Sending individual packages through shipping carriers is not as easy as it looks. Different shipping carriers offer various areas of expertise for shipping items. Choosing the best shipping carriers for small parcel shipping can get confusing. UPS, FedEx, and USPS are the major shipping carriers in the U.S. However, a recent Reuters report says that UPS had an unfavourable quarter due to falling demand from e-commerce and labor issues. The impact of inflation on operating expenses is affecting shipping carriers. So, parcel carriers are competing with each other to offer discounts and lower transportation costs. Despite the economic slowdown, there is an opportunity for an increase in market growth.
According to some reports, the parcel shipping volumes will reach 256 billion in 2027. Shipping carriers believe e-commerce retailers and small businesses will have good holiday sales this quarter. Companies need to optimize parcel shipping operations in anticipation of rising holiday sales. They have to reduce their overall transportation expenses and adopt a multi-carrier strategy. In addition, the right innovative solutions can help businesses overcome the hurdles of shipping small packages.
This article gives further details on clever ways to ship parcels. In addition, shippers can learn about the fastest and cheapest ways to reduce shipping costs.
Our earlier blog gave a broad overview of overcoming the challenges of small parcel shipping.
Challenges of small parcel shipping
Companies face multiple challenges when shipping small parcels. One of the challenges during this holiday season is ensuring timely delivery of packages. Shipment tracking and insurance ensure that companies provide on-time delivery of packages. Shippers work with parcel carriers to safeguard against delayed or lost shipments.
Further, UPS and FedEx have announced their annual GRIs. It will increase the costs of sending small packages. Lightweight packages with high dimensions can also prove costly for parcel shippers. Surcharges for fuel, residential, delivery area, etc., levied by shipping carriers increase the shipping expenses.
Customer expectations for faster and free delivery of packages is a new reality. So, many companies have to fine-tune their shipping operations to reduce costs. Small and medium-sized companies lack the expertise to navigate complex shipping operations. Third-party logistics providers or 3PL can provide support in areas such as:
- Carrier management for parcel deliveries
During the peak holiday season, parcel carriers face capacity constraints. Thus, it is vital to have efficient carrier management for shipping small parcels. A multi-carrier strategy helps companies ship their packages according to their business needs. Regional parcel carriers can ship locally or to particular regions of the country.
Moreover, it is necessary to know the various holiday shipping deadlines for the parcel carriers. Shippers can plan their shipping strategies based on the deadlines. Shipping carriers provide limited information to customers as they have their software platforms to track packages.
Third-party providers have in-depth knowledge of minimum rates, surcharges, volumes, etc. 3PL can give appropriate information about the carriers and track packages in real time. They have established relationships with parcel carriers and help secure discounts on list rates. In addition, 3PLs can manage a company’s carriers for parcel deliveries if there is a delay or unforeseeable issues.
- Shipping route disruptions
High shipping volumes increase the workload of truck drivers. Moreover, in the peak holiday season, the shipping routes get longer, and trucks have more parcels. There are more chances of human errors in such situations. Last-mile delivery management with technological advancements is necessary to track parcels in real time. Optimizing shipping routes by identifying potential bottlenecks helps in the timely delivery of parcels. Moreover, a delivery hub can cut shipping costs for shippers.
AI-based innovative technology allows companies to have real-time information on package deliveries. Further, 3PLs have local partners that can handle last-mile deliveries. A parcel Transportation Management System (TMS) allows driver route optimization so a maximum number of parcel deliveries can occur. It does not compromise a customer’s preference for the time and date of parcel delivery.
- Minimizing the stress of split shipments
Split shipment involves an order divided into multiple shipments for separate dispatches. Split shipments expedite the delivery process but are costly for businesses. The involvement of different carriers and operational overheads can increase shipping expenses. To streamline their processes, companies have to manage their inventory levels to minimize split shipments.
Third-party providers can provide technologies like warehouse management systems (WMS) or order management systems. It helps companies route orders to cost-effective distribution centres and save money. Further, they leverage shipping data to forecast demand and minimize the likelihood of stockouts.
- Analyze shipping data with third-party logistics
Parcel shipping data like point of origin, package status or exceptions, weight, and size of parcels is essential for strategic business planning. Shippers have to make sense of the historical shipping data to save costs. Systematic shipment monitoring, parcel carrier performance, and customer communications are possible when shippers have data at their fingertips.
Third-party logistics providers, or 3PLs, help companies garner profits with business intelligence tools and provide frequent shipping information to companies. By analyzing the historical shipping data, 3PLs help shippers manage their parcel spend. Further, parcel auditors can continuously monitor shipments, track parcels, and issue real-time customer notifications. The state-of-the-art software tools compare carrier performance, collect refunds wherever applicable, and reduce transportation costs.
Cheaper, faster, and more efficient ways to reduce shipping costs
Shippers can reduce shipping expenses depending on the size and weight of packages, distance, and choice of shipping carriers. Usually, USPS is the cheapest shipping carrier to ship packages. Small parcel shipping by USPS involves
- First Class Mail for packages such as documents, letters, etc., and does not involve tracking
- First Class Package Service is for parcels less than 16 ounces
- Priority Mail is for goods that weigh more than one pound.
Further, according to some reports, the U.S. Postal Services won’t be leving peak surcharges this holiday season.
UPS offers UPS Sure Post service for small packages weighing less than 10lbs. However, FedEx Ground shipping and UPS Ground shipping services are the cheapest ways to ship small parcels. UPS and FedEx have different rates based on weight and distance for faster delivery of small packages. Shippers can refer to the Service Guide of FedEx and UPS to decide which services suit their financial and business needs.
How partnering with Audintel helps overcome the hurdles of small parcel shipping
Audintel’s Transportation Management System (TMS) and integrated software solutions help shippers and 3PLs in timely parcel deliveries. We provide customizable dashboards for real-time tracking and monitoring of shipment status. Customers receive real-time notifications about their parcel status. Our experienced team gives insights into the areas for potential savings during carrier contract negotiations. Audintel’s expertise has helped many companies negotiate discounts on shipping rates, thus reducing shipping costs.
Concluding remarks
Shipping small parcels to customers is not as easy as it looks. Shippers need to overcome numerous challenges for customer satisfaction and repeat business. Third-party logistics providers and parcel management systems help in parcel shipping operations for companies. Audintel’s audit solutions and advanced software tools help shippers understand their shipping costs. We provide customized solutions to overcome the hurdles faced during small parcel shipping. Contact us at +1 (619) 354 8539. to find out how to have seamless parcel shipping. Further, you can visit our Audintel website.