Part 1 of the “Insufficient control over 3PL” series
This series presents selected examples from our projects. We begin with a WMS implementation project that also led to a review of the client's agreement with its logistics provider.
It started with WMS
The client asked HelpLogistic for support with implementing a warehouse management system. During our work, we took a broader look at logistics organisation, the WMS structure and the agreement with the external 3PL provider.
The business had grown much faster than the terms of its logistics services.
A new business scale, old terms
Over three years, the client's turnover grew from a few million to more than PLN 100 million. Its scale and logistics needs changed, but the provider agreement was not renegotiated.
The company continued to use terms set for a much smaller business. Managers and directors did not benchmark them against current market offers. Independent advisers and audits were not used either, so the issue remained unnoticed.
The relationship was good, and the client was unaware of how far its agreement had moved away from market conditions.
Comprehensive support beyond the initial task
Our work covered WMS implementation support and a review of its structure, as well as the 3PL agreement and other related areas of logistics.
We reviewed the existing agreement and ran a tender. This enabled comparison of offers for the current business scale and provided concrete data for negotiations.
The client received comprehensive support, from the system and service organisation to the contractual terms with its provider.
The result: the same provider, a completely new agreement
Given the good relationship, the client chose to stay with its existing provider. However, the partnership was now based on a new agreement aligned with current volumes and business scale.
The tender verified market conditions and created a basis for renegotiation. Changing the provider was not necessary to change the terms.
Should you review a trusted provider?
Good relationships matter. It is still worth regularly checking whether contractual terms reflect how the business operates and grows.
A 3PL provider will usually not approach you with: “Your business has grown; let's check whether you could pay less.” This does not have to reflect bad intentions. In the pace of everyday operations, both parties may simply continue using terms that were once appropriate.
Meanwhile, the company grows, processes change and the agreement stays the same.
Is it worth reviewing the terms with a trusted provider? Is independent support from HelpLogistic worthwhile? Consider when you last renegotiated your agreement.
One project can reveal several areas for improvement
WMS was the starting point in this case. A broader view also enabled a review of the 3PL agreement and alignment of its terms with the company's current scale.
At HelpLogistic, we combine WMS implementation support with reviews of processes, agreements and costs. This helps us identify related issues and support their resolution.
This is the first of many examples. Further projects will appear in the next articles in the “Insufficient control over 3PL” series. Facing a similar situation? Let's talk.
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