Big 3PLs Are Raising Prices—Is It Time to Switch to a More Flexible Partner?

If your business relies on a third-party logistics (3PL) provider, you’ve likely noticed rising costs in warehousing, fulfillment, and shipping. Across the industry, 3PLs are increasing their rates due to labor shortages, higher real estate prices, growing operational expenses, increased interest rates, and investors expecting higher profit margins.

For businesses that depend on outsourced logistics, these rising costs can cut into margins and make it harder to stay competitive. While it might seem like working with a larger 3PL would offer cost stability and lower costs, that’s not always the case. In fact, partnering with a small to mid-size 3PL could be a better long-term strategy, offering potential cost savings, flexibility, and a higher level of service.

Let’s take a closer look at why 3PL prices are going up, the downsides of working with a big provider, and how a smaller 3PL can help you navigate these challenges.

Why Are 3PL Prices Increasing?

Several factors are driving up costs in the 3PL industry:

1. Labor Costs Are Rising

Warehousing and fulfillment rely heavily on labor, and in recent years, wages have risen significantly due to worker shortages and inflation. Many states have also raised minimum wages, making it more expensive for 3PLs to staff their operations.

2. Technology & Compliance Costs Are Growing

3PLs must invest in advanced warehouse management systems (WMS), automation, cybersecurity, and compliance measures to keep up with the industry’s demands. From environmental regulations to data security requirements, these upgrades are necessary but expensive.

3. Smaller Businesses Feel the Impact of 3PL Price Increases More

Large 3PL providers are built to serve high-volume, high-value clients, which means smaller businesses often feel the impact of price increases more directly. When costs rise, these companies adjust rates across the board, but smaller clients—who may not have the same volume leverage as larger accounts—are more likely to experience sudden rate hikes and lower priority on service responses.

The Downsides of Large 3PLs in a High-Cost Market

Bigger doesn’t always mean better—especially when it comes to logistics. Large 3PLs may have the resources to handle massive order volumes, but they also come with drawbacks:

1. Less Flexibility

Large 3PLs, like massive container ships, follow set routes and processes that can be difficult to pivot and meet unique client needs. In contrast, a small to mid-size 3PL is more like a speedboat—agile and responsive, able to adjust course quickly to accommodate special requests, service level changes, or pricing discussions.

2. Volume-Based Pricing Favors Larger Clients

Many big 3PLs prioritize high-volume clients, offering them better rates and faster service while smaller businesses end up paying more. If your business doesn’t ship at high volumes, you may struggle to get competitive pricing or the attention you deserve.

3. Customer Service Can Be Slow

With hundreds or even thousands of clients, large 3PLs often rely on call centers for customer service, meaning support teams may not be in the same building as the inventory. If you run into an issue, you might have to go through multiple layers of support before reaching someone who can actually help. In contrast, small to mid-size 3PLs typically have customer service reps within 100 feet of your products, providing faster, more personalized assistance and real-time problem-solving.

4. Limited Room for Growth

As your business expands, growing pains are inevitable.  Large 3PLs may not be as willing to accommodate changing needs. A smaller 3PL, on the other hand, may be more likely to grow with your business and adapt to your needs over time.

The Benefits of Choosing a Small to Mid-Size 3PL

Switching to a smaller 3PL can provide the same core services as a large provider—but with added advantages that can benefit your business in the long run.

1. More Personalized Service

With a smaller 3PL, you’re not just a number. You get direct communication with the team handling your fulfillment, ensuring responsiveness and a more tailored approach to your business needs.

2. Greater Pricing Flexibility

Smaller 3PLs are often more open to negotiation and can create customized pricing structures based on your specific needs. Instead of one-size-fits-all pricing, you can often work out a solution that makes sense for your budget. At Fast Fulfillment, transparency is a priority—there are no hidden fees, so you always know what your bill will be. No surprises, just clear and predictable pricing.

3. Stronger Partnerships for Long-Term Growth

A small to mid-size 3PL values long-term client relationships. Rather than prioritizing high-volume customers, they get to know you and your business as a partner, meeting regularly and providing clients access to key decision makers. A small 3PL’s success is tied to your business’ success. 

4. Operational Agility & Faster Problem Solving

Need to make a quick adjustment to your fulfillment process? Smaller 3PLs are more adaptable and can implement changes faster than a large provider with rigid processes. Whether it’s a last-minute order change or a new shipping strategy, they can pivot quickly.

Final Thoughts: A Smarter 3PL Strategy for 2025

The rising costs of logistics are affecting businesses of all sizes, but how you respond to these changes can make all the difference. Instead of sticking it out with a large 3PL, consider the long-term advantages of a small to mid-size provider.

By choosing a smaller 3PL, you gain flexibility, better pricing options, and a partner, not just a vendor. If you’ve been experiencing price hikes, slow customer service, or inflexible processes with your current 3PL, now is the time to explore other options.

Looking for a 3PL partner that offers cost-effective, personalized service? Contact us today to learn how we can help your business thrive in 2025 and beyond.