Specificity of the logistics contract

Logistics has long ceased to be an auxiliary function of business. Today it is an independent flow management system. - goods, information and liability. That's why. logistic contract It plays a key role: it determines not only the list of services, but also the sustainability of the entire supply chain.

Let's see what's different. logistic contractsWhat forms they take, how the conclusion procedure goes and what you should pay attention to if you work with a logistics company.

What is a logistics contract and how it differs from related contracts

Logistics Services Agreement – This is an agreement under which the contractor undertakes a set of logistics operations: from transportation and storage to coordination of processes and flow management.

It is important to understand the difference from related structures:

• contract - Responsible only for the movement of cargo;
• transport expedition contract - focuses on the organization of transportation;
• deposit - limited to storage services.

Logistic contract integrates these elements into a single system. That is why it is often used in logistics outsourcing and long-term business service.

Types of logistics contracts

In practice, logistics contracts differ in terms of services and interaction models.

By type of service

• contract for the provision of logistics services;
• contract of transport and logistics services;
• logistic service contract;
• Logistics outsourcing contract.

By nature of operations

• contract for logistics services for transportation;
• contract for warehouse logistics;
• Contract for Multimodal and International Transactions.

By deadline.

• one-time contracts for a specific delivery;
• Long-term service contracts with fixed terms.

Often one contract combines several forms - This is normal for integrated logistics.

Parties to the logistics contract

Customer.

This is usually the shipper or owner of the goods. He is responsible for:

• correctness of cargo information;
• timely transfer of documents;
• compliance with packaging and labeling conditions.

Executive

A logistics company can play several roles at once:

• carrier;
• freighter;
• warehouse logistics operator;
• Chain coordinator.

Third parties

Within the framework of the contract, it is allowed to attract:

• subcontractors;
• agents;
• terminals and carriers.

It is important that the possibility of such involvement is directly reflected in the contract.

Subject and essential conditions

Subject of the Logistics Services Agreement - it provision of logistics operationsNot just physical transportation.

Usually included are:

• transportation;
• storage;
• loading and unloading;
• routing planning;
• preparation of accompanying documents.

Definitely fixed:

• characteristics of the cargo;
• volumes and batches;
• deadlines;
• routes;
• cost of services and procedure of calculations.

Without these conditions, the contract may be declared unconcluded.

Procedure for concluding logistic contracts

The procedure of conclusion begins long before signing.

Stages:

1. analysis of needs and logistics model;
2. verification of the logistics company;
3. harmonization of commercial conditions;
4. formation of a draft treaty;
5. Signature.

Form of detention

Allowed:

• written form;
• electronic format;
• Framework agreement + applications for operations.

In practice, it is the applications that specify the scope and timing of services.

Rights and obligations of the parties

The perpetrator shall:

• ensure the safety of the cargo;
• meet deadlines;
• operate within agreed routes;
• provide reporting.

The customer is entitled to:

• monitor the process;
• adjust applications;
• refuse services in violation of the terms of the contract.

Logistic outsourcing often uses KPI and performance indicators. - They should also be enshrined in the contract.

Liability and risk

Key issue - Distribution of responsibility.

The contract usually stipulates:

• Liability for loss or damage of cargo;
• fines for delays;
• procedure for recording violations.

Separate section - Force majeure. It shall contain:

• list of circumstances;
• Procedure for notification;
• consequences for the parties.

Insurance is not always necessary, but almost always reasonable.

Payment and settlement

Logistics contracts use different models:

• fixed rate;
• payment upon the provision of services;
• advance payments.

The basis for payment is acts of rendering services. It is important to determine in advance:

• timing of signature;
• Procedure for settlement of disagreements;
• Consequences of refusal to sign.

Modification and avoidance of contract

Any changes are made through additional agreements.

Termination is possible:

• by agreement of the parties;
• unilaterally (if provided);
• through the court.

Special attention should be paid to the conditions of automatic renewal - They are often a source of controversy.

Competently drafted logistics contract - This is not just a form of service. This:

• protection of business;
• predictability of operations;
• Reducing financial and legal risks.

If logistics - As part of your strategy, the contract should be as thoughtful as the supply chain itself.