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The Non-Negotiable Parts of Your 3PL Contract

Posted by Heather Sweet


As alluring as the concept of a set-and-forget partnership in business may be, the reality is the complexity of business needs warrant revisiting at every level.

You've chosen a 3PL to work with, but that doesn't mean the work's finished: much like an engagement leading to marriage, you'll undoubtedly turn up questions or need clarifications as you both move forward to the "big day"–– signing the contract to secure their services.

So how do you build a lasting, stable business relationship with your new 3PL?

How do you build a partnership that can withstand the rigors of market demands?

With these non-negotiable parts of your logistics contract:

Getting on the Same (Contract) Page

Untold numbers of relationships have unraveled in the face of goal mismatches. For example: if your 3PL moves into the partnership thinking your goal is international expansion while you want to focus on domestic growth, their offered solutions will seldom align with your needs.

This can lead to regret and perceiving your new 3PL isn't up to the task, when in reality, they're just moving briskly down the wrong path.

Having a frank and honest conversation about where your company currently is and where you'd like to be in 5 years, 10 years, and beyond will help you both align from the very start.

Part of this process will dredge up miscommunications, so whenever possible, be clear and concise. Ideally, reserve important conversations for face-to-face meetings; email can fail to convey the proper tone, and even phone calls can be misinterpreted over multiple discussions.

While it's important to get any promises or commitments in writing, save the spirit/intent talks for when you have time to meet with your 3PL representative.

Don't Be Afraid to Bare All

Just as personal relationships can come with emotional baggage, so too toxic ideas can flow from an old service provider to a new one. Don't hesitate to bring up your "worst moments" or specific scenarios where your old company let you down: hearing how your new 3PL would handle the same situation can be very reassuring.

Conversely, if their approach wouldn't be suitable, this thought experiment can course-correct inconsistencies before they're implemented in a supply chain crisis.

There will be growing pains, and you may need concessions on both sides, but it's better to tackle these potential issues before the stress of a ticking deadline makes the negative aspects of a clash seem even worse––and temper-inducing.


Read the Fine Print

While you might scan a contract to make sure your "must-haves" are in place, don't neglect the rest of it. The "boilerplate" text of a 3PL contract could be a poor fit for your business' needs, leading to an accidental lapse in efficiency and adding stress to the equation.

Read through all the clauses carefully to make sure they apply to your business and won't tie your proverbial hands when you need to make a move to preserve supply chain momentum.

If you don't have a legal team on staff, a contract assessment is a good reason to retain the services of a lawyer or firm. It never hurts to have another set of eyes on the document that will legally connect you to a service provider.

If your new 3PL is honest, they'll have no problems with this extra step: it protects them too, after all.

Determine Who the Key Players Are

Knowing who your stakeholders are is crucial for accountability. Your company has a C-suite, after all––an hourly employee wouldn't be able to make sweeping, company-wide decisions on behalf of his management.

If your contact with your 3PL hits a wall with the generic brand team, you'll have no one to approach if you need adjustments or corrections. Know who calls the shots in your 3PL as comfortably as you recognize leadership in your own company.

While not every problem needs to jump to the top of the flagpole every time, it helps to have a direct line to someone who can make a difference in a hurry.

To Sum It All Up

Approach your business partnership with your new 3PL carefully, intelligently, and holistically to lock in future success. If you're just now entering the "engagement" phase of your new partnership, you're in an excellent position to benefit from our Best Practices Guide.

Even if you've already signed on the dotted line, it's never too late to make the most out of your connections along the supply chain: download the guide to start optimizing the way you interact with your 3PL!


Heather Sweet

Written by Heather Sweet

Marketing Content Manager specializing in project management, social media, and analysis.


We'd like to hear about your supply chain and discuss ways Kenco can help address your business needs.

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Kenco provides integrated logistics solutions that include distribution and fulfillment, comprehensive transportation management, material handling services, real estate management, and information technology—all engineered for Operational Excellence. 

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