step 4: Talk to references. Not the references the provider hand-picks. Ask for clients at similar volume, in similar product categories, who have been with them for at least 12 months. Ask what went wrong and how the provider handled it. Every logistics operation has bad days. What matters is how they recover.
Step 5: Visit the facility. Walk the warehouse floor. Watch the picking process. Look at how inventory is organized, how clean the facility is, and whether temperature controls are actually operational. Talk to the people who will be handling your orders. The quality of the operation is visible in person in a way that no sales presentation can replicate.
FAQ
What is a 3PL?
A 3PL (third-party logistics provider) is a company that handles warehousing, order fulfillment, and shipping on behalf of other businesses. Instead of renting warehouse space, hiring warehouse staff, and negotiating carrier rates yourself, you outsource those functions to a 3PL that already has the infrastructure, technology, and carrier relationships in place. The term “3PL” is industry shorthand for the type of logistics company most ecommerce, retail, and wholesale brands work with for domestic fulfillment. Georgia Tech’s professional education program and Penn State’s supply chain curriculum both cover 3PL strategy as a core component of modern supply chain management.
How much does a logistics company cost?
Logistics company pricing varies based on your order volume, product type, storage needs, and shipping destinations. Typical cost components include receiving fees (charged when inventory arrives at the warehouse), storage fees (per pallet or per cubic foot per month), pick and pack fees (per order plus per additional item), shipping costs (based on carrier, weight, dimensions, and destination zone), and returns processing fees. The total cost varies significantly based on product complexity, order profile, and fulfillment requirements. The best way to get accurate pricing is to request a custom quote based on your specific product dimensions, order volume, and fulfillment needs.
What is the difference between a logistics company and a freight forwarder?
A logistics company (specifically a 3PL) manages warehousing, inventory, order fulfillment, and shipping for individual customer orders. A freight forwarder specializes in moving large shipments of goods from one location to another, typically across international borders, handling transportation coordination, customs documentation, and carrier negotiations. Most brands that import products need a 3PL for domestic fulfillment and a freight forwarder to move bulk inventory from overseas manufacturers to their U.S. warehouse. Some companies offer both services, but many specialize in one or the other. We cover this distinction in detail in our freight forwarding guide.
How long does it take to switch logistics companies?
A typical 3PL transition takes 4 to 12 weeks depending on the complexity of your operation. The process includes setting up technology integrations, shipping inventory to the new facility, receiving and organizing that inventory, testing order processing, and running a parallel operation period to ensure everything works before cutting over fully. The biggest risk during a transition is inventory in transit, so plan the switch during a lower-volume period rather than right before peak season.
What certifications should a logistics company have?
The certifications you need depend on your product type. FDA registration is required for facilities that store food, dietary supplements, cosmetics, and medical devices. cGMP compliance is required for supplements and cosmetics. ISO 27001 certification covers information security management, critical if your logistics provider handles customer data. DEA registration is required for certain controlled substances. DGAC certification covers dangerous goods handling. For hazardous materials, DOT and OSHA compliance is mandatory. Always verify certifications directly through the issuing authority rather than accepting claims at face value. FDA registrations, for example, are searchable through the FDA’s public database.
Can a small brand use a 3PL logistics company?
Yes. Many 3PLs work with brands shipping as few as a few hundred orders per month. The key is finding a logistics company that serves small and mid-size brands rather than one that only caters to enterprise clients. A 3PL designed for large-volume clients may impose minimums or deprioritize smaller accounts during peak season. Jay Group works with brands at every stage, from startups preparing for their first product launch or Kickstarter fulfillment to established companies shipping tens of thousands of orders per month.
What happens to my inventory if my logistics company goes out of business?
If your 3PL ceases operations while holding your inventory, you may need to arrange emergency retrieval of your goods. This is why financial stability and company track record matter. Ask about facility ownership (owned facilities are more stable than short-term leases), years in operation, insurance coverage, and what happens to client inventory in the event of closure. Jay Group has operated continuously for over 60 years with facilities we own and manage directly, which eliminates the sublease risk that comes with smaller, newer providers.
How do I know if my current logistics company is underperforming?
Track these metrics: order accuracy (below 99.5% is a problem), on-time shipping rate (below 98% is a problem), inventory shrinkage (above 1% is a problem), and customer complaints related to shipping or fulfillment. If fulfillment is a top-three complaint category in your customer feedback, your 3PL is the issue. Also monitor how quickly they respond to exceptions and whether they proactively identify problems before you do. A good logistics company catches issues before you hear about them from customers.
What KPIs should I track with my 3PL?
Five metrics that matter most: order accuracy (target 99.5%+, Jay Group maintains 99.8%), on-time shipping rate (target 98%+), inventory accuracy (target 99%+, measured by cycle counts), receiving turnaround (how many business days between a shipment arriving and inventory being available for sale), and returns processing time (how many days between a return arriving and the item being restocked or dispositioned). Ask your 3PL for a monthly report covering these five KPIs. If they cannot provide it, they are not tracking it.
Does Jay Group offer climate-controlled warehousing?
Yes. Jay Group facilities include zones for products that require temperature and humidity regulation. This includes health and beauty products, supplements, food and beverage items, and medical devices with specific storage temperature requirements. Temperature and humidity levels are monitored continuously as part of our cGMP compliance protocols.