Episode Description
Steve Harmon runs Spartan Logistics - more than 4 million square feet of warehouse space across nine states, built over two decades into a regional 3PL serving brands like Pepsi and Owens Corning. And last year, he fired a billion-dollar client he'd served for twenty years.
Every truck went out two-thirds full, and the client still paid for the whole truck - but they refused to let Spartan make money on the relationship. So Steve ended it. That decision frames a candid, unusually practical conversation about the thing most founders haven't looked at in years: whether their logistics partner is actually helping, or quietly costing them.
In this episode of Profits on Purpose, Steve and Nate get specific about choosing and managing a 3PL: why freight is the biggest and least-understood line in logistics, why you're only as good as your local account manager, the reports founders never think to ask for, and the one question to put to your provider today - "what do you know about my business that I need to know?"
Key Takeaways
- Fire the customer who won't let you make money. A billion-dollar account that refuses to let you earn a margin is a liability, not a customer - and holding on to the wrong relationships blocks you from building better ones.
- You're only as good as your local manager. The name on the building means nothing if the person actually managing your account lacks the culture, systems, and communication to solve problems. Meet them before you sign.
- Freight is where the cost hides. It's the largest slice of logistics cost, and the people buying it usually aren't freight people. Start your evaluation there, then look at industry experience and IT.
- Watch cash, not just service. Ask whether shipping costs have drifted up as a percent of sales, and whether your 3PL gets you data fast enough to bill customers and collect your money.
- Ask for the reports you're not asking for. An inventory aging report (anything sitting 60+ days) and your OTIF rate (on time, in full) surface problems before they turn into chargebacks.
- The one question to ask your 3PL. "What do you know about my business that I need to know?" A partner who's paying attention has a real answer ready. If they hesitate, you have a problem worth solving before it hits your P&L.
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