3PL contract checklist: what to check before you sign

A 3PL contract decides what you pay, what happens when something goes wrong, and how hard it is to leave. Read it with this list open. If the answer to a line isn't written down, ask for it in writing.

Term and exit

How long is the initial term, and does it auto-renew?
How much notice do you have to give to leave, and how?
Is there an early termination fee?
What does it cost to get your inventory out (pick-out fees, pallet fees, freight)? Who pays?
How fast will they release your inventory after you give notice?
Can they hold your stock if there's a billing dispute (a warehouse lien)? Under what conditions?

Fees and billing

Is there a full rate card attached to the contract, not just a summary?
Is there a monthly minimum? Is it a minimum on total spend or on one fee (like pick & pack)?
Are there setup, onboarding, integration or account/software fees?
How is storage measured: per pallet, bin, shelf, or cubic foot? Per day, week or month? When is it counted?
Is there a long-term storage surcharge, and after how many days?
Can they raise rates during the term? How much notice do they give?
How is postage billed: their negotiated rates, a markup, or pass-through? Are fuel and residential surcharges passed on?
When are invoices due, and what are the late fees?

Service levels

What is the order cutoff time for same-day shipping?
How fast is receiving (days from arrival to sellable)?
What order accuracy and on-time shipping do they commit to in writing, and what happens if they miss it?
How do they report inventory, and how often do they count it?

Liability and insurance

What is their liability for lost or damaged inventory? Often it's capped per pound or per unit, well below retail value.
Do you need your own inventory insurance? Do they carry warehouse legal liability coverage?
Who pays for mis-shipments (wrong item, wrong address)?
How long do you have to file a claim, and how?

Data and integrations

Which store platforms and marketplaces do they connect to, and who maintains the connection?
Do you own your order and inventory data, and can you export it when you leave?