Dive Brief:
- Flexport's monthly minimum fee for its fulfillment services will increase from $500 to $5,000 at the start of 2026, according to the logistics provider's website.
- The minimum fee factors in a merchant's "non-D2C storage spend," which encompasses eight spending categories: Fulfillment, reserve storage, parcel, full truckload and less-than-truckload freight, pallet and case handling, label services, prep and credit card processing.
- If a seller spends less than the monthly minimum across the eight categories in a given month, Flexport charges the difference between their actual spend and the minimum. The charge is included in the first invoice of the following month.
Dive Insight:
The fee aims to help Flexport "maintain the operational capacity and infrastructure necessary to support merchants" in its fulfillment network, the company said. When Flexport began enforcing the $500 minimum on July 1, the company said it expected only merchants fulfilling fewer than 40 orders per month to be affected.
"You can avoid the Monthly Minimum Fee by utilizing more non-D2C storage services offered by us," Flexport said on its website. "Additionally, as your business continues to grow, the impact of the Fee will decrease."
The minimum fee's jump to $5,000 starting in January means a wider range of merchants using Flexport could be vulnerable to the charge. Brands seeking fulfillment alternatives to Flexport due to the increase have options, but switching providers with the Q4 shipping rush approaching "makes it a little more challenging," said Matthew Hertz, founder and CEO of Third Person, which connects e-commerce sellers with 3PLs.
"There are many 3PLs who can support these brands well and if their stack is simple (i.e. Shopify) they shouldn't have a problem transitioning rather quickly," Hertz said on LinkedIn.
After acquiring Shopify's logistics arm in 2023, Flexport rolled out fulfillment services aimed at small- and medium-sized businesses like Flexport Revolution. But a company spokesperson told Supply Chain Dive last year that Flexport was sharpening its focus on larger customers to scale its business profitably.
Within its fulfillment services, Flexport unveiled a dropshipping offering and an AI-powered demand planning and inventory distribution tool earlier this year.
