What does an additional pick mean on your rate card? It could mean another item in an order or another SKU line. Unless you explain which one applies, your client may calculate a different amount from your billing team. 3PL activity-based billing charges clients for the warehouse services they use. To make it work, both sides need to agree on what is being counted, what the rate covers, and when the charge applies.
This article uses a sample rate card to show how those decisions affect a monthly invoice. The rates and volumes are made up for the example. They are not Fulfillor prices or market averages.
How 3PL Activity-Based Billing Works
A warehouse may charge for cartons received, items picked, kits assembled, or returned items inspected. For each service, the basic calculation is:
Quantity of billable work × agreed rate = charge
Suppose you receive 120 cartons at $1.50 each. The receiving charge is $180. But you still need to know what that $1.50 includes. If counting and putaway are included, you should not add separate fees for the same work.
Storage and account fees may appear alongside these charges. Not every movement in the warehouse needs its own invoice line. The client agreement decides which services are billed separately.
Agree on the Unit Before the Price
Consider an order with three units of one SKU and two of another. That is five units across two SKU lines.
With a $2 base fee and a $0.40 additional charge, the bill could be:
- $3.60 if the base covers the first unit: $2 + four additional units at $0.40.
- $2.40 if it covers the first SKU line: $2 + one additional line at $0.40.
Neither amount tells you whether the bill is right until you read the charging rule. “Additional pick: $0.40” is not enough detail.
Write down the unit and when the charge applies. Receiving might be billed after the carton count is confirmed. Return inspection might be billed after the inspection is complete, rather than when the parcel arrives.
For a broader explanation of fulfillment fees, see our 3PL pick and pack pricing guide.
A Sample 3PL Rate Card
Put the client name, warehouse, currency, billing cycle, and effective dates at the top of the rate card. Keep a reference to the client's approval so the billing team knows which version to use.
Here is an example for a fictional client, Harbor Lane Goods. All amounts are in US dollars.
| Service | Sample rate | What the rate covers |
|---|---|---|
| Receiving | $1.50 per carton | Confirmed cartons received; includes standard counting and putaway |
| Order handling | $2 per order | Charged once when the order first ships; includes the first item and standard packing labor |
| Additional items | $0.40 per item | Each fulfilled item after the first, counted across the order's shipments |
| Kit assembly | $0.80 per kit | Completed and accepted kits; includes handling the components and assembling them; client supplies materials |
| Return inspection | $3 per item | Completed inspection and routine restocking; disposal needs separate approval |
| Monthly service minimum | $2,500 | The minimum amount for the five services above, not an extra account fee |
In this example, storage, shipping, packaging materials, and taxes are separate from these service charges.
A finished kit counts as one item when shipped. Its components are not counted again as individual outbound items. The assembly fee already covers handling them during kit preparation.
What the Monthly Invoice Would Look Like
During the month, the warehouse receives 120 cartons for Harbor Lane Goods. It ships 800 orders containing 1,900 items, assembles 250 kits, and inspects 30 returned items.
For this calculation, all orders ship completely within the month. There are no canceled orders or split shipments, and every order contains at least one item. Finished kits count as single items in the shipping total.
The base order fee includes one item per order. That leaves:
1,900 items − 800 included items = 1,100 additional items
| Service | Calculation | Charge |
|---|---|---|
| Receiving | 120 × $1.50 | $180 |
| Order handling | 800 × $2 | $1,600 |
| Additional items | 1,100 × $0.40 | $440 |
| Kit assembly | 250 × $0.80 | $200 |
| Return inspection | 30 × $3 | $90 |
| Service total | $2,510 |
For accurate 3PL activity-based billing, check the included and additional items on each order before adding up the totals. The subtraction above works because the example has no partially shipped orders or items billed in another period.
How the Monthly Minimum Applies
The service total is $2,510, which is above the $2,500 minimum. No extra amount is needed.
If those services came to $2,100 in a quieter month, the warehouse would add $400 to reach the minimum. It would not add the full $2,500 on top of $2,100.
The rate card should also say which services count toward the minimum. Do not assume shipping or storage is included unless the agreement says so.
A Simple 3PL Billing SOP
A billing SOP gives the warehouse and finance teams a routine to follow. It should explain who records the work, who checks problems, and who approves the invoice.
| Step | Who handles it | What to do |
|---|---|---|
| Confirm the rates | Account manager and finance | Check the approved rates, billing units, included work, and start dates |
| Record the work | Warehouse team | Save the client, service, quantity, date, and order or task reference |
| Check problems | Operations supervisor | Investigate missing quantities, repeated records, and work without approval |
| Prepare the charges | Billing team | Apply the right rates and check the monthly minimum |
| Review the invoice | Finance reviewer | Match charges to records and approve any adjustments before sending |
Smaller teams may share these jobs. Where possible, have someone other than the preparer review the invoice.
Record extra work, such as relabeling or repacking, when it is completed. Include any approval needed under the agreement. If the task is charged by the hour, agree on how time is recorded and rounded.
When a quantity is unclear, assign someone to check it before billing. Keep the reason and approval for any adjustment. If a correction is needed after the invoice is sent, retain the original reference when issuing the correction or credit.
The 3PL client onboarding checklist covers the setup checks before a new account goes live.
Check Split Shipments and Cancellations
Harbor Lane Goods pays one base fee per order. Sending an order in two parcels would therefore not create another base fee. Additional items still need to be counted across both shipments without billing the same quantity twice.
A canceled order needs a separate review. If picking was already completed, check whether the agreement allows a picking or restocking charge. The order history should show what happened before the cancellation.
The same check applies to rework. Before billing for relabeling, for example, confirm whether it was an extra client request, part of an existing project, or work needed to correct a warehouse mistake. Follow the agreed treatment rather than charging automatically.
Test a Few Orders Before You Start Billing
Run sample transactions and compare the invoice with a calculation checked separately. Under this article's rate card, a one-item order should cost $2, while a five-item order should cost $3.60 for order handling and additional items.
Also test a split shipment, a cancellation, and a task recorded twice. Check that a $2,100 service total produces a $400 minimum adjustment.
If rates change during a month, keep both versions and define which date determines the price. If you use volume discounts, specify whether the lower rate applies only above the threshold or to all qualifying volume. Test those rules before using them on client invoices.
Using Fulfillor for Client Billing
Fulfillor's 3PL billing software connects warehouse activity with client rate cards and billing reports. This helps operations and finance review charges using the same records.
During setup, confirm how your billing units, minimums, and exceptions will be handled. Our 3PL billing automation guide explains the wider process, or you can schedule a call to discuss your requirements.