Why So Many Fulfillment Partnerships Fail

If you have ever experienced or witnessed the breakdown of a once-promising client-3PL relationship, you probably know that no one on either side enters a logistics partnership with negative intentions. Instead, as time goes on, events and interactions occur that start to sour the relationship — and that can trigger a downward spiral. Things like:

• Conversations that turn into email strings to maintain a record
• Painting over problems instead of trying to solve them 
• An unaddressed rise in mis-shipments, damage claims, and other errors

In fact, well over half of shippers say that poor customer service is the top reason for ending a 3PL partnership. But in truth, failure — unfixable, irretrievable collapse — is not very common. More often it’s an erosion of confidence and trust that, while never quite killing the relationship, corrodes it. Partnerships become mutually destructive; neither partner wants to accept responsibility, admit the relationship is flawed, or walk away. Attempts at resolution are met with skepticism and paranoia.  

Instead of a partnership, the 3PL turns into a vendor for the brand and the brand becomes a revenue line item for the logistics provider.

Triggers of Breakdown

The saddest part of this reality is that most of the problems that erode trust in a 3PL partnership can be avoided. Here are some root causes that can cause 3PL-client relationships to break down:

Inflated Expectations

A lack of information can be detrimental to a partnership. This might happen when a brand is trying to extricate itself from a previous 3PL relationship, or if a 3PL is so eager to sign a new client that they rush vetting and onboarding. In the hurry to sign the dotted line, parties in these situations often fill in the lack of information about each other with assumptions. Over time, reality begins to supersede expectations but both parties hesitate to acknowledge the mismatch. What they see as an inability to live up to the contract is actually a simple lack of alignment. 

Poor Communication

Things don’t always work out as planned. Perhaps the forecasted volume doesn’t materialize. Or the product that was supposed to come in palletized comes in floor-stacked or without the expected barcodes. Maybe the brand is in retreat and trying Hail Mary promotions, products, or new lines of business. Or the 3PL finds itself understaffed or struggling to fill space and nickel-and-diming current clients to fill the gap. 

If the indicators of those issues aren’t shared early on, the other party feels a material impact — one that could be managed if things were out in the open. Subterfuge easily and quickly deteriorates trust. 

Ignoring Small Issues 

A missed shipment here, a late payment there: these things don’t necessarily warrant a lot of attention in isolation. But if they go unmentioned and unaddressed for too long, they eventually become visible and potentially destabilizing. Ignoring small issues, however trivial they may seem in the moment, is a characteristic of a relationship that lacks either the trust or the tools to remedy.

Leveraging Our First-Hand Experience

In earlier days, we saw the beginnings of this sort of breakdown in one of our own customer relationships.

This client shipped directly to consumers, and we began seeing small but persistent issues with orders being inaccurate, missed, or not transferred on a timely basis. We assigned multiple teams to investigate the issue in their disciplines, including IT, Customer Service, Ops, and Engineering.  We had leadership update the customer. But the problems persisted. Trying to nail down the source was like playing whack-a-mole. The customer relationship started to suffer.

That’s when one of our leaders suggested a daily, pre-morning shift stand-up with all stakeholders to share and communicate. Having all the constituents on one call talking and listening to each other ultimately helped solve the problem. This standup call is now mandatory for all our fulfillment operations regardless of whether there are problems or not.  It allows us to get ahead of any issues, plan better for the day, and ensure all stakeholders are aligned with the customer’s expectations.

Daily standups are just one of our hard-won best practices. We’ve worked hard to make WSI a true, strategic ally that treats our clients like people, not account numbers. We are deeply attuned to the intricate challenges inherent in client-3PL partnerships and have developed a set of best practices and principles that establish and nurture them, so all parties can be successful — together.