A multi-site 3PL was spending over $7M annually on shipping. 

Their operations were strong, spanning three well-run facilities across the US, but their parcel contract was holding them back.

They thought they’d negotiated well. But after a fresh audit, it became clear they were leaving over $2.5M on the table. They had strong base discounts - but missed out on key levers like surcharges, minimums, and packaging optimization.

That’s when they brought in Gilder Group.

Founder Chris Mehlfelder helped the client audit their current parcel contract, model alternative scenarios, and negotiate a new agreement with their primary carrier. 

Within six weeks, they signed a new deal - and brought parcel costs down by 33%.

I spoke with Chris to understand exactly how the project unfolded.

Here are the top lessons from that conversation - and how you can apply them if you’re evaluating your own shipping contract.

1. You might not even know you have a problem

The 3PL was profitable. They were getting invoices every week and costs weren’t spiking. To them, things looked fine.

But once Gilder Group reviewed the contract, they found big opportunities hidden in the fine print. Surcharges, residential delivery fees, and minimums were all being charged at full price—with no discounts.

“They had no idea that they had a problem. They were happy to continue to pay their bills... They didn’t have any clue as to how much they were actually leaving on the table.”

Action: If you haven’t reviewed your contract in the last 12–24 months, you’re likely leaving money on the table. Ask a partner to audit it - even if you think everything’s fine.

2. Don’t just negotiate rates. Focus on the hidden fees

The client had a solid headline discount. But they had no negotiated rates for things like delivery area surcharges, fuel surcharges, residential fees, or minimum charges. 

These add up fast.

In fact, residential surcharges alone were adding over $6 per order - and their average order value was around $200. That’s significant.

"Everyone negotiates the percent off. But the real money is in the stuff nobody thinks to touch."

Action: Go beyond base rates. Negotiate on minimums and surcharges—especially residential fees and fuel. These are often where the biggest savings lie.

3. Analyze your parcel data before you make a move

Most clients walk into negotiations without a specific cost-per-order target. Gilder Group flipped that. They analyzed historical billing, benchmarked discounts, and set a specific cost-per-order goal from the start.

This gave the carrier a clear picture and made each counteroffer easy to evaluate.

"You need to walk in knowing exactly what you're asking for, and what your fallback is if they say no. That’s what lets you move fast."

Action: Build your model first. Know what a ‘win’ looks like, so you’re not negotiating in the dark.

4. Negotiation doesn’t have to take forever

From kickoff to signing, this process took just six weeks. That’s rare. But it happened because Gilder packaged everything well and managed the back-and-forth quickly.

"The reps on the carrier side usually move fast. It’s the shipper side that gets stuck in analysis paralysis. Our job is to take that time out of the equation."

Action: Prepare ahead. Have a clear ask. Be responsive. You can avoid six-month delays if you drive the process actively.

5. Better rates fall straight to the bottom line

The new contract saved ~$50,000 per week. That’s $2.5M in annual savings - on shipping alone.

And the best part? It didn’t require any operational or career changes. They just renegotiated smarter.

"That's the beauty of parcel savings. It's pure margin. You choose what to do with it."

Action: If you’re spending over $5M a year on shipping, a renegotiation could unlock 20–30% in savings with the right structure and support.

6. Don’t just fight - collaborate

One of the client’s biggest surprises was how collaborative the process was. Chris helped them build a strategy that aligned with carrier goals too so the deal worked for both sides.

"You don’t always need leverage. You just need to be credible, prepared, and collaborative."

Action: Know what to push on. But also know where the carrier needs flexibility. You’ll get better outcomes when both sides feel like they’re winning.

This project is a good reminder that you don’t need a massive ops overhaul to drive major impact.

If you're running a 3PL and spending more than $3M a year on parcel shipping, your contract might be costing you more than you think.

It’s worth a second look.

Q&A with Chris Mehlfelder

If you want to go deeper, here’s the full conversation I had with Chris. It includes more detail on everything from negotiation strategy to how his team builds trust with 3PLs over time.

Table of Contents

1. Understanding the Client

   • Who was the client?

   • How do 3PLs like this typically get started?

   • Why did they consolidate shipping with one carrier?

2. Identifying the Problem

   • When did they realize they had a problem?

   • What inefficiencies did you uncover?

   • Why do many 3PLs struggle with parcel contract negotiations?

3. The Solution

   • What was your approach to auditing their shipping costs?

   • What contract terms were overlooked?

   • How did you structure the negotiation strategy?

4. Negotiation & Results

   • What were the biggest areas of savings?

   • How long did the entire process take?

   • Did they consider alternative carriers or shipping platforms?

5. Lessons & Takeaways

   • What were key surprises in this case study?

   • What common mistakes do shippers make?

   • How often should companies renegotiate their parcel contracts?

Connect with Gilder Group on LinkedIn and their website.

This conversation has been edited for length and clarity.

1. Understanding the Client

To start, can you share some context about the client you worked with in this case study?

Chris: Absolutely. The client was a multi-site 3PL that had been founded by a very successful operator from a large multinational 3PL—think companies like Geodis, Amazon, or Ryder. He had built a strong reputation in the industry, saw a market need, and left to start his own 3PL.

This 3PL had three fulfillment centers: one in the Northeast, one in the Central U.S. (North Texas), and one on the West Coast (California). They handled a high volume of e-commerce shipments, primarily for premium digitally native apparel brands—the type of brands you’d see frequently in Instagram ads.

Their average order value was between $185 and $220, so they weren’t dealing with low-margin products. The fulfillment centers were well-run, efficient, and clean, but they were spending well over $150,000 per week on parcel shipping with a single national carrier. That’s about $7 million per year.

Was all their parcel spend with just one carrier?

Chris: Yes, they had consolidated everything with a single major carrier. The CEO believed that concentrating their spend with one carrier would help maximize discounts and incentives. That’s a common strategy, but it also has trade-offs, which we’ll get into later.

How do 3PLs like this typically come into existence?

Chris: In my experience, there are two main paths:

1. The industry veteran route – This was the case for our client. Someone who has spent years running large operations at a multinational 3PL sees an opportunity, leaves, and starts their own 3PL. They leverage their expertise, hire the right salespeople, and attract premium clients. However, these founders often lack experience negotiating shipping contracts because, at their previous employer, a procurement team handled that.

2. The frustrated brand owner route – This is when a brand owner is unhappy with their 3PL experience and decides to launch their own logistics operation. While they understand their brand's supply chain needs, they often rely on the 3PL’s existing carrier rates and don’t have direct experience negotiating contracts themselves.

Regardless of the path, the problem remains the same—most of these founders only negotiate parcel contracts every two or three years. Meanwhile, the parcel market is constantly evolving, with new surcharges, changes in service levels, and pricing structures that they’re not tracking.

2. Identifying the Problem

At what point did they realize they had a problem and reach out to you?

Chris: They didn’t. That’s the interesting part—they had no idea they had a problem.

They were profitable and thought they had negotiated aggressive terms in their shipping contract. They were looking at their carrier invoices, and as long as the costs were stable week to week, they assumed everything was fine.

They only got introduced to us by chance. A marketing analytics firm they worked with suggested they speak with us. Initially, the CEO dismissed the idea, saying, "We know what we’re doing in supply chain. We don’t need help." But the analytics firm pushed back, pointing out that we work on a performance-based model—if we didn’t find savings, they wouldn’t pay us.

That got them to agree to a meeting.

Once you reviewed their data, what stood out?

Chris: At first glance, their contract terms looked competitive—on paper, it seemed like they had negotiated well. But when we dug into the actual shipping data and invoices, we found substantial hidden inefficiencies.

They simply didn’t know how much money they were leaving on the table. The issue wasn’t just about discounts on base rates—it was about surcharges, accessorial fees, and contract structure, which most companies overlook.

3. The Solution

Once you identified the opportunities in their parcel contract, what happened next? How did you approach the process?

Chris: Our process starts with a discovery call, similar to most professional sales organizations. We first want to understand:

• How their business operates today.

• What changes they expect in the next 6-18 months—whether that’s product changes, new geographic markets, or shifting customer demand.

For example, I once worked with a company that started selling small wine accessories like wine openers and stemware, but later expanded into wine fridges. That’s a huge shift in parcel characteristics—from small, light shipments to heavy, oversized packages. Their existing contract was completely misaligned with their new shipping profile.

After the discovery call, we ask clients to provide:

1. Current carrier agreements – We need to see what they’ve already negotiated.

2. Billing data – To audit whether they’re actually getting the discounts and services they believe they are.

Then we assess three things:

1. Are they getting what they paid for?

2. Are they getting what they think they’re getting?

3. Is their contract appropriate for their business size and shipping profile?

What kind of technology do you use for this analysis?

Chris: We’ve built proprietary analysis tools, but nothing that’s a huge secret—we’ve just made it easier to pinpoint cost drivers quickly. The key questions we ask are:

• Are they shipping from the right location?

• Are they using the right services?

• Are they using the right packaging?

• Have they negotiated an appropriate contract for their business?

Many clients assume their origin-destination pair (where they ship from) is fixed, but that’s not always the case. With over 10,000 3PLs in the U.S., they may not be shipping from the most optimal location. Sometimes staying with a higher-cost 3PL makes sense for operational reasons, but most of the time, companies don’t even realize they’re shipping from a suboptimal location.

4. Negotiations & Results

So now that you had all this data and presented the opportunities to the client, what happened next?

Chris: In this particular case, the CEO had aggressively negotiated percentage-based discounts on shipping services—but ignored surcharges.

Here’s what they had no discounts on:

• Additional handling fees

• Large package surcharges

• Dimensional weight factors

• Delivery area surcharges

But the biggest savings opportunity was on their residential surcharge.

Since this was an e-commerce-focused 3PL, nearly every package was shipped to a home. Yet, their contract had zero discounts on residential surcharges.

For context, in 2025, UPS Ground has a minimum charge of $11.32 for a Zone 2 one-pound package, while the residential surcharge alone is $6.20—that’s over 50% of the shipping cost!

By negotiating residential surcharge reductions, we unlocked significant savings.

Another big gap? Minimum charges.

Since their average package weight was under 5 lbs, their negotiated 52% discount on ground residential shipping was mostly useless. They were hitting minimum charges on almost every shipment, effectively getting only a 30-35% actual discount.

We renegotiated these areas and unlocked savings they hadn’t even realized were possible.

How often should a 3PL or e-commerce brand renegotiate their carrier contracts?

Chris: It depends on scale and business complexity.

• Smaller 3PLs & mid-sized shippers: Typically renegotiate every 1-3 years.

• Larger enterprises: They negotiate different parts of their shipping volume separately—returns might have a separate contract from outbound shipments, for example.

• Massive billion-dollar shippers: Constantly negotiating something. It’s too large and complex to renegotiate everything at once.

Even though many contracts last three years (156 weeks), that’s just when the incentives expire—it’s not a hard contract end date. Many companies assume they’re locked in when they’re not.

Did you recommend introducing alternative carriers to this 3PL?

Chris: No, in this case, the client didn’t want to add additional carriers. They weren’t a sophisticated shipper yet and were concerned about operational complexity.

That said, for larger clients, we often introduce regional and specialty carriers to continue driving down costs when their discounts with major carriers start to plateau.

What about using shipping aggregator platforms? Would you recommend those for 3PLs?

Chris: It depends on the business model and priorities.

For this 3PL, premium customer experience mattered more than cost savings. They wanted reliable service from a major carrier rather than optimizing purely for cost.

Aggregators can be great for low-margin, high-volume businesses that just want the cheapest rate. But if you’re focused on delivering a premium experience, those services often introduce trade-offs in reliability and speed.

It’s a strategic decision—some 3PLs compete on cost and efficiency, while others compete on service and brand experience.

What was the timeline for this entire process? From the client reaching out to you, to completing the audit, negotiating, and finalizing the new contract?

Chris: Great question. A lot of people assume that carrier negotiations take forever—and sometimes they do. But in this case, the entire process was actually incredibly fast—just six weeks from start to finish.

• Week 1: Initial discovery call + requested billing data.

• Week 2: We completed our audit, identified savings opportunities, and presented a negotiating strategy to the client.

• Weeks 3-5: Negotiation rounds with the carrier. We were able to move quickly because we had a clear, step-by-step negotiation plan from the start.

• Week 6: Contract finalized and implemented.

When clients negotiate on their own, they often slow themselves down—not the carrier. Many spend days or weeks internally debating counteroffers, analyzing terms, or just getting approvals. Since we’ve sat on both sides of these negotiations, we knew exactly what to ask for, how to structure it, and how to ensure a fast turnaround.

So in terms of results, what was the actual impact of these contract changes?

Chris: The results were massive.

Before working with us, the client was spending $150,000 per week on parcel shipping. After renegotiating, that number dropped to $100,000 per week—a savings of $50,000 per week.

That’s an annual savings of $2.6 million.

And the best part? These savings go straight to the bottom line. There’s no additional investment needed—it’s just money back in their business.

Where did those savings actually come from?

Chris: The savings were spread across several key areas:

• Minimum charge reductions (~60%)

• Residential surcharge discounts (huge for an e-commerce-heavy business)

• Improved incentives on 2-day and next-day air shipments

• Stronger SurePost discounts for lower-cost ground shipping

• Better fuel surcharge terms

• Optimized ground shipping incentives

We also negotiated some international shipping improvements, though most of the impact was on domestic parcel spend.

That’s a massive cost reduction. Did the client reinvest those savings?

Chris: Yes! Instead of just pocketing the savings, the client passed those savings down to their e-commerce brands, reducing their fulfillment costs.

This allowed their customers to:

• Lower their shipping costs.

• Reduce their average cart value threshold for free shipping.

• Increase conversion rates (more customers checking out).

It was a win-win-win—for the 3PL, their clients, and even the carrier (who ultimately saw more volume as a result).

5. Lessons & Takeaways

Looking back, were there any surprises or key lessons learned from this engagement?

Chris: A couple of things stood out:

1. The carrier rep moved incredibly fast – We often see delays when clients negotiate on their own, but in this case, the carrier was super responsive.

2. The client was shocked at how much they had overlooked – They thought they had an aggressive contract, but they never considered minimum charges, surcharges, or fuel costs.

3. The power of collaboration vs. confrontation – Many shippers think of negotiations as a battle. But when you approach it as a partnership, you often unlock better terms.

The biggest mistake most shippers make? They focus ONLY on their percentage discounts. But the real money is in the fine print—surcharges, dimensional weight factors, minimum charges, and zone optimization.

That makes sense. There’s a massive knowledge gap—carriers are experts at this, but most shippers are only negotiating once every few years.

Chris: Exactly. That’s why carriers capture such high premiums—because there’s an information asymmetry. They negotiate contracts every day. Most shippers do it once every three years.

That’s why we launched Gilder Group—to level the playing field. We help brands and 3PLs turn their parcel data into clear, actionable insights and negotiate with confidence.

This was fantastic, Chris. Where can people find you if they want to learn more?

Chris: Thanks, Gowtham! The best places to reach us:

• Website: gildergroup.co

• LinkedIn: Gilder Group

• Twitter/X & Instagram: @gildergroup

We offer complimentary initial consultations, so if you’re an e-commerce brand or 3PL looking to optimize your parcel spend, we’re happy to chat!