Establish a business relationship with a logistic company.
A logistics company is a company that stores and ships other companies’ products. They can specialize in importing and exporting goods into and out of the country, or they can specialize in ground transportation in the region. Whether by sea, truck or air, a successful logistics company must own the means of transport [1].
Logistics companies are involved in planning, executing and controlling the movement and storage of goods, services or information within supply chains and between points of origin and consumption. The origins of logistics can be traced back to the military. For example, it was used during World War I and World War II to quickly transport food, weapons, and other related supplies [2].
Negotiate terms with the logistic company.
Analyze transport procedures before negotiating with any logistics provider. Issues to consider include the shipment volume that the new agent will handle, according to “Inbound Logistics.” Whether goods move by air, ocean or truck also makes a difference. For example, management may have to review if ocean shipments sail as container loads or break-bulk freight, which refers to goods packed in small, separable units. Answering those questions will help the shipper determine his needs[3].
What to consider while negotiating: From a logistics service provider’s perspective, liability for damage to products is a way for the shipper to ensure that the service provider will do its utmost to handle products with care. From a shipper’s perspective, this liability for damage to products is sometimes considered full coverage for all possible damages in the supply chain. While it might be the natural tendency to allocate damage or loss to the party in physical possession of the goods, common practice in trade and commerce is to limit the amount or extent of logistics service providers’ liability[4].
Establish an affiliate or partnership agreement with the logistic company.
A Partnership Agreement is a contract between two or more business partners. The partners use the agreement to outline their rights responsibilities, and profit and loss distribution. The agreement also sets the general partnership rules, like withdrawals, capital contributions, and financial reporting. LawDepot’s template allows you to create a general partnership agreement[5].
Once a logistics-services agreement is signed, establish an effective governance process. Governance refers to the methods and processes of managing the relationship to ensure that the provider performs at an acceptable level. The logistics manager is responsible for incorporating key performance measures for the provider into the agreement. These measures can include a description of services, monthly operational reviews, and quarterly executive-business reviews[3].
