Apply Shopify "Free Shipping" discount to the shipping charges ONLY.
When you have a "Free Shipping"discount code in Shopify, the code is interpreted as a line item and is applied to the product total. Then the original shipping cost (pre-discount) is re-applied.
Logan Freiburghaus Because International commented
Yes we have had this issue as well, but use Squarewspace. We often give discounts on shipping, but they show up as line items in Shipstation. The original shipping cost still shows up in the "Shipping Paid" field. This makes an operations reports about shipping costs totally useless in Shipstation. I've tried contacting customer support multiple times about this, but they simple blame it on Squarespace. I reached out to Squarespace customer support and they said it is an issue with Shipstation. "Their system seems to not discriminate between different discount types and will universally apply anything mapped as a "discount" to take the amount off your order's product subtotal." Please fix this, Shipstation!