Review the liability clause carefully. Most 3PL contracts cap liability at a low multiple of monthly fees, which may be far less than the value of inventory they hold. Understand the limit and whether it is acceptable given your inventory value.
Look for a minimum volume commitment. Some 3PLs require minimum monthly fees regardless of actual volume. This is a fixed cost that affects your economics during slow seasons.
Check the notice period for termination. A 3PL contract with a 90-day termination notice period means you cannot leave quickly if service quality deteriorates. 30 days is standard; 90+ days warrants a closer look.
Understand what happens to your inventory if the 3PL closes or becomes insolvent. Your contract should specify that inventory is yours and held in trust — not an asset of the 3PL's business.
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