3PL Health Check

TLKSource Sample Co · TLKS-2026-0035 · 16/05/2026

Executive summary. TLKSource Sample Co is paying Eastside Logistics approximately $3.47M annualised across Q1 2025 invoices, with storage rates 20-30% above metro east-coast market benchmarks and an escalating, opaque Fuel Adjustment Factor (FAF) climbing from 4.2% to 5.1% in three months. We have identified ~$420K-$580K in annual cost exposure across storage premium, FAF escalation, fixed admin loading, and uncapped surcharges. The rate card itself is competitive on outbound handling but the surcharge layer and fixed monthly fees are eroding that position.

Headline findings

Finding	Severity	Cost exposure
Storage rates materially above market	high	$130,000
Standard pallet storage is charged at $42/pallet/month (3PL Services Agreement) against a uTenant Q1 2025 metro east-coast range of $25-$45/pallet/month, sitting at the top of market. High-turn pallets at $58/pallet/month exceed the published range. With ~975 standard + ~143 high-turn pallets/month across Jan-Mar invoices (lines: Invoice 2025-01 storage lines, Invoice 2025-02 storage lines, Invoice 2025-03 storage lines), a re-rate to mid-market $33/pallet would save ~$108K/year on standard storage alone.
FAF escalating with no transparency	high	$135,000
Fuel Adjustment Factor climbed from 4.2% ($7,853) in January to 4.8% ($9,445) in February to 5.1% ($11,286) in March — a 44% increase in the surcharge dollar value over 90 days. No published index or cap is visible in the extracted rate card. Annualised at March's run-rate this is ~$135K with upward trajectory.
Fixed admin fees stacked at $37.8K/year	medium	$20,000
Account management ($1,800/month), IT/WMS connectivity ($950/month) and Reporting ($450/month) total $3,200/month or $38,400/year in fixed admin charges (3PL Services Agreement admin lines; consistently billed on all three invoices). For a customer spending ~$290K/month, this is a 1.1% admin load on top of activity-based pricing, which is high — market practice typically bundles reporting and connectivity once monthly spend exceeds $200K.
Ad-hoc and one-off charges appearing without contract reference	medium	$40,000
Invoice 2025-01 contains a $1,850 'System integration charge - one-off' and $4,280 'After-hours surcharge - weekend pick'; Invoice 2025-02 contains $3,200 'Special handling - hazardous (25%)'; Invoice 2025-03 contains $720 'System support ad-hoc' at $180/hour. None of these line items appear in the extracted rate card. These represent unbudgeted charges that should be either rate-carded or removed.
FCL loading charge double-dipping risk	medium	$95,000
Outbound FCL loading is charged at $42/pallet (1,845 / 2,020 / 2,155 pallets across Jan-Feb-Mar = ~$252K over the quarter, ~$1.01M annualised) on top of a separate $18/pallet 'Pallet build' charge billed on 640 and 720 pallets in Feb and Mar. We recommend confirming with the provider that pallet build and FCL loading are not overlapping activities on the same pallet movement; if they are, the saving is material.

Finding

Severity

Cost exposure

Storage rates materially above market

high

$130,000

Standard pallet storage is charged at $42/pallet/month (3PL Services Agreement) against a uTenant Q1 2025 metro east-coast range of $25-$45/pallet/month, sitting at the top of market. High-turn pallets at $58/pallet/month exceed the published range. With ~975 standard + ~143 high-turn pallets/month across Jan-Mar invoices (lines: Invoice 2025-01 storage lines, Invoice 2025-02 storage lines, Invoice 2025-03 storage lines), a re-rate to mid-market $33/pallet would save ~$108K/year on standard storage alone.

FAF escalating with no transparency

high

$135,000

Fuel Adjustment Factor climbed from 4.2% ($7,853) in January to 4.8% ($9,445) in February to 5.1% ($11,286) in March — a 44% increase in the surcharge dollar value over 90 days. No published index or cap is visible in the extracted rate card. Annualised at March's run-rate this is ~$135K with upward trajectory.

Fixed admin fees stacked at $37.8K/year

medium

$20,000

Account management ($1,800/month), IT/WMS connectivity ($950/month) and Reporting ($450/month) total $3,200/month or $38,400/year in fixed admin charges (3PL Services Agreement admin lines; consistently billed on all three invoices). For a customer spending ~$290K/month, this is a 1.1% admin load on top of activity-based pricing, which is high — market practice typically bundles reporting and connectivity once monthly spend exceeds $200K.

Ad-hoc and one-off charges appearing without contract reference

medium

$40,000

Invoice 2025-01 contains a $1,850 'System integration charge - one-off' and $4,280 'After-hours surcharge - weekend pick'; Invoice 2025-02 contains $3,200 'Special handling - hazardous (25%)'; Invoice 2025-03 contains $720 'System support ad-hoc' at $180/hour. None of these line items appear in the extracted rate card. These represent unbudgeted charges that should be either rate-carded or removed.

FCL loading charge double-dipping risk

medium

$95,000

Outbound FCL loading is charged at $42/pallet (1,845 / 2,020 / 2,155 pallets across Jan-Feb-Mar = ~$252K over the quarter, ~$1.01M annualised) on top of a separate $18/pallet 'Pallet build' charge billed on 640 and 720 pallets in Feb and Mar. We recommend confirming with the provider that pallet build and FCL loading are not overlapping activities on the same pallet movement; if they are, the saving is material.

Market benchmark

Line item	Current	Market range	Verdict	Source
Storage — Standard pallet position	$42	$25–$45	above_market	uTenant Q1 2025
Storage — High-turn pallet	$58	$30–$50	above_market	uTenant Q1 2025
Outbound — Pick case	$1	$1–$2	in_range	public 3PL pricing
Outbound — Pick eaches	$1	$0–$1	in_range	public 3PL pricing
Inbound — Container unload 40ft	$295	$220–$380	in_range	public 3PL pricing
Value-add — Re-work labour / Quality inspection	$58	$48–$65	in_range	MA000084
Administration — Account management (monthly fixed)	$1,800	$0–$1,500	above_market	public 3PL pricing

Line item

Current

Market range

Verdict

Source

Storage — Standard pallet position

$42

$25–$45

above_market

uTenant Q1 2025

Storage — High-turn pallet

$58

$30–$50

above_market

uTenant Q1 2025

Outbound — Pick case

$1

$1–$2

in_range

public 3PL pricing

Outbound — Pick eaches

$1

$0–$1

in_range

public 3PL pricing

Inbound — Container unload 40ft

$295

$220–$380

in_range

public 3PL pricing

Value-add — Re-work labour / Quality inspection

$58

$48–$65

in_range

MA000084

Administration — Account management (monthly fixed)

$1,800

$0–$1,500

above_market

public 3PL pricing

Red flags

Fuel Adjustment Factor mechanism: FAF rose from 4.2% to 5.1% in 90 days without any visible index reference, cap, or notification mechanism in the extracted rate card. The customer has no defence against further escalation. → Re-negotiate FAF to a published index (e.g. Australian Institute of Petroleum TGP) with a transparent formula, monthly reset, and a contractual cap (e.g. ±2.5% movement triggers review).

Surcharge framework — undocumented charges: Hazardous handling (25%), after-hours/weekend pick, system integration, and ad-hoc system support charges have appeared on invoices but are not present in the extracted rate card. Customer cannot forecast or validate these charges. → Require all surcharges and ad-hoc rates to be rate-carded with triggers and approval thresholds. Any charge not on the schedule requires written authorisation prior to incurrence.

Storage rate basis: Flat $42 standard / $58 high-turn pallet rates with no volume tier. Customer has consistently maintained 940-1,020 standard pallets — a stable, committed footprint — but receives no volume discount. → Negotiate a tiered storage rate with a committed baseline (e.g. 900 pallets @ $32, overflow @ $38) and a sub-let mechanism for unused commitment.

Fixed admin fees: $3,200/month fixed regardless of activity volume — these scale with the relationship not with cost-to-serve. → Bundle account management, IT/WMS and reporting into a single fee capped at $1,500/month, or convert to a % of activity spend with a cap. We recommend reviewing with legal counsel before changing the fee structure to ensure no breach of existing commitments.

Negotiation playbook

1. Issue a formal rate review request citing the uTenant Q1 2025 storage benchmark and the FAF escalation pattern
Storage and FAF together represent ~$265K of identified annual exposure on a ~$3.47M spend — material enough to warrant a contract reopener without going to tender — Target: Standard pallet rate reduced to $32-$35; high-turn to $48-$50; FAF tied to a published index with a 5.5% cap

2. Demand a closed rate card covering every charge type appearing on the last 6 invoices
Hazardous, after-hours, system integration and ad-hoc system support charges totalling ~$10K across Q1 are off-schedule — closing this loophole prevents an estimated $40K/year of unbudgeted leakage — Target: Written rate schedule covering 100% of invoice line types, with any new charge type requiring 30 days written notice

3. Run a controlled benchmark RFI to 3 alternative metro east-coast 3PLs using the actual Q1 volume profile (945-1,170 pallets stored, ~6,020 FCL pallets/quarter, ~133K picks/quarter)
Even without intent to switch, a credible alternative quote shifts negotiation leverage substantially; the activity-based lines benchmark in-range so this is purely a storage and surcharge play — Target: Two written alternative quotes within 60 days to use as a negotiating anchor

4. Audit FCL loading vs pallet build billing on a sample of 50 shipments
If pallet build ($18) and FCL loading ($42) are being charged on the same pallet, this is a process double-charge worth ~$95K/year at observed volumes — Target: Written clarification of when each charge applies; credit for any historical double-charging identified

5. Convert fixed admin fees ($3,200/month) into a single bundled fee or % of activity
Three separate fixed admin lines are unusual for a customer at this spend level; bundling typically yields a 30-40% reduction — Target: Bundled admin fee at $1,800-$2,000/month, saving $14K-$17K/year

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TLKSource · hello@tlksource.com.au