Hey Startup CPG Fam!

Remember in school when someone shared their exam notes and saved the whole class? That’s what we’re aiming for here. We’ve done the heavy lifting scouring our Slack channel and tapping some of our freight pro friends to bring you a cheat sheet on shipping logistics.

From tips and tricks to the basics of getting your awesome product from point A to point Z, we’ve got you. Are you picking up what we’re putting down? Oh wait… that’s your logistics team’s job. 😉🚚

Don’t forget to check out our FREE databases including:

• Startup CPG Warehouse & 3PL Fulfillment Database
• Startup CPG Freight Database!

Understanding the Key Players

The logistics world has three main types of service providers, each handling different parts of your supply chain:

• Freight Forwarders handle comprehensive A-to-Z logistics including ocean freight, air freight, customs clearance, and final delivery. They’re your one-stop shop for international shipping.
• Brokers focus specifically on domestic trucking, covering that crucial middle-to-end portion of your shipment journey.
• Customs Brokers specialize in clearing imports through customs, handling that final critical step before your goods reach their destination

Why Consolidation Matters

Fewer hands = fewer mistakes and fewer delays. This becomes especially important with time-sensitive shipments like air freight, where you have just 24 hours to collect your goods before expensive storage fees kick in – and those fees are charged by the kilogram. One great provider will always outperform juggling multiple vendors.

Finding the Right Freight Forwarding Partner

Finding the perfect freight forwarder requires strategic sourcing. Referrals are gold in this industry. Start by asking:

• Fellow operators in communities like the Startup CPG Slack channel
• Check out our FREE Startup CPG Freight Database
• Your co-manufacturer (who likely has established relationships)
• Search LinkedIn and the CBP broker directory for qualified candidates

Think of a great freight forwarder like a certified public accountant – they should be a trusted partner capable of navigating complex systems. This relationship should be long-term, and you should feel completely empowered to ask them anything while knowing you have their attention when needed.

🟢 Green Flags: What to Look For in a Quality Forwarder

• Asks you questions to understand your specific business and category
• Shows genuine understanding of your product category and its unique requirements
• Operates with a sense of urgency and treats your shipments as priorities
• Shares their cell phone number and makes themselves accessible

Getting and Comparing Quotes

• Always get 3 quotes and compare the main cost components: ICI filing, ocean freight, trucking, and handling fees. Remember that cheaper isn’t always better.
• Handling fees should be minimal ($50 – $100). Quality forwarders earn their margin through rate arbitrage rather than hefty markups on handling.

🔴 Red Flags to Avoid

• Unclear or padded fees – definite dealbreakers
• No facility tour offered when selecting a 3PL
• Can’t answer what brands they love working with – you may be just another box to them

Vetting Experience and Problem-Solving Ability

Ask this critical question: “What’s something that went wrong, and how did you handle it?” Great forwarders solve issues before they become major problems – even if those problems involve modern-day pirates (yes, this really happens). Experience absolutely matters.

Understanding the Shipping Process

The typical flow: NDA → Quote → Approval → Pickup → Transit (where chaos meets magic) → Delivery.

For ocean and air freight, forwarders leverage volume-based contracts with major carriers. Ocean freight faces constant overbooking – your partner’s relationships help keep you off the dreaded bump list.

Shipping Method Options

Ocean Freight: Full container loads (20′, 40′, or 45′ containers); LCL (Less than Container Load) for shared container space

Air Freight: Fast but expensive, ideal for urgent shipments or high-value products

Trucking Options: Full truckload (FTL) for large shipments; Box truck for smaller loads; LTL (Less than Truckload) for shared space

Express Courier Services: DHL, UPS, and similar services work perfectly for 1-2 boxes that aren’t cost-effective to truck or air ship.

Cost Optimization Strategies

• Use standard cargo sizes to optimize pallet utilization
• Ship during off-peak periods when possible
• Plan 2 quarters ahead to avoid expensive Q4 shipping spikes
• Utilize LCL and LTL options when appropriate for your volume
• Refrigerated freight costs 2-3x more and pricing varies significantly by season

Managing Tariffs and Customs

Give your forwarder and customs broker at least 3 months’ notice to strategically time shipments. Skip the news headlines and get real-time updates directly from your logistics team who understand the current landscape.

Choosing the Right 3PL

Every successful brand scales with a secret weapon: an exceptional 3PL.

Check out the Startup CPG Warehouse & 3PL Fulfillment Database!

Understanding 3PL Capabilities

3PL capabilities vary dramatically. Traditional 3PLs focus solely on storage and shipping, while advanced providers offer comprehensive services including strategic planning, inventory management, EDI integration, influencer kit fulfillment, omnichannel support, and much more

Location Strategy Matters

Some brands prioritize proximity to their manufacturer to minimize freight costs, while others focus on areas with concentrated sales activity. Central hub locations like Denver offer nationwide flat-rate shipping consistency.

Important: Switching 3PLs proves both painful and expensive, so choose a partner committed to long-term collaboration.

Essential 3PL Selection Criteria

Transparency is Non-Negotiable

Always visit facilities before signing. 🔴 Red Flag: No tour offered.

Aligned Pricing Models

Request quotes based on a real month of orders including DTC, wholesale, and other channels. Hidden fees often surface when you only review best-case scenarios. Ensure their pricing model (flat rate vs. pick-and-pack) aligns with your COGS and sales strategy.

True Partnership Mentality

Ask: “What brands do you love working with?” 🔴 Red Flag: If they can’t provide a clear answer, you may just be another box to them.

Industry-Specific Considerations

For F&B brands: Ensure your 3PL thoroughly understands recalls, regulatory requirements, and compliance obligations. Category experience matters enormously.

The 3PL Process and Costs

Typical flow: NDA → Statement of Work → Onboarding → Test Orders → Full Fulfillment Operations.

Expected costs include: fulfillment fees, storage charges, freight and carrier fees, special project costs, and additional services like technology access and service fees.

Timing Your 3PL Transition

The sweet spot: When you’re processing approximately 50 direct-to-consumer orders per week and preparing to enter retail partnerships.

Bridge option: Shared warehouse spaces like Saltbox can bridge the gap between DIY fulfillment and comprehensive 3PL partnerships.

Key Questions to Ask

Ask specific, detailed questions:

• “How long will this process take?”
• “Can we run a test program?”
• “What’s the per-unit or hourly rate?”

The more questions you ask, the more accurate your true cost projections become.

Strategic Partnership Over Cost-Cutting

Choose a strategic partner rather than simply pinching pennies. Focus on driving sales growth instead of just reducing costs – economies of scale will ultimately make the biggest difference in your bottom line.

Managing Retail Relationships

Don’t panic when dealing with big retailers. If terms don’t work for your business (large POs with slow payment terms), push back professionally. Know your worth, ask for what you need, and protect your supply chain integrity.

Building Long-Term Success

Treat your logistics partners as long-term collaborators. Maintain transparency, communicate clearly, and tap into their expertise – they genuinely want you to succeed.

Pro Tips for Logistics Success

• Know Your COGS: Understand your cost of goods sold intimately. Your supply chain isn’t operating as a nonprofit. When you’re collaborative and clear about targets, you’ll often achieve better pricing results.
• Plan Ahead: Strategic planning prevents expensive rush situations and gives you negotiating power.
• Build Relationships: The logistics industry runs on relationships. Invest time in building strong partnerships.
• Stay Informed: Keep current on industry trends, regulatory changes, and seasonal patterns.
• Test and Validate: Always run tests before committing to new providers or processes.

By following this comprehensive guide, you’ll build a robust logistics foundation that scales with your business growth while maintaining cost efficiency and operational excellence. Remember, great logistics partnerships are investments in your company’s future success.

A special thank you to Ricky Lam, freight forwarding expert from D.I.T New York Inc. (rickyl@dit-nyc.com) and Caitlin Wilson, 3PL+ wiz from Full Good Fulfillment (caitlin@fullgoodfulfillment.com) for their valuable insights and exceptional knowledge! Feel free to reach out to them with additional questions or project inquiries!

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