3PL Selection & Contracting

Sample Project


The Client
The client is a specialty pharmaceutical company operating globally. Physical distribution in Canada is handled by a third party logistics service provider.

The Need
The client’s current 3PL contract was reaching expiry. Management wanted to test the market and ensure it was maximizing value. SCS was asked to support the process of going to the market.

The Approach
SCS provided guidance and support for the process at key points. We started by clarifying the client’s requirements, which included some that are non-standard in this market.

We then:

  • Provided guidance and industry standards regarding key performance indicators
  • Performed reference checks and obtained industry input regarding fee structures, incentives and penalties
  • Provided input regarding insurance coverage
  • Examined transportation costs, particularly fuel surcharges
  • Assisted in structuring and wording the contract to protect the client’s interests

The Output
SCS prepared various documents to assist the client, working within the time constraints. Most importantly, we provided comparative information for reference and extensive input to the preparation of the contract.

The Impact
The client selected a 3PL service provider that is able to provide the full range of services required. The new contract will deliver on the client’s objectives, including trimming costs from the operation and maintaining stringent service requirements.