F. Curtis Barry & Company Blog

Reviewing contracts for third party logistic (3PL) providers can be a daunting task – especially for those not familiar with the process.  One of the most critical aspects in any 3PL contract is the language surrounding pricing and rate increases.  It is vital to ensure that the language is fair for both the customer, as well as the 3PL.   

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After months of working with prospective third-party logistics (3PL) vendors, you likely received hundreds of pages of selling materials and many verbal promises. A contract will memorialize:

• the statement of work (SOW) and the 3PL services you are contracting for
• the standards of performance
• the pricing of various 3PL services
• the payment terms
• a host of legal clauses such as warranty and guarantees, and termination of the agreement

This blog acts as a checklist of contractual considerations to assist you in negotiating a 3PL contract that is fair and a win/win for the client and the 3PL provider acting as your outsource fulfillment provider. 

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There are hundreds of competent third part fulfillment (3PL) facilities in operation today. Many have multiple facilities, which allows clients to be closer to the customer and save shipping costs. Additionally, private equity investors have acquired many major 3PL companies and consolidated them into 3PLs with dozens to hundreds of facilities. Many of these have specialized fulfillment for channels like DirectTV (DTV).

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