Service Level Agreement
A service level agreement (SLA) is a contract that sets performance targets between a brand and a logistics provider, such as same-day ship rate, order accuracy, and dock-to-stock time, often with penalties for misses.
Why it matters for ecommerce brands
An SLA turns a 3PL's promises into measurable targets with remedies, so how each one is defined matters as much as the number. Common SLAs cover same-day ship rate, order accuracy, inventory accuracy, and dock-to-stock time. A 99.5% accuracy SLA measured on audited samples is weaker than one measured on customer-reported errors. For example, at 20,000 orders a month, 99.5% accuracy still allows 100 wrong orders, while 99.9% allows 20. Ask who measures each target and what credits apply when one is missed.
Common questions
- What should a 3PL SLA include?
- Common terms include order ship time after cutoff, receiving time, order accuracy, inventory accuracy, and how failures are credited or remedied. Clear definitions matter as much as the targets.
- What is a good order accuracy rate for a 3PL?
- Many 3PLs advertise order accuracy of 99.5% to 99.9%. Ask how errors are counted, since a rate based only on internal audits can look better than one based on customer complaints.
- What happens when a 3PL misses its SLA?
- It depends on the contract. Remedies range from fee credits on affected orders to corrective action plans, and repeated misses may let you terminate without penalty, so write these terms into the agreement.