In this episode of The New Warehouse Podcast, Jason Finkelstein, co-founder and partner of Logistics Resolve, discusses an often overlooked yet critical issue in logistics—the relationship between brands and third-party logistics (3PL) providers. Logistics Resolve focuses on repairing broken ties between brands and 3PLs, preventing costly terminations, and enabling long-term partnerships. Drawing from years of industry experience, Finkelstein shares how his team steps in to mediate, heal, and guide these essential relationships. Tune in to hear insights on what causes friction in these partnerships and how businesses can prevent their logistics “marriages” from ending in divorce.

The Five Big Issues Facing Brand and 3PL Relationships

Finkelstein identifies five common issues that cause relationships between brands and 3PLs to break down. “You always hear people say, ‘I hate my 3PL,’ or ‘3PLs suck,’” he notes. Two issues are on the 3PL side—forecasting problems and scope changes—while two are on the brand side—SLA performance and visibility. A lack of communication, which both sides share, often exacerbates these issues. “Communication is the first and the last issue we work on,” Finkelstein explains, emphasizing how much of the tension can be defused by having consistent and clear conversations between both parties.

Why Ending a Brand and 3PL Relationship is a Lose-Lose

Terminating a brand-3PL relationship can have significant financial and operational impacts. Finkelstein describes the process as “the biggest lose-lose in the supply chain.” On the 3PL side, the costs include loss of revenue, idle square footage, and potential staff cuts. For brands, switching providers can mean up to a 25% annual increase in fulfillment and small parcel costs. “We really talk a lot about the transition being incredibly risky and incredibly expensive,” says Finkelstein. Many problems brands hope to leave behind by switching often resurface because the root issues never get addressed.

How Communication Saves Relationships

According to Finkelstein, the key to preventing relationship breakdowns is proactive communication. He encourages brands and 3PLs to shift their mindset from seeking perfection to presuming good intentions and working together to solve issues. “Perfect is not the objective,” he says, adding that regular check-ins can help identify potential problems before they escalate. Logistics Resolve’s mediation process ensures both sides clearly understand each other’s expectations and commitments. “Our job is to get both sides talking in a solution-oriented mindset versus blaming each other,” Finkelstein explains.

Key Takeaways

• Five main issues cause brand and 3PL relationships to break down: forecasting, scope changes, SLA performance, visibility, and communication.
• Terminating a relationship can result in significant financial and operational costs (10%-25% of fulfillment +)for brands and 3PLs.
• Proactive communication and regular check-ins can prevent problems from escalating into irreparable conflicts.
• Logistics Resolve works to mediate and repair relationships, ensuring both sides stay aligned and focused on long-term success.

Episode 525: Healing Brand and 3PL Relationships With Logistics Resolve