Third-Party Logistics Partnerships

Procurement: Treat suppliers as extensions of your enterprise, not transactions. Procurement Excellence | 23 NOV 2025 - In complex global markets, resilient supply chains demand partnerships built on shared destiny, not just contracts. Here are 9 Steps to Create Long-Term Supplier Partnerships: #1. Transparent Communication ↳ Co-develop comms protocols e.g. QBR ↳ Clearly share expectations, goals & challenges #2. Long-Term Contracts ↳ Replace short-term with multi year agreements. ↳ Share long-term roadmaps & cost-savings initiatives. #3. Shared Performance Metrics ↳ Jointly agree and track SMART KPIs. ↳ Define escalation paths & RCA templates #4. Early Supplier Involvement ↳ Involve and recognize vendor’s contributions. ↳ Include key suppliers in product development cycles. #5. Guarantee Timely Payments ↳ Automate payment & consider early payment discounts. ↳ Audit internal processes for bottlenecks. #6. Co-Create Innovation ↳ Create supplier ideation portals & protect IP collaboratively. ↳ Fund joint proof-of-concept projects. #7. Recognize & Reward Excellence ↳Formally acknowledge & reward outstanding suppliers. ↳Bronze (Operational Excellence), Silver (Innovation), Gold (Strategic Impact). #8. Uphold Fairness & Ethics ↳ Interactions & contractual terms are mutually beneficial. ↳ Ensure cost pressures don't force unethical labor. #9. Jointly Manage Risks ↳ Jointly identify risks & develop contingency plans. ↳ Map tier-2/3 suppliers collaboratively. In today's volatile market, Resilient supply chains are built on deep, strategic supplier partnerships. Achieving lasting, mutually beneficial supplier partnerships requires: ✅️ Deliberate strategy ✅️ Centered on trust ✅️ Shared objectives ✅️ Continuous collaboration ♻️ Repost if you find this helpful. ➕️ Follow Frederick for Procurement insights. #ProcurementExcellence #SupplierCollaboration

Does your supplier always CC your boss on emails to you? I mentor many entry-level and junior management-level #Procurement professionals who are, let's say, Category Managers or Heads of Procurement, who always tell me, “Hari, my supplier comes to me for day-to-day things, but they go directly to my boss for more critical things.” There is a way you can stop this and also show the value you bring to your role ! First step is to forget the belief that your voice is only going to be heard if you are C-level. This is not true ! There will always be limitations to the roles that we can play. However, within your job role, consider how you are raising your value and visibility. Are you just having the routine discussions ? Routine PRs and POs ? Is there anything you can do differently ? When you are doing things in a unique way, suppliers will view you differently. Second step is being #Curious. The stakeholders, as long as they don't complain, we assume they are happy. But you must be curious to go and ask. This way you will know what they might not have ever told you because they thought that you're not going to help anyway. So how do you be part of a project that stakeholders are doing - from a grassroots level? > #Connect with suppliers (how do I make sure that I have caught their attention?) > See what are the challenges > Ask what are the requirements > Ask what is it that they’re missing > Bring information from the market > Ask “Can I help you?” This is how one builds stronger relationships with #Suppliers and #Stakeholders and makes you someone who is not just a point of contact but a strategic partner. Remember, your value is not defined by your title - it is defined by the #Impact you make ! Show your curiosity, connect deeply, and consistently bring value. Over time, your voice will no doubt be heard and respected at all levels.

"We need to talk about your pricing." Every 3PL dreads that email. But I watched a 3PL owner handle it in a way I'd never seen before. Instead of getting defensive, he sent this reply: "Happy to discuss. Before we do — can I show you something?" He jumped on a call and shared his screen. Pulled up a spreadsheet. "Here's every cost associated with your account. Rent allocation. Labor hours. Packaging. Shipping. Software. Insurance. Even the percentage of my ops manager's salary dedicated to your brand." The brand owner went quiet. "Your current rate gives us an 8% margin. Industry average is 12-15%. I've been eating the difference because I value the relationship and I believed your volume would grow." Then he asked a question that flipped the entire conversation: "If you were me, what would you do?" The brand owner admitted he had no idea margins were that thin. He'd assumed the 3PL was making a killing. They didn't negotiate a lower rate that day. They negotiated a path to higher volume in exchange for holding pricing flat. Twelve months later, that brand is still there. Volume up 40%. Most pricing conversations fail because they're adversarial. One side wants to take. The other side wants to protect. But when you show your math — really show it — something shifts. The question stops being "how do I get more from you?" It becomes "how do we make this work for both of us?" I'm curious: Have you ever shown a client your actual margins?

120 logistics sites. One control layer. And suddenly the robots stop bumping into each other. That is the quiet move Otto Group made this week. It barely trended. It should have. Here is the twist. This is not about adding more robots. It is about telling all robots to finally behave like adults. A short scene from the warehouse floor. Different vendors. Different fleets. Different software. Peak hits. Everything technically works. Nothing actually flows. Now the change. Otto Group plugs NVIDIA simulation tech into a single orchestration layer built with Reply. Every robot sees the same map. Every system speaks the same language. Before a shelf moves in real life, it moves in a digital twin. Most marketplace operators still argue with their 3PL about why promised delivery dates feel optimistic. This is the gap. A small but sharp detail that matters. The pilot runs at Hermes Fulfilment in Löhne. The stated ambition goes far beyond one site. This is designed to scale across the network. What this unlocks for operators and sellers watching closely: 📦 Peak planning stops being guesswork and becomes simulation first 🧭 Vendor lock in weakens when orchestration sits above the robots 🧠 Delivery promises get grounded in live warehouse reality 💸 Cost pressure shifts from labor debates to software leverage 🛠️ Automation decisions become reversible instead of permanent bets A sideways observation. Marketplaces love talking about faster delivery. The real winners quietly invest in fewer surprises. Single sentence that matters. Coordination is now more valuable than hardware. When fulfillment becomes software defined, scale belongs to whoever controls the operating layer. Not the fastest picker. Not the cheapest robot. The conductor wins. Sharp signal to end on. The next competitive edge in marketplaces will not roll in on wheels. It will load as an update. #ecommerce #marketplaces #logistics #fulfillment #supplychain

The reality of working with #Amazon has changed dramatically for brands in 2024. The online retailer focuses on: 💵 Optimising margin structures 💵 Reducing headcount resources 💵 Automating repetitive processes The list goes on. 🚩 Yet, most suppliers continue with business as usual. They keep deploying the same investment principles as in offline channels. And they keep their teams locally organised, ignoring Amazon's regional (pan-EU) expansion focus. This creates a gap between the reality of brands and Amazon, where brands increasingly invest in staffing while Amazon dramatically reduces its headcount. So how can brands ensure they align their organisation with the new reality Amazon is creating in 2024 and beyond? ✅ By following a simple 3-step approach: 𝟭. 𝗥𝗲𝘃𝗶𝗲𝘄 𝘆𝗼𝘂𝗿 𝗼𝗿𝗴𝗮𝗻𝗶𝘀𝗮𝘁𝗶𝗼𝗻𝗮𝗹 𝘀𝗲𝘁𝘂𝗽 Amazon's retail workforce is in decline. Layoffs and Automation have made many Vendor Managers redundant. As a result, Amazon has begun to focus its buyer resources at a regional EU level. Instead of 9 Vendor Managers covering each European marketplace, one Vendor Manager manages the EU9 trade relationship today. This requires brands to adjust their organisational structure to navigate the online retailer effectively. Brands that maintain a localised approach risk losing access to a dedicated Vendor Manager in 2024. 𝟮. 𝗥𝗲𝗮𝗹𝗶𝗴𝗻 𝗿𝗲𝘀𝗼𝘂𝗿𝗰𝗲𝘀 Aligning teams at a regional level can help brands achieve significant economies of scale. Centralising resources can help avoid duplication of work when it comes to negotiation or reporting processes, while the virtual shelf and shopper activation management can be maintained at a local level. Brands that successfully shape their business relationship with Amazon in 2024 will excel in realigning existing workflows at a regional level while meeting and considering the demands of local markets. 𝟯. 𝗔𝘂𝘁𝗼𝗺𝗮𝘁𝗲 𝗮𝗻𝗱 𝗼𝗳𝗳𝘀𝗵𝗼𝗿𝗲 With Amazon increasing its efforts to offshore and automate tasks in its retail business, brands have to shoulder more tasks that Vendor Managers and Brand Specialists previously owned. This means that offshoring and automation must become a top priority for 1P suppliers themselves if they want to avoid a significant increase in their cost to serve. It's good practice for brands to start capturing repetitive workflows currently done manually and either outsource them to cost-efficient service providers or automate them completely. After all, the size and complexity of Amazon's business will only increase in the years to come. --- How are you adapting your organisation to Amazon's automation and offshoring focus in 2024? Let me know in the comments! #amazonvendor #amazonstrategy

𝗧𝗵𝗶𝘀 𝗜𝘀𝗻'𝘁 𝗠𝘆 𝗣𝗿𝗼𝗯𝗹𝗲𝗺. I can never forget hearing those words from a key supplier early in my procurement career. We had a product delivery issue, and their response was blunt. The impact was not just the cost 💰 But reputational damage and a lot of operational chaos. At that time, I thought Why is this happening? But looking back now, after 16 years in procurement I see the root cause clearly: A Fractured Supplier Relationship. 𝗛𝗲𝗿𝗲’𝘀 𝘁𝗵𝗲 𝘀𝘁𝗼𝗿𝘆: Years ago, I worked on a resourcing project Where we sourced with a supplier solely based on pricing due to cost pressure. Communication was minimal, expectations weren’t formally aligned, and trust was non-existent. When challenges arose (and they always do) Instead of collaborating on solutions, it became a blame game. 𝗧𝗵𝗲 𝗜𝗺𝗽𝗮𝗰𝘁? 🚨 Delayed timelines and threat to customer line supportability. 💸 Expedited Premium freight costs that wiped out our “savings.” 🛠️ Resources diverted to firefighting instead of innovate. 💡 𝗪𝗵𝗮𝘁 𝗜’𝘃𝗲 𝗟𝗲𝗮𝗿𝗻𝗲𝗱: That experience taught me the hidden costs of poor supplier relationships: ➡️ Lost Agility: Without trust, suppliers are less willing to adapt during crises. ➡️ Higher Total Cost: Low price doesn’t mean low cost. ➡️ Missed Innovation: Strong suppliers often bring ideas to the table, but only when they feel valued. Now I’ve shifted my focus from just negotiating contracts to building partnerships. 𝗧𝗵𝗶𝘀 𝗶𝗻𝗰𝗹𝘂𝗱𝗲𝘀: 💎 Investing time in supplier development. 💎Ensuring open communication channels. 💎Recognizing their wins as much as ours. Today, my best supplier relationships feel more like strategic alliances. When problems arise, we tackle them together because trust has already been built. 🚀 𝗠𝘆 𝗔𝗱𝘃𝗶𝗰𝗲: Whether you’re in procurement or supply chain, don’t overlook the power of relationships. They aren’t just suppliers; they are your partners in success. 📢 Have you ever faced hidden costs from poor supplier relationships? How did you turn it around?

A $4B 3PL lost two major enterprise accounts last quarter for reasons that had nothing to do with their operational excellence, warehouse capacity, or pricing. They lost because of their horrible tech stack. The brands moved to a smaller 3PL that had inferior operational capabilities but better technology. This will keep happening across the industry as legacy 3PLs lose market share to tech-forward competitors. One of our 3PL partners faced this exact challenge last year. Brands kept asking about direct connections to NetSuite, TikTok Shop, Walmart, and Amazon during sales calls. Their answer was always "We'll need 6-9 months for custom integration work." In December, they changed from offering custom integrations, to offering immediate connectivity through Pipe17. Their sales cycle dropped from 90 days to 14 days. They closed more enterprise deals in Q4 than the previous three quarters combined. Implementation time decreased from 6 months to 6 weeks. A brand who switched to them needed connections between NetSuite, TikTok Shop, 15 Shopify stores, and 7 Amazon stores. Under their old model, this would require $300K in upfront integration costs and 9 months of development. They completed it in 41 days with zero custom development. Legacy 3PLs running AS400 systems and clunky warehouse management software built for retail in 2005 will continue losing market share. The modern brand CFO won't sign off on 6-figure integration costs and 9-month implementation timelines. If slow onboarding is still holding back growth, it’s time to rethink the tech stack. Forward-thinking 3PLs focus on smooth operations while using modern technology for connectivity. The WMS you use matters less than your ability to connect it seamlessly with brand's commerce channels.

I was recently working with a company re-evaluating its third-party logistics provider (3PL). A new VP of Supply Chain had stepped in and felt the relationship wasn’t delivering value, so he was ready to launch an RFI/RFP. The incumbent 3PL was well known and, based on my experience, had a solid reputation. As we dug into the situation, it became clear the issue wasn’t the provider’s capability; it was the absence of a true partnership. Companies leverage 3PLs for many reasons, including: ✳️Leveraging existing investments in facilities, equipment, and systems ✳️Faster entry into new markets and geographies ✳️Access to flexible labor pools for seasonal or highly variable volumes ✳️Allowing internal teams to focus on core competencies ✳️Applying proven 3PL best practices to reduce cost-to-serve Over my career managing multiple 3PL-supported operations, one lesson stands out: value comes from relationships designed for shared success. That starts with: 1️⃣Business-critical KPIs and SLAs that drive accountability 2️⃣Clear visibility into performance and disciplined communication 3️⃣Rapid corrective action when performance is out of tolerance The next level is sharing in the benefits of improvement. Pricing models matter—because contracts drive behavior. Many companies default to transactional pricing. Even in stable operating environments, that approach rarely encourages collaboration. In those models, efficiency gains often benefit the 3PL alone. Cost-plus or open-book models provide transparency, but without improvement incentives, they can create tension rather than trust. A well-structured gain-share / pain-share layered onto a cost-plus model can change the dynamic. When done right, both parties share in the upside of performance improvements—and the downside when results fall short. It aligns incentives, reduces adversarial behavior, and promotes joint problem-solving. Of course, fundamentals matter. Baseline assumptions must be rock-solid, and accessorial charges for unforeseen touches can escalate costs quickly if not well defined. Before signing any agreement, consider: ·      Clear baseline pricing assumptions ·      Volume bands and variability ·      Surcharges and accessorial charges ·      Incentives and penalties ·      Flexibility as the business evolves When working with a 3PL, look for agreements that encourage the success of both the client and the provider. I’m curious what contract structures you see that create truly successful client-3PL partnerships? #warehouses #3plpartnerships #supplychain #continuousimprovement

Imagine Barry's frustration as 40% of his e-commerce margins vanished into shipping costs. 📦💸 His business was growing, but profitability felt like an endless battle against logistics expenses. Ever faced a similar challenge? Barry's situation was all too common in our industry. Expensive carriers for every shipment, oversized packaging driving up costs, and zero visibility into supply chain operations were creating the perfect storm. Here's how we streamlined operations at our state-of-the-art facilities and achieved a remarkable 60% cost reduction: 🚀 Optimized carrier selection: We analyzed shipping patterns and matched each order type with the most cost-effective solution, reducing average shipping costs by 35% 📦 Right-sized packaging solutions: Implemented automated packaging optimization that eliminated dimensional weight charges and cut material costs by another 15% 🏢 Strategic 3PL partnerships: Connected Barry with facilities in optimal locations, cutting warehousing costs by 25% while improving delivery times 📊 Enhanced real-time visibility: Integrated inventory management systems that prevented costly stock discrepancies and boosted customer satisfaction scores by 40% The results went far beyond cost savings. Barry's delivery times improved from 5-7 days to 2-3 days for 97% of his customers. Through white label fulfillment solutions, his brand maintained its identity while customer complaints dropped by 70%. Most importantly? Barry shifted from wrestling with daily logistics fires to focusing on business growth and scaling his operations. The key insight: Complex supply chain challenges require strategic, data-driven approaches rather than quick fixes. What logistics challenge is currently holding your business back? 🤔 #EcommerceSolutions #LogisticsExcellence

After working for 3PL's for about 10 years There are 3 mistakes brands make when looking for a new 3PL. Do the opposite of these. #1 - Neglecting Cultural Fit and Communication Styles The relationship with your 3PL is more than just transactional; It is a long term "marriage." Avoid underestimating the importance of cultural fit and effective communication. Misaligned values or communication breakdowns can lead to frustration and inefficiency. Questions you should ask yourself ⬇️ Do you want a slack channel for you and your 3PL? Do you want an account manager on the ground at the warehouse? How quickly do they respond to your inquiries during procurement? (Its probably an indication of what the relationship will be like) Who are the types of people that work at the 3PL? What background do they have? Is it in logistics/supply chain? #2 - Not doing enough thorough research This is the one that bites people in the ass the most. You dont 25 different 3PL's in the mix. You need a solid 5. Better to go a mile deep than a mile wide. As a sales rep - this next part is kind of counterintuitive. Don't take the sales pitch at face value. Look for objective, third-party opinions and reviews to get a well-rounded understanding of their capabilities and service quality. Sure, sites like G2 and Trust Pilot are good but go deeper. Ask the 3PL for client referrals. Even better - go to their customer testimonial page and reach out to the brand by yourself. Go to e-com communities (Reddit, Facebook) - try to get in virtual or in person reviews of the 3PL performance. Once you dwindle down the list to your top 2-3 Then start understanding the company financials. I have seen many 3PL's either been shut down due, forcing merchants to leave abruptly. This is a crucial step. # 3 - Overlooking Scalability and Flexibility: You are, ideally, finding a 3PL partner for the next 3 years. Not the next 6 months. As your business grows, your logistics needs will evolve, and your 3PL should be able to accommodate this growth. Ask how they have supported the growth of brands throughout the years. The answers, or lack thereof, will be telling. Have them give you an example (or two) of them bending over backwards for a client when times got tough. Ask them how peak 2023 season went. Don't take "good" as a surface level answer. Ask more specific questions. Ask to what extent they dealt with large processing delays. What their average delivery time was. Any unexpected situations that came up and how did they handle them? I could go on forever, but these 3 areas are often most overlooked. The more you know, the better you will be choosing the right partner . #3PL #logistics #supplychain