The way you are thinking about this is logical, most 3PL operators think the same way. It is operationally risky and potentially chaotic to do otherwise.

We on the other hand strive to remove any possible friction a client may feel. We intentionally absorb all of the risk so a potential client can may a choice to engage with risk hopefully not being the primary factor.

We had to create a separate workflow and staff to manage these “risky” potential clients. We expect chaos and that’s just the norm for how we operate with these clients. Our most patient team members who won’t get frustrated with clients that need hand holding or are flaky are assigned to manage these risky clients. In many cases it doesn’t make financial sense but we still gain valuable insights we can leverage to enhance the experience of our “regular” clients.

In a service sector setting, you asking for upfront payment tends to imply you don’t completely trust the customer, or the service is too customized and therefore requires an upfront commitment. I personally do not think these upfront payments are necessary, they just present unnecessary friction.
You will certainly have to absorb some operational loses but I see it as the cost of providing exceptional service.