The reporter in the video dissected the intricate pricing structures of 3PL companies versus in-house logistics, portraying the 3PL pricing as an elaborate puzzle. He explained that the core of 3PL pricing revolves around the fulfillment fee, encompassing a base fee covering the initial item and additional pick fees for subsequent items. The estimated base fee of $2.50 per order, alongside an additional charge of around 30 cents per item, reflects the complexity of pricing, often including or separately pricing packaging materials with a margin on procurement costs.
Beyond the fulfillment fee, 3PLs tack on various additional charges, including monthly pallet fees per pallet, receipt fees for unloading or receiving parcels, special project fees, handling charges, and label fees for barcoding. The underlying profit strategy for 3PL banks is labor arbitrage, where they pay employees a standard wage and charge clients at a higher rate, ensuring profitability by intricately pricing their services.
Furthermore, the 3PLs factor in shipping costs from carriers like FedEx, marking up the charges despite negotiating discounts. The lack of transparency regarding their base costs adds to the complexity, with clients benefiting from better prices than retail but still contributing to the 3PLs’ margins. Negotiating transparency on profit margins and price adjustments based on volume changes have become essential discussion points for potential clients.