Most brands pay carrier rates that are 30–50% higher than they need to. Not because carriers are unkind — they price by volume, and a small brand simply doesn’t have the leverage. The fix is pooling: someone else negotiates on behalf of many brands at once, and you ride on the contracted discount. The question is whether the 3PL prices that shipping to you transparently.
How carrier negotiation actually works
UPS, FedEx, and USPS all run rate cards. The published rates are what walk-up customers pay. Anyone shipping more than a token volume gets a contract with discounts off-the-list. The discounts compound with volume — the difference between 100,000 packages a year and 1,000,000 is significant. Most ABDL brands ship a few thousand. Pooled through a 3PL, they look like the bigger number.
Negotiation happens through an annual or semi-annual conversation. The carrier reviews the pool’s shipping mix (zones, weights, services, accessorials), benchmarks against the book, and offers a sheet. Brands sometimes hire freight consultants to do this conversation for them — but consultants typically charge a percentage of savings, which makes them long-term expensive.
How shipping should appear on your invoice
Whatever 3PL you work with, the answer to one question is what matters: can I see the carrier’s actual cost separately from your markup on every shipment? If yes, the relationship is auditable. If no, run.
Our invoices show shipping as two distinct lines on every order: the carrier’s actual rate (UPS, USPS, FedEx — whichever service the order shipped on) and our shipping markup, applied per the rate set in your partner agreement. The markup is set up front, documented, and the same on every shipment of a given service.
Questions to ask any 3PL
- “Will my invoice show the carrier’s actual cost and your markup as separate line items?”
- “Is the markup a fixed percentage and/or a flat fee, or does it vary per shipment?”
- “How often do you reconcile against the carrier’s actual invoice — and what happens to the difference?”
- “Are there accessorial fees bundled into the markup or itemised?”
- “If I outgrow your pool and want to negotiate my own contract, will you co-operate on the transition?”
When pooling stops being worth it
Past about 25,000 shipments a year, a brand can usually negotiate directly with a carrier and beat what most 3PLs (including us) offer through pool pricing. We tell partners when they hit that point. We’d rather lose the shipping-markup line and keep the partnership than play games to retain volume.
“A 3PL that won’t tell you when you’ve outgrown them is a 3PL who’s priced you wrong from the start.”
What we charge
Shipping appears as two lines on every order in your portal: the carrier’s actual cost and our markup (a small % or flat fee, agreed in your partner contract). Receiving, picking, and storage rates are documented on the pricing page. If you ever spot something on your invoice that doesn’t reconcile to the carrier’s own tracking page, we’ll show you the math the same day.