How to Review a Contract with a 3PL Partner: A Guide to MSA’s and the Review Process

When you partner with a third-party logistics (3PL) provider, the contract you sign does more than outline services and pricing. It defines how you’ll work together, what protections are in place, and how the partnership can grow over time.

A thoughtful business contract review helps both parties safeguard their interests without slowing down collaboration. Knowing how to review a contract and what to expect in a Master Services Agreement (MSA) ensures that you walk into the relationship with clarity and confidence.

This guide covers:

• When to start contract discussions in the sales cycle
• Who should participate in the review process
• The steps involved in a thorough contract review procedure
• What belongs in a well-structured MSA
• Specific tips for last mile delivery

The goal is to establish an agreement that not only mitigates risk but also supports a long-term, successful partnership.

When Should Contract Discussions Begin in the Sales Cycle?

Contract talks should begin as soon as a solution proposal is presented. Most proposals are built around a minimum three-year term, and components such as pricing, scope, and service commitments often hinge on that duration.

Raising issues like payment terms, cancellation rights, or insurance late in the process can create last-minute roadblocks. Addressing these items early, such as during the proposal phase, will reduce the chance of costly delays and wasted effort.

Who Should Be Involved in the Contract Review Process?

Both sides need the right mix of stakeholders to evaluate the contract thoroughly.

On the client side:

• Legal: Reviews the contract for compliance and risk.
• Operations: Checks the statement of work (SOW), assumptions, and pricing against what was proposed.
• Senior leadership: Brings execution experience, evaluates the impact of changes, and provides final approval.

On the 3PL side:

• Sales: Owns the proposal and SOW, ensuring what’s written matches the solution presented.
• Legal: Redlines clauses involving liability, indemnification, termination, and insurance.
• Finance: Reviews billing, payment terms, and claims provisions.
• Operations: Confirms assumptions, operating parameters, and SLAs are accurate.
• Senior leadership: Signs the contract and evaluates significant language changes.
• Specialists (as needed): IT, HR, or Safety may weigh in on privacy, workforce, or compliance matters.

When each party knows its role in the process, reviews move faster and teams avoid unnecessary back-and-forth.

Steps in the Contract Review Procedure

1. Start Reviewing Contacts Early in the Selection Process – Begin reviewing the MSA template once you’ve narrowed your options to a short list of providers. Early review highlights potential deal breakers and ensures you’re comparing candidates on fair terms.
2. Decide Whose Contract Will Be Used – Agree upfront whether the client’s or the 3PL’s contract will serve as the baseline. This sets expectations and prevents confusion later.
3. Review Legal Provisions and Identify Risks – Assess critical provisions such as liability, indemnification, termination, and insurance. Addressing these early reduces surprises during final negotiations. This is a central part of any business contract review.
4. Manage Redlines and Revisions Collaboratively – Expect redlines from both sides. Schedule time to walk through the reasoning behind changes, then decide whether to accept, reject, or negotiate alternatives. Protect your non-negotiables while staying open to compromise.
5. Involve the Right Stakeholders in Each Review Phase – Departments such as legal, finance, operations, and leadership should review their specific areas. Coordinated reviews prevent bottlenecks and conflicting feedback.
6. Finalize and Approve the Contract – Once revisions are resolved and stakeholders are aligned, move to execution. A signed agreement should leave both parties clear on responsibilities and confident about next steps.

What Should Be Included in the Masters Services Agreement (MSA)?

Legal Provisions

The legal framework defines rights, responsibilities, and obligations. Provisions around payment, confidentiality, termination, cure periods, and dispute resolution reduce ambiguity and protect both parties.

Statement of Work

The SOW outlines scope, deliverables, timelines, and responsibilities. It serves as a roadmap and ensures everyone is aligned on what success looks like.

Pricing

Pricing must tie directly to the SOW. As operations evolve, changes in scope may impact pricing, so terms should account for adjustments.

Assumptions and Operating Parameters

Assumptions and parameters are the foundation of the SOW and pricing. Alignment here is critical, especially when comparing 3PL proposals. An apples-to-apples review prevents costly mistakes. Here are a few examples:

• A common assumption is the number of stops per truck. For example, if one provider assumes 8 stops per truck at $80 per stop ($640 total) and another assumes 10 stops at $70 per stop ($700 total) you aren’t able to accurately compare stop rate and total costs.  Routing accountability plays a role but you need to compare stops per truck at an even level.  Learn more about last mile delivery contracts.
• Miles per route
• Time in the home
• SOP’s requirements for white glove delivery

Supporting Documentation

Items like certificates of insurance or compliance reports may be necessary depending on the scope of services.

What is the Recommended Term and Why?

A term of at least three years is generally recommended. Longer terms often unlock pricing discounts and provide enough runway to optimize operations. More importantly, they allow time to build a stable, productive partnership. Switching 3PLs too frequently is costly, disruptive, and erodes service quality.

Key Takeaways from the Business Contract Review Process

• Start contract discussions early to avoid wasted effort.
• Involve the right stakeholders from both organizations.
• Address legal provisions and redlines collaboratively.
• Align assumptions, pricing, and operating parameters for clarity.
• Approach negotiations in good faith, protecting what matters most while remaining open to compromise.

Successful contract reviews are built on communication and collaboration. Clear agreements reduce risk and set the stage for long-term success.

Build a Stronger Partnership with FIDELITONE.

FIDELITONE has decades of experience helping brands build resilient, high-performing supply chain partnerships. If you’re preparing for a contract review or need guidance on last mile delivery, fulfillment, or logistics agreements, our team is here to help.

Contact us today to discuss how we can support your next partnership.