How to Improve 3PL Tracking

Outsourcing to third-party logistics (3PL) carriers for your last mile offers clear operational advantages, but it also means putting your brand reputation in someone else's hands—and when deliveries go wrong, your customers will blame you, not your carrier.

The key to capturing 3PL benefits while protecting your business lies in implementing robust 3PL tracking systems that give you visibility and control over every delivery. In this guide, we'll show you how to set up 3PL tracking systems to ensure your 3PL partners consistently meet their service level agreements, how to maintain the quality customer experience your brand promises, and early warning signs of common problems so you can intervene before they escalate to customer complaints and damaged relationships

Key Takeaways:

• Brand Protection Requires Visibility: Outsourcing delivery to 3PLs creates a reputation risk—your customers hold you accountable for poor service even when a third party performs the delivery. Robust tracking systems restore control over the customer experience.
• Comprehensive Tracking Goes Beyond Delivery Confirmation: Effective 3PL monitoring tracks the entire delivery lifecycle—from order transmission and promised delivery windows to communication quality, first-attempt success rates, customer satisfaction, and automated payment processing.
• Standard Operating Procedures Enable Performance Measurement: Establishing clear benchmarks and monitoring actual versus planned performance allows businesses to objectively assess whether 3PL carriers meet their service level agreements and maintain brand standards.
• Real-Time Visibility Prevents Problems Before They Escalate: Advanced tracking systems identify delivery exceptions, lost packages, and communication breakdowns as they occur, enabling proactive intervention before customers experience service failures.
• Automated Communication Builds Customer Confidence: The right 3PL solution empowers carriers to send automated SMS and email updates, provide real-time tracking links, and enable customer self-service, reducing support calls while improving satisfaction.
• Technology Investment Pays Dividends: Modern last mile delivery software provides transparency, accountability, dynamic routing, performance analytics, and SLA compliance monitoring—transforming 3PL relationships from operational risk to competitive advantage.

How to Improve 3PL Tracking

What makes an effective 3PL tracking system? Knowing that your delivery arrived at the customer is necessary but it's nowhere near sufficient. Was the 3PL able to receive your order from your ERP or POS without manual keying? What delivery window was the customer promised? Was it met? Did the first delivery attempt succeed or were re-deliveries required? How did the 3PL communicate with your customer before, during and after the delivery? Were they kept informed about any changes to the ETA? Was the customer able to easily track their delivery online in real time? Was the delivery complete and in good condition? How did the customer feel about the delivery? If the same carrier handles return logistics, how are those transmitted and handled? Was your ERP able to verify the delivery and process a digital payment for the 3PL without manual intervention? 

To get the most out of your 3PL relationship, your 3PL tracking should answer these questions and more. The following strategies will help you build a comprehensive monitoring system that protects your brand while maximizing the operational benefits of working with third-party carriers.

1. Set Standard Operating Procedures

Before you can effectively monitor 3PL performance, you need clear benchmarks that define success. What is an acceptable on-time delivery rate for your business? How quickly should your 3PL respond to delivery exceptions? What customer satisfaction scores are you targeting? Without established standards, you're left making subjective judgments rather than objective assessments.

Well-defined operating procedures serve as your measurement framework. They allow you to compare your 3PL's actual performance against planned expectations across every critical dimension of delivery operations. This isn't just about setting arbitrary targets—it's about establishing the specific service levels your customers expect and your brand promises to deliver

Your standard operating procedures should include both quantitative and qualitative standards. On the quantitative side, define acceptable thresholds for first-attempt delivery rates, average delivery times, delivery window compliance, and damage rates. On the qualitative side, establish standards for customer communication touchpoints and  frequency, professional conduct, and problem resolution.

Documentation is critical here. Your 3PL partners need clear, written standards they can reference and train against. These procedures should be incorporated directly into your service level agreements, creating contractual obligations rather than informal expectations. When performance issues arise, your SOPs are the foundation for productive conversations about improvement rather than finger-pointing about blame.

Regular performance reviews against these standards also reveal trends over time. Is your 3PL's performance improving, declining, or holding steady? Are certain delivery zones consistently problematic? Do specific times of day or days of the week show different performance patterns? These insights help you work collaboratively with your 3PL to address systemic issues rather than just reacting to individual service failures.

The measurement process itself must be consistent and ongoing. Quarterly reviews aren't nearly frequent enough: Delivery experiences shape customer loyalty daily. A robust tracking system should monitor performance continuously with automated alerts when carriers fall below established thresholds, enabling real-time management rather than dealing with the consequences after the fact.

2. Establish Comprehensive Tracking Systems

High incidence of misplaced, lost, or undelivered orders should serve as a red flag—they indicate your organization lacks an effective carrier tracking mechanism. When package movement through the process isn't monitored, problems compound invisibly until they reach your customers.

Effective tracking systems provide granular visibility at every stage of the delivery journey. Where is each order right now? How long has it been at its current stage? How long  does it typically take to move from one stage to the next? What are your overall delivery success rates by carrier, route, or product type? This visibility allows you to identify which processes work efficiently and which create bottlenecks, enabling strategic improvements to your 3PL operations.

The foundation of comprehensive tracking is automated status updates. Manual tracking systems—where drivers call dispatch or customers call for updates—create information delays that undermine proactive management. Instead, your 3PL drivers need the ability to automatically transmit order-by-order status updates back to your system with minimal effort, ideally with a single button push or automatic geofence triggers.

These automated updates should capture key milestone events: order picked up from your facility, en route to customer, arrived at delivery location, delivery attempted, delivery completed, and any exceptions encountered. Each status update should include timestamp, location data, and relevant details about the delivery condition or any issues encountered.

Real-time visibility also enables exception management—the ability to spot and resolve problems while there's still time to prevent customer impact. If a driver is running behind schedule, you can proactively notify the customer about the delay. If an address is incorrect, you can contact the customer for clarification before the delivery attempt fails. If a package appears damaged during loading, you can arrange a replacement before the original even leaves your facility

Your tracking system should also capture data that helps you evaluate 3PL performance over time. First-attempt delivery rates reveal whether your 3PL is properly preparing for deliveries—confirming addresses, scheduling customer contact, and planning routes effectively. Time-in-transit metrics show whether deliveries are meeting promised windows. Damage rates indicate handling quality. Customer feedback scores reveal the overall experience quality beyond just successful delivery.

This data becomes your early warning system. When tracking reveals declining performance in specific metrics, you can investigate root causes and work with your 3PL to implement corrections before the problems become severe enough to damage customer relationships or require carrier replacement.

3. Enable Seamless Communication

Providing outstanding customer delivery service requires seamless communication throughout the delivery process. Customers who can schedule deliveries, make last-minute changes, or provide specific instructions to drivers receive more value than those treated as passive recipients. If you're working with 3PL carriers, you must ensure they offer the same high-quality communication experience that your in-house fleet provides.

Direct communication capability between your 3PL drivers and your customers is non-negotiable. It's insufficient to provide real-time communication mechanisms only for your in-house fleet while leaving customers in the dark about outsourced deliveries. Your customers don't know or care whether you're using internal drivers or 3PL partners—they only care about the experience they receive through your brand.

Modern 3PL solutions enable automated communication through SMS messaging and email notifications, allowing drivers to update customers in real time without manual effort. Pre-delivery notifications let customers know when to expect arrival. En-route updates provide specific time windows. Arrival notifications alert customers when drivers are approaching. Completion confirmations provide proof of delivery and any relevant details.

Advanced solutions also automate customer self-service, allowing people to choose their own delivery windows from a list of pre-optimized times and check their order status without calling your customer service team. Customers can see where their delivery is, track the driver's approach in real time, view updated ETAs, and access delivery photos or signatures—all without human intervention from your staff.

This automated communication goes beyond increasing customer satisfaction. First, it dramatically reduces inbound customer service calls, lowering your operational costs while freeing your team to handle complex issues rather than routine status inquiries. Second, it sets accurate expectations, reducing frustration and negative reviews when deliveries face unavoidable delays. Third, it demonstrates professionalism and transparency, building confidence in your brand regardless of which carrier physically delivers the package.

The communication system should also handle exceptions gracefully. When deliveries are delayed, customers should receive proactive notifications explaining the situation and providing updated arrival estimates. When delivery attempts fail, customers should immediately receive information about next steps and how to reschedule. When items are damaged or incomplete, customers should have clear channels to report issues and initiate resolution.

Two-way communication capability is equally important. Customers should be able to respond to delivery notifications with questions, request delivery changes, provide access instructions, or report issues. These customer responses need to reach the appropriate person—whether that's the driver, dispatcher, or customer service team—without getting lost in communication gaps between your organization and your 3PL partner.

Remember that communication quality directly impacts customer perception of your brand. Poorly written messages, excessive notifications, or unresponsive communication channels all reflect badly on your business even when the actual fault lies with your 3PL partner. Your tracking solution should give you control over communication content, frequency, and channels to ensure all customer interactions meet your brand standards.

4. Implement Advanced Last Mile Technology

Investing in the right 3PL freight software is the most effective way to improve 3PL tracking while maintaining control over the customer delivery experience. Manual tracking methods, spreadsheets, and basic software solutions simply cannot provide the real-time visibility, automated alerts, and comprehensive analytics required to effectively manage third-party carriers at scale.

The right solution offers transparency for last mile deliveries and dramatically increases the accountability of outsourced carriers. Real-time reporting and analytics provide a clear, current picture of daily last mile delivery operations, allowing fleet managers to monitor carriers effortlessly and ensure consistently strong performance from your delivery team. Modern final mile tracking solutions deliver critical benefits that help you overcome challenges of managing 3PL relationships. 

• Real-time monitoring enables your team to track all deliveries continuously, ensuring that exceptions are spotted and resolved quickly—often before customers even become aware of potential problems. This proactive approach transforms delivery management from reactive firefighting to strategic oversight.
• SLA compliance monitoring is built into advanced platforms, automatically comparing carrier performance against contractual obligations and alerting you to violations before they become patterns. Rather than manually reviewing performance reports and calculating compliance metrics, the system handles this analysis continuously and flags issues requiring your attention.
• Dynamic routing capability allows your 3PL carriers to complete deliveries faster and more efficiently, directly improving the customer experience. When carriers can optimize routes based on real-time traffic, delivery windows, and priority levels, they're more likely to meet promised delivery times while reducing operational costs through fuel savings and increased delivery density.
• AI integration as a core component of the software — not an add-on — is essential. AI enables 98% accurate ETAs because it can instantly balance competing needs (route efficiency, customer delivery requirements and cost-to-deliver) with traffic, weather, crew efficiency, vehicle availability, HOS and other factors. An AI assistant can dramatically reduce customer service calls while actually improving the service customers receive. 
• Performance benchmarking tools enable fleet managers to set achieveable key performance indicators based on actual operational data rather than assumptions. These benchmarks are the foundation for judging 3PL performance, comparing carriers against each other, and identifying opportunities for improvement.
• Comprehensive reporting capabilities allow you to easily generate and analyze performance data across any dimension relevant to your business. Which carriers perform best in specific geographic areas? How do delivery success rates vary by product type, delivery window, or customer segment? Where are your biggest opportunities to improve first-attempt delivery rates? These insights enable data-driven decisions about carrier management, contract negotiations, and operational improvements.
• Integration capabilities are equally important. Your 3PL tracking solution should seamlessly connect with your existing ERP, order management, and customer service systems. Orders should flow automatically from your systems to your 3PL partners without manual data entry. Delivery status updates should flow back into your systems in real-time, keeping all stakeholders informed. Proof of delivery documentation should automatically update relevant systems, triggering billing processes and updating inventory records without human intervention.

The platform should also support multiple 3PL carriers simultaneously, providing a single unified interface for monitoring all of your outsourced delivery operations. In addition to the extra burden it puts on your fleet managers, managing each carrier through separate systems creates information silos and makes comparative analysis difficult. A unified platform allows you to see total delivery performance across all carriers while still maintaining detailed performance data for each individual partner.

Scalability is another crucial consideration. As your business grows and you add more 3PL partners, more delivery routes, and more customers, your tracking solution must handle increased volume without degrading performance or requiring extensive reconfiguration. Cloud-based solutions typically offer better scalability than on-premise systems, with the added benefits of lower upfront costs and reduced IT maintenance requirements.

Also, the solution should provide role-based access and reporting that serves different stakeholders in your organization. Dispatchers need real-time operational views with exception alerts. Managers need performance dashboards and trend analysis. Executives need high-level KPIs and strategic insights. Customer service teams need order-level tracking and communication history. The platform should deliver appropriate information to each role without overwhelming users with irrelevant data

5. Making Your 3PL Relationship Work Better

Engaging 3PL companies allows you to focus resources on your core competencies while enjoying specialized delivery expertise and capacity. However, success requires maintaining an effective 3PL tracking mechanism that keeps you in control of the customer delivery experience despite outsourcing the physical logistics.

The strategies above—establishing clear operating procedures, implementing comprehensive tracking systems, enabling seamless communication, and investing in advanced technology—work together to create accountability, visibility, and control over your 3PL relationships. These aren't optional nice-to-have features; they're essential requirements for protecting your brand reputation while capturing the operational benefits that 3PL partnerships offer.

Fortunately, modern last mile delivery solutions make it possible to achieve this balance. The right platform helps you ensure that your logistics carrier partners adhere to SLAs, meet modern customer expectations, and deliver experiences that strengthen rather than damage your brand. By investing in these systems and processes now, you position your business to scale delivery operations confidently while maintaining the quality standards that drive customer loyalty and business growth.

3PL Tracking FAQs

Q: What's the biggest risk of working with 3PL carriers?

A: The primary risk is losing control over the customer experience while remaining accountable for delivery quality. When your 3PL underperforms—through late deliveries, poor communication, or damaged goods—customers blame your brand, not your carrier. Without robust tracking and monitoring, these problems often remain invisible until customers complain, making proactive management difficult.

Q: How detailed should my 3PL tracking be?

A: Effective 3PL tracking should monitor the entire delivery lifecycle, not just final delivery confirmation. Track order transmission from your systems to the carrier, pick-up from your facility, in-transit status, delivery window compliance, first-attempt success rates, customer communication quality, proof of delivery, customer satisfaction, and automated payment processing. The more granular your tracking, the earlier you can identify and resolve problems.

Q: What metrics should I use to evaluate 3PL performance?

A: Focus on metrics that impact customer experience and operational efficiency: on-time delivery rate, first-attempt delivery success, average delivery time, delivery window compliance, damage and loss rates, customer satisfaction scores, communication response times, and SLA compliance. Compare actual performance against your established standards regularly, and track trends over time to identify improvement or deterioration patterns.

Q: How do I know if I need better 3PL tracking systems?

A: Warning signs include frequent customer complaints about deliveries, high rates of lost or misplaced packages, inability to answer customer questions about order status, lack of visibility into carrier performance, reactive rather than proactive problem-solving, and difficulty determining whether carriers meet SLA standards. If you're discovering delivery problems from customer complaints rather than your own monitoring, your tracking isn't good enough.

Q: Can small businesses afford advanced 3PL tracking software?

A: Modern cloud-based solutions offer flexible pricing models that scale with your business, making sophisticated tracking accessible even for smaller operations. The real question is whether you can afford not to have proper tracking. The cost of lost customers, damaged reputation, and operational inefficiencies from poor 3PL management typically far exceeds the investment in proper technology.

Q: Should I use the same tracking system for both in-house and 3PL deliveries?

A: Absolutely. Using a unified platform for all delivery operations—whether performed by your internal fleet or 3PL partners—provides several advantages: consistent customer experience across all deliveries, centralized visibility and reporting, easier performance comparisons between internal and external carriers, simplified management processes, and reduced training requirements. Separate systems create information silos and management complexity.

Q: How can I improve communication between my 3PL carriers and customers?

A: Implement automated notification systems that send SMS and email updates at key delivery milestones: order confirmed, out for delivery, driver approaching, delivery completed. Provide customers with real-time tracking links showing current location and estimated arrival time. Enable two-way communication so customers can respond with questions, special instructions, or delivery change requests. Ensure all communications meet your brand standards regardless of which carrier performs the delivery.

Q: What should I do when my 3PL consistently fails to meet performance standards?

A: First, verify that your standards are realistic and clearly communicated through written SOPs and SLA terms. If standards are appropriate but performance is lacking, schedule a formal review with your 3PL to discuss specific performance gaps, root causes, and improvement plans. Set clear expectations and timelines for improvement, then monitor closely. If performance doesn't improve within agreed timeframes or the 3PL isn't willing to address issues, begin evaluating alternative carriers before service quality damages your customer relationships.

Q: How often should I review 3PL performance data?

A: Real-time monitoring with automated alerts for immediate issues (delivery delays, failed attempts, customer complaints) combined with weekly performance review meetings and monthly comprehensive analysis provides the right balance. Continuous monitoring enables proactive problem-solving, while regular reviews identify trends and improvement opportunities. Quarterly reviews are insufficient—delivery performance shapes customer loyalty daily and requires consistent attention.

Q: Can 3PL tracking systems integrate with my existing business software?

A: Yes, modern tracking platforms are designed to integrate with ERP systems, order management platforms, warehouse management software, and customer service tools through APIs and standard data exchange formats. This integration enables automatic order transmission to carriers, real-time status updates flowing back to your systems, automated proof of delivery documentation, and seamless payment processing. Proper integration eliminates manual data entry, reduces errors, and ensures all stakeholders access current information.