3PL Contract Types

Trucks n Sheds

New member
You hear a lot about new style 3PL contracts, but I have yet to really see any in practice. Still see lots of cost plus style. Has anyone come across any more innovative contract types? Some thing that incentivises 3PL Performance. Is there any detail on the web anywhere that shows how these are structured. Would be keen to read more on it.
 

Big Mack

New member
Re: 3PL Contract Types

Loggie said:
All the ones I have seen recently have been cost plus. Licence to print money IMHO.!
Of course. 3PLs love cost plus contracts, becuase they can hide all kinds of costs in the fees, plus whatever happens in terms of efficiency/productivity, the customer pays.

I'm amazed that 3PL customers still accept it!
 

Simple

New member
Re: 3PL Contract Types

I suggest exploring performance based contracting. You pay them based on outcome, rather than how much they have spent and profit needed.
 

Simple

New member
Re: 3PL Contract Types

I too thought was very simple but when I got my first assignment, I was totally at lost. It was so difficult to change from a conventional mindset to accept PBC. there is also a risk of supplier not performing to standard as well as over-quoting with all kind of risks buffered into.
 

Tines

New member
Re: 3PL Contract Types

Trucks n Sheds said:
I have been reading some stuff on this. PBL Performance Based Logistics. All really common sense, but it seems to hinge a lot on getting the form of the contract right.
PBL is strong in the military, as it was really derived from the US Dept of Defence. Have not seen it appear much outside defence though.
 
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