Throughput Agreements

A throughput agreement is essentially a service agreement in which Partner A agrees to store and manage product for Partner B for a specified time period. Partner B actually owns the stock that is stored in Partner A's depot, but Partner A monitors the stock level, suggests replenishments, and unloads, stores, and delivers product to the partner or its customers. Partner A might process customer sales for Partner B, or Partner B might simply pick up product for distribution to its customers. Partner A charges Partner B a service fee for managing, transporting, storing, and delivering product.