Choosing a 3PL or courier partner in India: questions to ask

I will not name a single courier or 3PL in this guide.

This site never does, and a name alone tells you little. The same partner can do well in one city and poorly in another, and service moves with the season. What protects you is your own order data and a written contract.

We are a packaging manufacturer, not a logistics company, and we earn nothing from whichever partner you choose. Our group sells online across India and we export to 20+ countries, so we are buyers of logistics too.

So my advice is this. Decide what you are buying, test the partner on your own pin codes, get COD, RTO, weight disputes and penalties in writing, and agree how you leave before you agree how you start.

What are you actually buying?

There are three common models:

1. Courier only. You pick and pack. The courier collects and delivers. You keep full control of the floor and the packaging.
2. A shipping aggregator. One platform books parcels with several couriers from one account. You still pack, but you can choose a courier by lane.
3. 3PL fulfilment. The partner stores your stock, picks, packs, ships and handles returns. You hand over the floor.

Match the model to the problem. If space or people are the problem, a 3PL helps. If delivery in certain regions is the problem, a second courier or an aggregator helps.

I would never buy a warehouse to fix a delivery problem.

Does their coverage match your customers?

A partner's national pin-code count looks impressive. That number is not about you.

1. Ask for the serviceable pin-code list as a file, with flags for prepaid, COD and reverse pickup, plus any remote-area surcharge.
2. Match it against your own delivery pin codes from the last 3 months. Count orders, not pin codes. A pin code with 400 of your orders matters more than 40 pin codes with one order each.
3. Ask for delivery times on your lanes (your pickup city to your top destination states), not a national average.
4. Ask what share of their deliveries succeed on the first attempt in those states, and how they measure it.

You can do the match yourself in an afternoon. Put your order pin codes in one column, look each one up in their list, and total the orders that fall outside COD or outside coverage.

Take that sheet to the meeting.

How does COD money come back to you?

COD is where cash can get stuck. I would ask these before signing:

1. How many days from delivery to money in your bank?
2. Is there an earlier remittance option, and what does it cost?
3. Are freight, RTO charges and weight adjustments deducted from COD before payment? If yes, insist on a statement per shipment, with the airway bill number on every line. Never accept one lump-sum deduction.
4. Who carries the loss if cash is collected but never deposited?
5. How do you raise a mismatch, and how many days do they take to answer?

We suggest reconciling every remittance against delivered COD orders each week. A gap found in the same week is a phone call. A gap found at the end of the quarter is an argument.

How do they handle failed deliveries and RTO?

RTO means return to origin: a parcel that could not be delivered comes back to you. You pay freight both ways, and the stock is locked in transit for days.

1. How quickly is a failed attempt reported to you, and in what form (dashboard, file or API)?
2. Can you request a reattempt, a corrected address or a new phone number, and by what time?
3. How many delivery attempts are included before the parcel goes back?
4. What proof does the delivery person record for "customer not available" or "customer refused"? Ask whether call logs or location are captured.
5. How many days does an RTO take to reach you, and who checks the contents when it arrives?

As a packaging maker, I will add one point here. An RTO parcel travels the network twice. A pack that only just survives one trip may come back crushed or open. If your RTO share is high, test your pack for the return journey as well.

How are weight disputes settled?

Couriers re-weigh and re-measure parcels in their hubs. If their reading is higher than yours, you are charged the difference. The arithmetic of billed weight is a subject of its own. Here the question is evidence.

1. Where do they weigh and measure: at pickup or at the hub, by machine or by hand?
2. What evidence do they share with you: a photo of the parcel on the scale, with the dimensions?
3. What evidence will they accept from you, and within how many days must you dispute? Get the window in writing.
4. Is a dispute closed in their favour if you miss that window?

On your side, I suggest you weigh and photograph every parcel at the packing station, with the reading and the label in the same frame. Measure your standard boxes once and store their sizes in your system.

Use a scale that is verified and stamped. The Department of Consumer Affairs explains that weighing and measuring instruments used by traders for transactions are verified periodically by state government Legal Metrology officers, under the Legal Metrology Act, 2009. A stamped scale and a clear photo make a far stronger case than a number typed into a sheet.

What should the SLA say?

For a courier, the agreement should cover at least these:

1. The pickup time window, and what happens after a missed pickup.
2. Delivery time by zone, for your lanes.
3. Lost and damaged parcels: liability per parcel, declared value, the claim window, the documents needed and the settlement time.
4. Insurance, and who arranges it.

For a 3PL, add these:

1. Receiving: how many hours from arrival until stock is counted, put away and sellable.
2. Dispatch cut-off: orders received before this time leave the same day.
3. Order accuracy and inventory accuracy, how each is measured, and who pays for stock that goes missing.
4. Returns: how many days to check, grade and restock.
5. Your packaging specification, written into the SOP. Which box for which SKU, which void fill, how many strips of tape, which insert. Otherwise each packer decides.

For every line, I would ask three things. Whose data measures it? How often do you see it? What does the partner pay or credit when it is missed? If the answer to the last one is nothing, the SLA is only a target.

Order accuracy deserves its own clause, and how to cut mis-shipments lists the checks worth asking a 3PL about.

Will their systems talk to yours?

1. Which of your sales channels and store platform do they connect to, and how often do orders sync?
2. Does tracking reach your customer under your brand or theirs?
3. Can you pull failed-delivery, COD and weight-dispute data every day, as files or through an API?
4. For a 3PL: does stock sync to your channels quickly enough that you never sell what is not there?
5. Who owns your customer data, and what may they do with it?

In our view, the trial should test the awkward cases: a cancellation after packing, a part shipment, an address change after dispatch. Easy orders work everywhere.

What GST work does a 3PL warehouse create?

This is the point that is easiest to miss. Under section 2(85) of the CGST Act, 2017, "place of business" includes "a warehouse, a godown or any other place where a taxable person stores his goods" (see the CBIC text of section 2). So a 3PL warehouse holding your stock is your place of business, and it belongs on your GST registration.

If that warehouse is in another state, section 25 of the same Act requires registration in every state where you are liable. Stock you move between your own registrations in two states is also treated as a supply under Schedule I of the Act, so it carries tax and paperwork.

I am not a tax adviser, so please speak to your CA before the first truck leaves, not after.

How do you leave if it does not work?

In an Indian rishta, the families meet more than once before anything is fixed. A logistics contract deserves the same care, and the exit clause deserves the most.

1. The notice period, and any minimum-volume or lock-in commitment.
2. Stock handover: how fast, at whose cost, and with a joint count on both sides.
3. Lien: whether they can hold your stock over an unpaid invoice. Limit it to undisputed amounts.
4. Data: order history, stock records, photos and returns logs, exported in a format you can use.
5. Deposits and the final COD remittance: when they come back to you.
6. Packaging and consumables bought for your account: who owns what is left.

Run a trial before you commit

Answers in a meeting are promises.

A month of your own orders gives you facts.

We would run the trial on a defined slice: one region, one group of SKUs, or a share of daily orders. Compare it with your current partner on the same lanes, using on-time delivery, first-attempt delivery, RTO share, damage, weight disputes and the days COD takes to arrive. The weekly board in packing KPIs to track every week works for a trial too.

For a 3PL, visit the warehouse during a busy hour, not on a planned tour. I would look at the bin labels, the returns corner, the damp patches, the fire exits and how many clients share the floor.

Before your next meeting with any partner, export three months of your delivery pin codes with order counts. Every conversation should start with that file on the table.