What to do if your 3PL provider goes into administration

It’s been making news headlines too often lately and chances are it’s either directly or indirectly affected a company you know of – businesses going into administration. The recent surge in corporate insolvencies across Australia has significantly impacted various sectors, including third-party logistics (3PL) providers.

In the 2023–24 financial year, over 11,000 companies entered external administration, marking a 39% increase from the previous year. Whilst the data shows that insolvencies are rising, businesses that are at risk of external administration can take proactive steps to improve their chances of survival and also protect their clients and vendors the fallout.

A notable case highlighting the repercussions of 3PL insolvency is the collapse of freight forwarder and customs agent Lion in late 2024. This event disrupted supply chains for several businesses, including one of Australia’s furniture retailers, Nick Scali, which faced delays in container deliveries at ports. The delays threatened Nick Scali's ability to meet its first-half earnings targets for the 2025 financial year and led to unexpected additional storage and detention costs. ​

When a 3PL provider becomes insolvent, businesses relying on their warehousing and distribution services face significant disruption, risking substantial operational downtime and financial loss. Similarly, creditors and administrators managing insolvency confront challenges in effectively liquidating warehouse assets.

Here’s practical guidance on dealing with insolvent 3PL companies to protect inventory, maintain business continuity, and ensure effective asset management.

Immediate steps for clients of insolvent 3PLs

1. Rapid situation assessment:

• Immediately confirm the location, status, and security of your inventory when your 3PL provider goes into administration.
• Establish direct and frequent communication with the external administrator or appointed liquidators to gain clarity on timelines and procedural requirements.
• Quickly identify your rights under existing customer contracts regarding inventory removal and asset access.

2. Secure your inventory:

• Prioritise swift action to secure and recover your inventory from the affected 3PL facility to prevent potential loss or damage.
• Engage legal counsel early to support inventory retrieval negotiations and manage any associated disputes effectively.
• Consider short-term storage solutions, if necessary, to safeguard your products while transitioning to a new provider.

3. Ensuring business continuity by finding a reliable alternative:

• Actively seek alternative logistics solutions to avoid interruption to your supply chain and minimise operational downtime.
• Engage uTenant immediately to leverage our extensive national network and find a suitable, fully-vetted 3PL partner swiftly.
• Utilise uTenant’s matching expertise and Warehouse Storage & 3PL sourcing platform to save critical time and resources. uTenant can rapidly connect your business to reliable 3PL providers who understand your unique operational needs.

Guidance for Administrators

1. Managing customer contracts and inventory:

• Quickly audit client inventory holdings and contractual obligations to gain a clear understanding of the immediate logistical impacts.
• Communicate clearly and proactively with clients to inform them about timelines, access to their goods, and steps required to retrieve inventory.
• Engage uTenant’s supply chain specialists for strategic advice on effectively managing client transitions and contractual obligations.

2. 3PL asset liquidation:

• Conduct a thorough assessment of the 3PL's warehouse assets, including pallet racking, Material Handling Equipment (MHE), and other storage infrastructure.
• Leverage uTenant’s national vendor network to connect swiftly and securely with qualified asset purchasers, ensuring maximum recovery value and efficient liquidation.
• Connect with uTenant’s team of supply chain experts and allow us to assist with marketplace connectivity for asset evaluation and buyers, reducing your administrative burden and improving outcomes.
• Benefit from uTenant’s marketplace connectivity and warehousing expertise, to sell racking, and sell MHE promptly - reducing your administrative burden. Additionally, uTenant’s expertise in Industrial Property and partnership with JLL can help you

3. Supporting client transitions:

• Facilitate smooth client transitions by referring them to reliable replacement 3PL providers.
• Utilise uTenant’s rapid matching service to find ideal logistical solutions quickly, supporting ongoing client operations.
• Proactively assist clients impacted by the insolvency by referring them promptly to alternative, reputable 3PL providers.
• Engage uTenant’s rapid-response matching service to facilitate smooth, efficient transitions that minimise client disruption and safeguard ongoing business operations.

Why use uTenant’s services to help when a 3PL provider goes into administration?

uTenant provides immediate solutions by quickly connecting you with qualified 3PL partners, minimising disruption to your business and ensuring uninterrupted deliveries to your customers. When urgently seeking a new 3PL provider, uTenant’s Warehouse Storage & 3PL sourcing platform should be your first step.

Our extensive nationwide network of logistics providers and potential asset purchasers guarantees a rapid response and efficient matching of your specific requirements, which is critical during insolvency events where timing is essential.

We also offer comprehensive asset liquidation support by swiftly connecting administrators with reliable buyers, maximising asset value recovery while minimising administrative workloads.

As a trusted industry partner with proven supply chain experience, uTenant supports both clients and administrators in navigating insolvency crises, helping you effectively and confidently manage challenging supply chain disruptions.

For immediate support during a 3PL insolvency crisis reach out to uTenant

When a 3PL provider becomes insolvent, businesses relying on their freight, warehousing and distribution services can face severe disruptions, risking significant operational downtime and financial loss. These developments underscore the critical importance for businesses to have contingency plans in place when their 3PL partners become insolvent.

uTenant’s deep understanding of logistics and warehousing allows us to deliver targeted, practical solutions tailored to crisis scenarios, significantly reducing risk and operational disruption.

In times of logistical crisis due to insolvency, acting swiftly is critical. uTenant simplifies these complex transitions, safeguarding your inventory and business continuity.

For immediate support, contact the uTenant team today

Published: 31 March 2025