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A contract warehouse is a third-party logistics (3PL) storage facility that stores goods on behalf of a client. The client and the warehouse enter into a contract, which can range from months to years. The agreement may have a fixed fee structure or operate on a cost-plus model.
Contract warehousing can also apply to just part of a warehouse. For example, a company may commit to a contract warehousing arrangement for 30,000 square feet out of a 130,000-square-foot warehouse. The 3PL can use the rest of the empty space for shared warehousing or even other contract arrangements.
A typical 3PL agreement will include: Statement of work (SOW) and the 3PL services you are contracting for. The standards of performance, or Service Level Agreements (SLAs). The pricing of all quoted services with the 3PL vendor.
A contract warehouse is a third-party logistics (3PL) storage facility that stores goods on behalf of a client. The client and the warehouse enter into a contract, which can range from months to years. The agreement may have a fixed fee structure or operate on a cost-plus model.