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With volatility becoming the norm in the supply chain, shippers have begun reevaluating their third-party logistics (3PL) providers. Here’s how to choose the right 3PL model. The Differences Between Long-Term 3PL Partnerships and Short-Term Contracts
S ome shippers may find that more basic relationships with logistics partners are no longer sufficient, as businesses increasingly rely on 3PLs for agility and flexibility.
As a more strategic engage- ment, a long-term 3PL partnership will likely include a multi-year agreement, tech- nology integrations, shared
make the 3PL a core part of the organiza- tion’s logistics strategy. The 3PL becomes more like an extension of the shipper’s operation. These types of engagements are especially valuable when: • A shipper wants to make logistics a competitive differentiator. • Customer experience is heavily tied to fulfillment performance. • The business is on a growth trajectory. • The shipper is undergoing a digital transformation that requires the 3PL to integrate technologies and share data. • Supply chain resilience is a high priority. Choosing the Right 3PL Model The decision is not always clear-cut. Many organizations even maintain core long-term partnerships while leveraging short-term providers to manage variability. Ultimately, the right choice depends on how critical logistics is to your busi- ness strategy. For companies that want to quit reacting and move toward a pro- active and strategic operation, investing in a long-term 3PL partnership can deliver value beyond the four walls of the warehouse.
data, and joint planning sessions. The 3PL gains a thorough understanding of the shipper’s products, customers, and growth strategy, enabling it to make proac- tive recommendations for improvement rather than simply reacting to issues. This stability also allows more substantial investments in automation and infrastruc- ture that wouldn’t otherwise make sense.
Long-term strategic partnerships and short-term agreements with 3PLs both have their place, but serve different pur- poses. Understanding the differences can help shippers better align their outsourc- ing model with business goals. What Is a Short-Term 3PL Contract? Short-term 3PL contracts are inherently execution-focused. A shipper engages a 3PL to address a specific, often time-sen- sitive problem. Speed and cost are often the primary factors that rule short-term 3PL agreements. Responsibilities and service-level agreements (SLAs) will be narrowly defined to expedite onboard- ing timelines. However, the brief nature of these rela- tionships also means the 3PL is unlikely to gain a deep understanding of the ship- per’s business or long-term roadmap. Also, there is very little time to optimize pro- cesses or streamline workflows. What Is a Long-Term 3PL Partnership? Conversely, a long-term 3PL partner- ship is built around shared goals, mutual investment, and continuous improve- ment. Both parties collaborate on an ongoing basis to continually streamline processes and costs.
When Shippers Should Seek a Short-Term 3PL
While a short-term 3PL arrangement has its limitations, these are by design and do not necessarily make it inferior to a lon- ger-term agreement. It can often be the right choice when issues exceed the ship- per’s existing logistics capabilities. For example, a business might need help with: • Highly unpredictable demand due to a supply chain disruption. • Seasonal demand spikes. • Testing new markets or sales channels. • Mergers, acquisitions, or facility changes that place internal capabili- ties in flux. • A situation where speed and flexibil- ity are more important than cost. When Long-Term Strategic Partnerships Have More Value A long-term logistics partnership makes more sense when the shipper wants to
—By Robert Kriewaldt
Senior Vice President Phoenix Logistics Robert@Phoenix3PL.com phoenix3pl.com 920-915-9746
About Phoenix Logistics. Strategic Real Estate. Applied Technology. Tailored Service. Creativity. Flexibility. These fundamentals reflect everything we do at Phoenix Logistics. We provide specialized support in locating and attaining the correct logistics solutions for every client we serve. phoenix3pl.com
January 2026 • Inbound Logistics 45
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