Third-Party Logistics Partnerships

Imagine Barry's frustration as 40% of his e-commerce margins vanished into shipping costs. 📦💸 His business was growing, but profitability felt like an endless battle against logistics expenses. Ever faced a similar challenge? Barry's situation was all too common in our industry. Expensive carriers for every shipment, oversized packaging driving up costs, and zero visibility into supply chain operations were creating the perfect storm. Here's how we streamlined operations at our state-of-the-art facilities and achieved a remarkable 60% cost reduction: 🚀 Optimized carrier selection: We analyzed shipping patterns and matched each order type with the most cost-effective solution, reducing average shipping costs by 35% 📦 Right-sized packaging solutions: Implemented automated packaging optimization that eliminated dimensional weight charges and cut material costs by another 15% 🏢 Strategic 3PL partnerships: Connected Barry with facilities in optimal locations, cutting warehousing costs by 25% while improving delivery times 📊 Enhanced real-time visibility: Integrated inventory management systems that prevented costly stock discrepancies and boosted customer satisfaction scores by 40% The results went far beyond cost savings. Barry's delivery times improved from 5-7 days to 2-3 days for 97% of his customers. Through white label fulfillment solutions, his brand maintained its identity while customer complaints dropped by 70%. Most importantly? Barry shifted from wrestling with daily logistics fires to focusing on business growth and scaling his operations. The key insight: Complex supply chain challenges require strategic, data-driven approaches rather than quick fixes. What logistics challenge is currently holding your business back? 🤔 #EcommerceSolutions #LogisticsExcellence

I did an audit for a $2.6M brand last year.   They were using a 3PL that charged:  - $3.85 per order pick fee  - $0.65 per item picked  - $4.50 minimum fulfillment fee  - $12/pallet monthly storage  - $45/hour receiving fee   Seemed fine on paper.   Then I calculated their effective fulfillment cost per order.   For their average order (2.3 items), they were paying $9.20 per shipment once you factored in storage, receiving, and monthly minimums.   Industry benchmark for their volume: $5.50-6.50.   They were overpaying by $2.70-3.70 per order.   At 1,200 orders/month, that's $3,240-4,440/month.   That's $38K-53K annually going to their 3PL instead of their bank account.   We renegotiated with a new 3PL:  - $2.50 pick fee  - $0.45 per item  - $8/pallet storage  - No receiving fees over 10 pallets/month   New effective cost: $6.15 per order.   Saved $3.05 per order = $43K annually.   Same service. Better terms.   Most founders don't audit their 3PL costs until it's painful. By then, they've already lost $100K+.

Building software in-house costs logistics companies $4M annually on average. 35% of warehouses still choose it over buying proven solutions. After analyzing 100+ warehouses, here's what 3PLs need to know about building vs buying in 2025. Building requires full development teams, constant maintenance, and endless updates. A $4B logistics company we work with spent $10M on their custom OMS. Modern solutions will deliver the same capabilities for one-fifth that amount over three years. Companies spend 15% of their annual budget just to keep old systems running. One warehouse executive told me last week they had an entire team dedicated to fixing their custom platform daily. That's millions in payroll solving problems that shouldn't exist. A $400M retail brand we serve eliminated manual processes and found hundreds of thousands in missing inventory after switching to Pipe17. Their implementation took six weeks. An enterprise 3PL client cut tech costs by 70% after replacing their custom system. More importantly, they onboarded new customers in days instead of months. Their sales team now closes deals faster because they can say yes to any integration request. Getting modern software running in your warehouse isn't rocket science. We sit down, understand how you operate, connect everything you already use, and get your team comfortable with the new tools. No army of developers needed. Most of our warehouse partners are up and running in six weeks, handling orders while their competitors are still writing code. 87% of logistics companies are spending more on technology this year. They’ve figured that very dollar and hour spent building software from scratch is a dollar and hour taken away from running an excellent operation. The market demands speed and flexibility. Modern commerce needs warehouses that adapt fast. That happens through proven technology, not custom development that takes years to match basic market capabilities. Your customers don't care about your amazing homegrown software. They care about getting their products to the right place, on time, every time. Focus on that. Let technology partners handle the rest.

Margins in e-commerce are under pressure and logistics costs are often the problem 📦 💸 . Yet, most cost-cutting attempts end up hurting customer experience 😧. From what I’ve seen working with dozens of e-commerce brands in the last few months and years, the solution isn’t radical change — it’s a series of small, actionable tweaks that compound into big savings 💰 . Here are 6 levers you can use to reduce logistics costs without sacrificing speed or CX: 1️⃣ Pick the right shipping options Optimize product & packaging for efficient, trackable services (e.g. Warenpost/Kleinpaket in DE, lightweight international via Asendia & co). Make it Express-friendly (volumetric weight!) when speed matters. → Lower costs, better delivery performance. 2️⃣ Packaging that works for ops Best case: products come pre-packed from production. Otherwise, use branded, fast-closing boxes tailored to your category. That speeds up pick/pack, looks great at unboxing, and reduces fiddly in-box customization. 3️⃣ Inserts that drive LTV Add a simple flyer or a mini tester to promote new lines. Tiny cost, outsized impact on repeat purchase and retention. 4️⃣ Smart bundles > slow movers Bundle to lift AOV and nudge customers toward your core assortment — while quietly phasing out slow movers. 5️⃣ Checkout that educates Offer a free, slower option and a paid, faster one. Show customers how slower shipping is often more sustainable (road vs air). You’ll meet different expectations without overpaying for speed. 6️⃣ Subscriptions smooth the peaks Predictable volumes = less firefighting, smoother SLAs, and fewer expensive rush ops. None of this is rocket science — but together it transforms speed, cost, and customer experience. And yes, the right 3PL can standardize these patterns across markets, carriers, and SLAs so you don’t have to. It’s how we approach it at byrd: standardization where it helps, flexibility where it counts. 👉 What’s one logistics tweak that made the biggest difference for your store?

Strategic Fulfillment Recommendations • Hybrid Approach: Use FBA for small, fast-moving accessories and SFP/FBM for the heavy core products. This minimizes storage fees while maintaining Prime visibility across the catalog. • Split Inventory: For SFP, distributing inventory across multiple warehouses (e.g., 4 locations nationwide) allows for ground shipping to reach customers within 1-2 days, avoiding expensive air shipping for heavy packages. • 3PL Partnership: Specialized 3PLs are often better equipped to handle "ugly freight" (big, heavy, bulky) than Amazon's highly automated FBA centers, providing better packing protection and lower storage rates. Analogy: Selling standard items on Amazon is like commuting in a sedan; you can easily park in any standard garage (Amazon FBA) and zip around efficiently. Selling oversized items is like driving a semi-truck. You cannot park it in a standard garage (it's too expensive, and they don't want you there), and you can't take every side street. You have to plan your route (logistics) carefully, pay higher tolls (fees), and use specialized service centers (SFP/3PLs), but because driving the truck is so difficult, there is far less traffic (competition) on the road.

“I got 90% off base shipping rates. I know a guy, I can connect you.” RUN. 🚩 When merchants ask for advice on how to optimize costs, there is always someone who “knows a guy” or someone who claims to be an amazing negotiator who can grind down your carrier. If you hear that, you should run. This isn’t exhaustive, but here are the real ways to save on shipping costs: 1) Is your inventory in the right place? Understanding where your demand comes from will dictate where to locate your inventory.  Placing your inventory in the right place drives down the distance that a package travels, and therefore drives down your cost.  If you aren’t doing a network analysis before you start, you are already off on the wrong foot. 2) Can you leverage scale? One reason 3PL’s exist is that they are points of aggregation. Labor can be shared across multiple accounts for order processing, and a carrier can pick up packages from multiple brands at one location, reducing the total cost. 3) Can you utilize multiple carriers? Different carriers focus on different weight bands and locales.  There are great carriers for lightweight packages and better ones for heavier products.  Regional carriers might serve one region really well, but not be nationally focused. 4) Do you have the technology in place to realize these gains? It’s a non-negotiable to have a system that can dynamically route orders to the correct fulfillment location.  Ask if your provider uses "rateshopping." This should not be hardcoded based on zip code. It should be dynamic based on your inventory levels and the location of the buyer.  Second, if you are utilizing multiple carriers, you want to ensure you have software that can shop for rates in real-time, looking at packages, destinations, and rates from the carrier. 5) Can you optimize your packaging materials? It is expensive to ship air.  Making sure you have the right boxes and are creating denser packages drives better returns. If someone’s “advice” for better rates is to talk to “their guy,” they are full of it. Run. There are concrete ways to optimize costs.   It takes great software and a plan to make it happen. There are also so many talented consultants who can help you with this (a few come to mind below). Nate Skiver, Kathleen Sullivan Garman , Robert Clemons, Timur Eligulashvili, John McClymont, Aaron Alpeter

"How do I get the best rates on parcel delivery?" ^We get this question a lot, esp from the younger, growing brands in our pipeline. My 2c > depends on which stage you're in. 1️⃣ <$1m/yr GMV (@ $100/order: ~10k orders/yr, ~40 orders/weekday): >> Operate your own fulfillment. At this stage, your biggest challenge is finding the large audience that will buy and driving retention from the folks that have already purchased. No better way to accomplish both than to touch every order before your customers do. >> get shipping rates from platforms like ShipStation, Shippo, or Shopify. All of these platforms give strong discounts from the big carriers and have wide integration libraries. Each allows you to easily connect to your shopping cart + other store apps. The rates are good, not great -- but good is fine. >> [a little secret] all these platforms have the same discounted rates. The Big 3 Carriers (UPS, USPS, FedEx) have standard discount programs. What's not standard is the rev share that each platform makes on the back-end off each parcel 🤐 2️⃣ Between $1m - $5m/yr GMV (up to 50k orders/yr, 200/weekday): >> consider a 3PL (+ using the 3PL's in-house shipping rates) >> Core q: is the pick/pack process drowning me/my team? If "yes", and throwing labor in wouldn't solve, then move towards a 3PL. *Remember* the longer you can keep fulfillment in-house, the more you'll learn, better inventory control, faster resolutions on customer issues. >> Use an expert like Matthew Hertz at Third Person, Joe Spisak @ Fulfill (Fulfill.com) | 3PL Finder, or Scott Glassman. They live/breathe 3PL <> brand matching, will secure a better 3PL than you can solo. >> if you go with a 3PL, I recommend going with the 3PL's shipping rates. They're likely to have better rates, even after they add a mark-up. This is good for both parties -- give you better last mile rates, and gives the 3PL a rev source that's not you paying more for pick/pack or storage. It's fair. 3️⃣ >$5m/yr GMV, esp > $10m/yr GMV >> You could go direct to the carriers on shipping rates. Begin negotiations to size your discounts -- but acknowledge that this is a project and plan accordingly. >> I recommend using experts in the small parcel negotiating space to unlock the max discounts -- folks like Nate Skiver, Timur Eligulashvili, Nicholas F., Aaron Dones, Deyman Doolittle. >> If the carriers offer strong rates on your volume >> if still self-fulfilling, begin using your bespoke rates + reap the savings right away. If you're using a 3PL, start conversations with the 3PL on either using your rates or staying with their rate (but w a deeper discount on each parcel for you). Stay flexible with your 3PL, if they're legit they'll play ball. This is bare bones advice. There are many other items to consider -- your assortment, balance sheet, appetite for Ops + Cost headaches. Jump in the comments w questions or your advice! #shippersfirst #volumefollowsvalue

As we approach the end of the year many companies will be looking ahead to 2026 with one thing in mind - cutting costs. Here are 10 questions every logistics manager should be asking about their 3PL partners to drive smarter savings without compromising service: ① Are we getting the best value from our 3PL contracts? Benchmark your current rates against the market. Renegotiate annually, use performance-based pricing and make sure SLAs link cost to measurable outcomes such as on-time delivery. ② Can we consolidate 3PL providers to reduce complexity and cost? Audit how many providers you use. Consolidation can reduce admin time, unlock better volume discounts and simplify communication. ③ Are 3PLs optimising routes and loads properly? Request route optimisation data. Check load utilisation percentages. Encourage shared transport models where multiple clients’ goods are combined. ④ Are we paying for services we don’t need? Review invoices for premium handling, expedited delivery or unnecessary storage add-ons. Removing these can deliver instant savings. ⑤ How can we reduce warehousing costs? Negotiate flexible storage terms, use cross-docking to save time and consider multi-client warehouses to share overheads. ⑥ What KPIs should we track to hold 3PLs accountable? Monitor cost per shipment, on-time delivery, damage claims and warehouse utilisation. You can also use dashboards to compare performance and address underperformance quickly. ⑦ Can better collaboration lower our costs? Share demand forecasts so 3PLs can plan capacity. Work together on packaging to reduce handling. Explore joint sustainability initiatives that cut fuel and energy use. ⑧ How do we stay on top of hidden costs? Scrutinise surcharges such as fuel and non-stackable fees. Negotiate caps or clearer reporting. Add clauses that prevent surprise charges. ⑨ Can technology strengthen our 3PL relationships? Integrate systems via EDI or API. Use TMS and WMS platforms that link directly with 3PLs to reduce manual errors and improve visibility. ⑩ What’s the plan if a 3PL fails to deliver expected savings? Stay resilient - keep a shortlist of alternative suppliers. Split critical lanes to reduce dependency. Build internal safety stock where necessary. Any other points you can think of? Let me know below 👇 #logistics #logisticsmanagement #shipping #3pl

If you're in search of a 3PL, you're going to want to read this: A brand once sent me a 3PL quote and said, “Looks solid. $1.50 pick and pack. Way better than the $2 quote we got elsewhere.” I asked, “Did you check the additional fees section?” Here’s what we found: Additional $2.00 per order for handling fees Additional $0.50 per order for labeling fees So while 3PL A advertised $1.50, the actual cost for a simple one-item order was closer to $4.00. Meanwhile, 3PL B quoted $2.00, and actually meant it. When people talk about "hidden fees" in this industry, this is exactly what they are referring to. Instead of presenting the full cost up front, some 3PLs show only a portion of it and bury the rest in fine print. Another common example is shipping quotes. Some providers will exclude fuel, residential, or delivery surcharges, making their rates look lower. Those missing dollars are often enough to sway a brand's decision in the wrong direction. So, how do you protect yourself? In your RFQ, include your last 100 orders and ask each 3PL to provide two things: 1. The total fulfillment cost [including order processing, pick and pack, labeling, packaging materials, and anything else that would appear on the invoice] 2. The total shipping cost [including all surcharges, such as fuel and delivery area fees] If you do this, you are no longer comparing pricing sheets. You are comparing sample invoices.

Everyone thinks 3PL is more expensive for small brands. The math actually proves the opposite: Warehouse costs: → $4,000/month minimum lease → $2,500/month for staff → $1,200/month for equipment → $800/month for software That's $8,500 before you ship a single order. With a 3PL, you're only paying for what you use. Storing 500 units? $0.00 Processing 300 orders? $4/order You'll spend about $1,200/month total. The reality is clear: Until you're shipping 2,000+ orders monthly, running your own warehouse bleeds money. But nobody talks about this because... Most warehouse solutions are built for huge brands. Small brands are actually the ones who save the most with 3PL. The math doesn't lie.