Decoding Last-Mile Delivery Contracts: Key Considerations for Logistics Companies

Whether a last-mile delivery company partners with a small retail chain or a massive, multi-state organization, establishing last-mile delivery contracts for each partnership sets concrete expectations and boundaries for both parties. A last-mile delivery contract covers everything from pricing and insurance coverage to pickup and delivery schedules.

These contracts should leave no stone unturned, providing last-mile delivery companies and independent couriers with legal protection and a smooth working relationship with their partners and vendors.

In this guide, we’ll discuss last-mile delivery contracts in more detail, including how they benefit your organization and important elements to include.

In this article:

• Key Terms & Clauses in a Last-Mile Delivery Contract
• 5 Benefits of Having a Solid Last-Mile Delivery Contract
• Solid Contracts + An Automated Last-Mile Solution = Wins for Logistics Companies
• Frequently Asked Questions

Key Terms & Clauses in a Last-Mile Delivery Contract

An airtight contract between last-mile delivery providers and the businesses they serve gives both parties some control and security in the partnership. The specific topics or elements in a contract are typically called “clauses.” Clauses outline the rights and obligations of the parties involved.

Each clause addresses a particular aspect of the agreement, such as payment terms, delivery of services or goods, confidentiality obligations, termination conditions, dispute resolution methods, and more. Additionally, contracts often start with definitions of key terms used throughout the document to ensure clarity and prevent ambiguity.

Prioritize including the following information in a last-mile delivery contract:

Pricing

Pricing for your partnership should be a top priority for inclusion in a last-mile delivery contract.

Will the partnered business pay the last-mile service monthly, quarterly, or annually? Are there any add-on services or busy periods that could affect pricing?

Also, include how payments and, if necessary, late payments will be handled.

Discover how Wise Systems can help your business manage last-mile delivery costs. Book a demo today.

Scheduling and Logistics Expectations

Spell out the type and frequency of services that last-mile delivery drivers will provide.

For example, will they pick up from a location multiple times per day or make one or two stops each week? Will they provide delivery to commercial locations or only residential locations? Are there certain time expectations for pickups and deliveries?

This information is necessary to set clear expectations for partners.

Performance Transparency

Logistics companies using performance management software should consider including transparency about performance benchmarks, goals, and key performance indicators (KPIs) in their contracts.

Allowing partnered businesses to monitor the performance of last-mile delivery drivers can create trust between parties. List the tools you use and how you plan to allow partnered companies to access performance reports.

With the Wise Systems delivery automation platform, you can monitor performance and streamline your last-mile delivery operations. Request a demo today to learn more.

5 Benefits of Having a Solid Last-Mile Delivery Contract

Contracts are key to business-to-business relationships, and for logistics companies, last-mile delivery contracts with partners and service providers are no exception. For a last-mile delivery contract to do its job, it should include protections and set expectations for both parties, leading to the following potential benefits.

• You get the right type of partnership for your needs: Issues can arise at any point in a partnership, but identifying potential problems before they happen can prevent bottlenecks down the road. A clear contract detailing what’s expected from the partnership can help weed out partnerships that aren’t a good fit from the start.
• You set clear expectations: Last-mile delivery contracts lay out all expectations for both parties, like indemnification clauses, pricing for services, the service schedule, insurance coverage limits, etc. A comprehensive contract leaves no room for interpretation down the road.
• You could avoid costly errors: If one of your last-mile delivery service partners makes an error resulting in customer dissatisfaction, the onus is ultimately on your business to make things right. However, depending on the terms of your agreement, your organization could then seek a remedy from the provider to recoup its losses. Again, transparent rules for such situations must be outlined in a contract.
• You lay the groundwork for legal protections: Contracts are there to protect both parties. If one side violates the terms of the agreement, the other side may have legal rights. A detailed contract can prevent legal loopholes, giving each party an easier path toward taking action.

Solid Contracts + An Automated Last Mile Solution = Wins for Logistics Companies

Autonomous routing and dispatching is not only necessary, but is the future for many last-mile operations. Learn where your last-mile operations are today and make your AD&R plan. https://t.co/s5fAP9Ms4M pic.twitter.com/DK5fLF2Juq

— Wise Systems (@goWiseSystems) April 24, 2023

With an easy-to-follow yet thorough contract to pair with an automated last-mile solution for fleet management, logistics companies should be in an excellent spot to boost productivity and efficiency while reducing costs, errors, and dissatisfaction.

Wise Systems has everything you need to manage your fleet intelligently, including route planning and real-time fleet visibility — you only need to worry about creating a foolproof contract.

See what Wise Systems can do for you. Request a free demo today to get started.

Frequently Asked Questions

What are the signs of a trustworthy last-mile delivery provider?

Trustworthy last-mile delivery providers typically have a solid history of partnerships with other companies willing to give testimonials about their experiences. They also have excellent insurance coverage, and their employees are up-to-date with industry standards and compliance. Many of the best delivery services use strategic fleet management technology to optimize their routes and schedules.

Who should create a last-mile delivery contract?

Either a logistics company providing last-mile services or the prospective business partner or vendor can create a contract. However, both parties should be able to negotiate the terms of the contract to ensure the partnership is mutually beneficial. The non-writing party should have their attorney review the contract before signing.

How can companies ensure a smooth last-mile delivery experience?

Companies should be careful about selecting the last-mile delivery providers they work with. Make sure the providers offer the type of last-mile services your company needs, and have a detailed and transparent contract in place before beginning your partnership.

Logistics companies should ensure their team has the latest last-mile technology available to optimize routes, provide real-time tracking, and improve customer satisfaction.