Where money leaks in 3PL invoices

Most DTC brands check the total on their 3PL invoice and nothing else. A fulfilment bill that creeps up 15% over a year rarely does it through one big change. It does it through a dozen small leaks that nobody reads.

These are the ones we see most often, roughly in order of how much they cost.

1. Postage markups

Postage is usually the biggest number on the invoice, bigger than all fulfilment fees combined. Many 3PLs resell their carrier rates with a markup, or bill from their own rate card.

Find it: pull twenty recent orders and compare the postage billed with the carrier's rate for the same weight, dimensions, service and zone. Ask for the markup in writing. If the "discounted" rate is close to retail, the discount is mostly theirs.

2. Dimensional weight from oversized boxes

Carriers charge on the greater of actual and dimensional weight. A box an inch or two too large on each side can double what you pay to ship a light product.

Find it: compare billed weight with actual weight per order. If billed weight is consistently higher, check which box sizes are being used for your top SKUs.

3. Storage measured at the worst moment

Storage billed from a single monthly snapshot, taken just after a container lands, charges you for peak stock all month. Half-empty pallets billed as full positions add more.

Find it: ask for the storage report behind the line. Compare positions billed against positions really used, and ask for daily-average measurement and consolidation of partial pallets.

4. Surcharges that never went away

Fuel, residential, delivery area, additional handling, address correction and peak surcharges. Carriers set most of them, and 3PLs sometimes add a margin.

Find it: track surcharges as a percentage of postage, month by month. A jump means a packaging change pushed parcels over a threshold, a peak surcharge that should have ended, or a checkout that isn't validating addresses.

5. Minimums you never reach

If your activity falls short of the monthly minimum, you pay the difference. If that happens most months, you're paying for capacity you don't use.

Find it: check how often the minimum top-up appears. Renegotiate it, or consolidate more volume with that 3PL.

6. Pick fees that don't fit your orders

Pick and pack is usually a per-order fee plus a per-additional-item fee. The right balance depends on your average units per order.

Find it: run last month's orders through alternative fee structures. If your customers buy several items at a time, a lower per-item fee can save more than a lower per-order fee.

7. Packaging at a markup

Boxes, mailers, void fill and inserts are often charged per order, sometimes with a markup.

Find it: compare what you pay per order for materials against the cost of buying them yourself. For high-volume SKUs, supplying your own packaging can be much cheaper.

8. Receiving charged the expensive way

Per-unit receiving on clean, single-SKU cartons, or "non-compliant" fees when shipments arrive mixed or unlabelled.

Find it: check the receiving basis. Clean cartons should be on a per-carton or per-pallet rate. Repeated non-compliance fees mean your supplier's packing instructions need fixing.

9. Returns processed when they shouldn't be

Low-value returns processed back into stock can cost more in fees than the item is worth.

Find it: compare return fees against the value of returned items by SKU. For some, a returnless refund or donation is cheaper.

10. Billing errors and unapproved work

Rates that don't match the contract, duplicate charges, and hourly "special projects" nobody approved.

Find it: check a few lines each month against the contract rate card, and require written approval for any hourly work.

How to run the check

Put three months of invoices side by side. Calculate cost per order for each category and the trend. Check every rate against the contract, then compare your rates with what brands of your size typically pay. That's the basis for a renegotiation, and most brands find something on the first pass.