Third-party logistics (3PL) companies offer various fulfillment services to businesses, including storage, picking, packing, and shipping. One significant factor that businesses need to consider when choosing a 3PL is how the company bills for their services. There are two primary billing methods that most 3PLs use: blended rate (per order rate) and line item detailed rate.
A blended rate is a single, all-inclusive fee charged for the entire fulfillment process. The fee includes all the costs associated with receiving, storing, picking, packing, and shipping orders. This billing method is typically quicker and more straightforward, making it easier for businesses to understand their total fulfillment costs. However, the drawback of a blended rate is that it can hide individual charges, making it difficult to know what exactly you are paying for.
Most 3PLs use the blended rate because it simplifies billing and provides a straightforward pricing model. The fee is usually calculated based on the number of orders processed or the total volume of products stored in the warehouse. Some companies may offer tiered pricing, which means that the per order rate decreases as the volume of orders increases.
On the other hand, a line item detailed rate provides a breakdown of individual charges associated with each step of the fulfillment process. This method allows businesses to have a better understanding of the cost of each department's contribution, including receiving, pick and pack, box cost, storage cost, and other expenses. The line item detailed rate allows businesses to see exactly what they are paying for and make more informed decisions.
At Moby Dick 3PL, we believe in providing transparent pricing to our customers. We use a line item detailed rate to ensure that businesses know exactly what they are paying for. Our pricing includes a breakdown of individual charges for each department, so you can see exactly what you're paying for. We believe in being upfront and transparent with our pricing to build trust and long-term relationships with our clients.
Choosing the right billing method for your business is crucial when selecting a 3PL. While a blended rate may be quicker and easier to understand, it can hide charges in a lump fee. In contrast, a line item detailed rate offers a more transparent pricing model, allowing businesses to understand the cost of each department's contribution. At Moby Dick 3PL, we prioritize transparency and provide a breakdown of individual charges for each department to help businesses make informed decisions.