The short answer
A 3PL, short for third-party logistics provider, is a company that keeps your products in its warehouse and picks, packs and ships each order for you. Of the 11 3PLs serving Canada that we track, none publishes a full rate card and 1 publishes a pick and pack fee. In Canada, the price is almost always in the quote.
What a 3PL does
The Association for Supply Chain Management describes the usual setup in six steps (ASCM). In plain terms:
- Your products are made.
- You ship them to the 3PL’s warehouse.
- The 3PL counts them in and puts them on shelves.
- Your store sends each new order to the 3PL automatically.
- The 3PL picks the items and packs the box.
- A carrier delivers it to your customer.
Many also take in returns and assemble bundles or kits.
What a 3PL bills you for
A 3PL invoice is a stack of small fees. Here is each one, and how many 3PLs serving Canada show what they charge for it:
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Pick and pack
A fee for each order: taking your items off the shelf, packing them and labelling the box.
1 of 11 3PLs we track publish an amount. See published rates
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Extra items
A smaller fee for each item after the first in the same order. Some 3PLs charge it on every item.
1 of 11 3PLs we track publish an amount. See published rates
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Storage
Monthly rent for the space your stock takes up, by bin, shelf, pallet or volume.
2 of 11 3PLs we track publish an amount. Compare your quotes
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Receiving
Unloading and counting each delivery of your stock, by the hour, carton, pallet or unit.
2 of 11 3PLs we track publish an amount. Compare your quotes
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Monthly minimum or account fee
A floor you pay even in a slow month: a minimum bill, an account fee or a tech fee.
2 of 11 3PLs we track publish an amount. Compare your quotes
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Setup or onboarding
A one-time fee to open the account and set up your products.
1 of 11 3PLs we track publish an amount. Compare your quotes
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Packaging
Boxes, mailers and fill. Often included in pick and pack, sometimes billed per box.
1 of 11 3PLs we track publish an amount. See published rates
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Returns
Opening, checking and restocking what customers send back.
1 of 11 3PLs we track publish an amount. Compare your quotes
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Software and store connection
Connecting your store to the 3PL's system. Several include it free.
4 of 11 3PLs we track publish an amount. Compare your quotes
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Kitting
Assembling bundles or gift sets before they ship.
1 of 11 3PLs we track publish an amount. Compare your quotes
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Long-term storage
A higher rate for stock that sits too long.
0 of 11 3PLs we track publish an amount (all by quote). Compare your quotes
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Special projects
Hourly labour for one-off jobs, such as relabelling or moving your stock out.
1 of 11 3PLs we track publish an amount. Compare your quotes
Counts read from each 3PL's own pricing pages, the same data as our 3PL comparison. Amazon's and Walmart's own fulfilment services are left out: they bill per unit with delivery included. Sample quotes are not counted as a published rate, and an amount counts even when its currency is US dollars or not stated.
Postage is either passed through at the 3PL’s carrier rates or included in one price per order. Ask which, and which carriers it uses (Canada Post, Purolator, UPS, FedEx).
Because the amounts are in quotes, the useful move is to ask every 3PL for the same list of fees. Our fulfilment quote calculator lines the quotes up per month.
Prices in Canadian or US dollars
Some 3PLs serving Canada publish prices without naming a currency: AMZ Prep for all of its prices, LVK for its monthly tech fee. Before you compare two quotes, check that both are in Canadian dollars and whether sales tax is on top.
3PL vs 4PL
A 3PL runs the warehouse work. A 4PL, a fourth-party logistics provider, manages the supply chain itself. Covenant Logistics, which sells logistics services, puts it this way: 4PLs “manage everything, from overseeing procurement procedures to coordinating with 3PLs” (Covenant Logistics).
So a 4PL often hires 3PLs on your behalf. If you sell online and need someone to store stock and ship orders, a 3PL is what you are shopping for.
3PL vs Amazon’s and Walmart’s fulfilment
Amazon.ca and Walmart Canada run their own fulfilment services. They work like a 3PL with one big difference: the price per unit includes delivery, so you don’t buy labels. Fulfilment by Amazon and Walmart Fulfillment Services ship orders from their own marketplaces; they are the only full price lists in Canadian dollars in our Canadian 3PL comparison.
Selling to US customers from Canada
A Canadian 3PL can ship your US orders across the border, or you can stock a 3PL’s US warehouse instead. Each US parcel now pays whatever duty its goods owe. Our Canadian 3PL comparison covers which 3PLs ship cross-border and which run US warehouses, and shipping to the US prices the cross-border route.
How to choose a 3PL in Canada
Start with three questions, in this order:
- Will it take your volume? Many Canadian 3PLs state a minimum order count.
- Is its warehouse near your customers? Most cluster around Toronto, with fewer in Vancouver, Calgary and Montreal.
- What will it cost at your volume? Get quotes, then compare them fee by fee.
Common questions
What does 3PL stand for?
Third-party logistics: an outside company you hire to store your stock and ship your orders. The ASCM Supply Chain Dictionary defines it as a buyer and supplier team with a third party that provides product delivery services. The same letters name the company itself.
What is the difference between a 3PL and a 4PL?
A 3PL does the physical work: it stores, packs and ships. A 4PL manages your whole supply chain for you and coordinates the 3PLs, carriers and suppliers. Covenant Logistics describes 4PLs as managing everything from procurement to coordinating with 3PLs. Most online stores only need a 3PL.
How much does a 3PL cost in Canada?
It's almost always in a quote. None of the Canadian 3PLs we checked publishes a full rate card in Canadian dollars. Ask each one for its per-order fee, storage, receiving and monthly minimum, then line the quotes up in our fulfilment quote calculator.
Can a Canadian 3PL ship to US customers?
Yes, several do, either across the border from a Canadian warehouse or from their own US warehouses. Since the US suspended duty-free entry for low-value parcels (Section 321), each cross-border parcel pays whatever US duty its goods owe, so ask any 3PL who files the US entry and what duty your products will pay.
Is DHL a 3PL?
DHL runs one: its DHL Fulfillment Network, part of DHL Supply Chain, describes its services as third-party logistics on its own site. A carrier moves your packages; a 3PL also stores your stock and packs each order.