How do I find out if a last-mile delivery business depends on a single retailer’s contract?

Start with the numbers. Ask for revenue, stops and parcels by client by month, going back several years. A summary that says the business has many customers can hide one that provides most of the work. Compare what you see with the bank deposits and the invoices to make sure the reports are complete.

Then read the contract. Look at its length, renewal, notice for ending, price adjustments, performance targets, penalties and whether volumes are guaranteed or only expected. Check whether the retailer may use other carriers, and whether the contract can pass to a new owner. Ask your lawyer to review it before you rely on it. Find out how the relationship began and who manages it on each side.

Next, test the dependence. If the retailer left, which routes, drivers and vehicles would be idle? Could the company win other work quickly, and has it tried? Ask whether the retailer has talked about its own fleet or a different provider. A conversation with the retailer, once the seller agrees, can show how it views the service. Ask what the retailer would do if the service failed for a week. Also look at how many drivers and vehicles are dedicated to that client, because that affects the cost of change.

Key takeaways

• Get revenue and volume by client for several years.
• Have your lawyer read the main contract’s term and exit wording.
• Work out what idle routes, drivers and vehicles would cost.