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Even the strongest commercial relationships can come under pressure when fuel costs, labour, capacity, demand or geopolitical conditions change. This article looks at how businesses can anticipate that uncertainty, allocate risk effectively and build flexibility into contracts, creating clear mechanisms for responding to change before it becomes a source of conflict.
About the series
The logistics sector is navigating significant commercial change. Margin pressure, rising customer expectations, geopolitical uncertainty, technological investment, acquisition-led growth and organisational complexity are reshaping how businesses compete and grow.
I am now in my 15th year at The Gap Partnership, having worked with clients across 37 countries, including 10 years supporting many of the leading organisations across transport and logistics. During that time, I have seen how difficult it can be to translate scale, capability and investment into sustainable value.
This six-part series explores commercial challenges that I believe are becoming increasingly important for the sector. These are observations rather than definitive answers, reflecting choices and challenges I regularly see in the organisations I work with.
A consistent theme is negotiation, not simply at the table, but the broader organisational capability to align stakeholders, understand value, manage risk, influence others and make better commercial decisions. As logistics becomes more complex, commercial advantage will increasingly come from what organisations do with their scale, technology, relationships and expertise.
In this chapter
Volatility is reshaping commercial relationships across logistics. I explore how organisations can allocate risk intelligently, build flexibility into agreements and prepare for uncertainty before it becomes a source of conflict.
Volatility has always been part of logistics. What has changed is the number of variables organisations must manage simultaneously, and the speed at which they affect commercial performance.
Demand, capacity, fuel and labour costs fluctuate, while geopolitical events, customer volumes, technology and regulation can quickly alter the economics of a relationship.
The challenge is deciding who carries uncertainty, how much and under what conditions. Increasingly, this is a strategic commercial decision that can materially influence margin, resilience and the customer relationship.
The cost of uncertainty
Risk is a commercial variable
Contracts attempt to allocate risk through pricing, commitments, penalties, indexation and liability provisions. However, risk does not disappear simply because it has been transferred contractually.
If one party carries risk it cannot realistically control or manage, the result may be higher pricing, reduced service, defensive behaviours, disputes or a damaged relationship. Equally, transferring too much risk can create commercial models that look attractive on paper but prove unsustainable in practice.
The question becomes less, “How do we transfer this risk?” and more, “How can we structure the relationship so risk is managed by the party best placed to manage it, at the lowest overall cost?”
Build flexibility into your agreements
Rigid contracts work when assumptions remain stable. When circumstances change, flexibility becomes critical to protecting both commercial performance and the long-term relationship.
Volume bands, indexation, review points, service triggers, capacity commitments and clearly defined change mechanisms can provide flexibility without constant renegotiation. They also create greater transparency around how changing circumstances will be addressed.
The objective is not to anticipate every scenario, but to establish sensible mechanisms for foreseeable uncertainty and clear principles for dealing with the unexpected.
Negotiate for the future, not just today
Strong preparation identifies the problems most likely to emerge and how they will be handled before they become points of conflict.
What happens if volumes fall? Capacity tightens? Costs move beyond agreed assumptions? Customer requirements change? Or a major external event fundamentally alters the economics of the relationship?
The objective is to identify uncertainties that could materially affect performance, economics or relationship value and develop credible contingency options before they become a crisis.
The strongest commercial agreements do not eliminate uncertainty. They create sufficient flexibility, transparency and shared accountability to manage it effectively when it inevitably arrives.
Recommendations:
- Stress-test the assumptions Identify where the commercial model could fail and assess the potential impact on cost, margin, service and the wider relationship. Challenge the assumptions underpinning volumes, pricing, capacity, performance and demand before they become embedded in the agreement.
- Map the risks Understand the operational, financial and commercial risks that could emerge across the life of the relationship. Consider not only the probability of each risk occurring, but also its potential impact and which party is best placed to manage it.
- Allocate risk intelligently Base risk allocation on capability, control and cost, not simply negotiating leverage. Risk should sit with the party best positioned to influence, mitigate or absorb it without creating unnecessary cost or undermining the sustainability of the relationship.
- Build flexibility into contracts Use appropriate mechanisms for pricing, volumes, capacity and changing circumstances. Well-designed flexibility can protect both parties when assumptions change while avoiding the need to renegotiate the entire commercial model.
- Agree triggers in advance Define what should trigger review, escalation or commercial change before issues arise. Clear thresholds and decision rights create greater transparency, reduce ambiguity and enable faster, more objective responses when circumstances move beyond agreed parameters.
- Rehearse contingencies Develop and test responses to scenarios that could materially affect the relationship, from significant volume changes to capacity constraints or major cost movements. Preparing credible options in advance strengthens resilience and ensures decisions can be made quickly when uncertainty becomes reality.
- Agree, as part of the contract, how you are going to manage unanticipated risks together? What mechanisms will you use? What will be the structure of your communication? How will you arbitrate?
The best commercial agreements do not pretend uncertainty does not exist; they decide how both parties will deal with it when it arrives.
Conclusion
Uncertainty cannot be contracted away. Stronger agreements recognise it, allocate risk to the party best placed to manage it and establish mechanisms for change before commercial pressure turns uncertainty into conflict.
Next in the series: “The hardest negotiation happens before you enter the room”
External leverage can be undermined by internal misalignment. Chapter 4 explores why objectives, decision rights and trade-offs need to be resolved before a team sits down with the customer.
How The Gap Partnership can help you
The Gap Partnership turns negotiation into a strategic advantage. With the scientific depth of Negotiation Academy Potsdam and the AI expertise of Passion Labs, we operate at the intersection of behavioural mastery, science and AI. We equip your teams with the skills and mindset to negotiate brilliantly, help you standardise negotiation for consistent results, and work with your leaders to build a culture where collaboration and alignment drive performance. Let us help you embed negotiation into your organisational DNA and unlock sustainable growth in every deal.
Richard Jones is a partner at The Gap Partnership and a leading expert in negotiation strategy and execution. With 15 years’ experience across a broad range of sectors, he has advised clients in 37 countries on complex, high-value negotiations. He specialises in cross-cultural negotiation, strategic partnerships and commercial strategy, helping global organizations strengthen capability, create value and achieve better commercial outcomes.
