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Reduce shipping costs of small parcel shipments seamlessly

The postage charges of the U.S. Postal Service are rising, according to the latest news. USPS Ground Advantage service is one of the simplest, affordable ways of shipping small parcels. But, its prices have increased. Similarly, there is an increase in the prices of USPS Priority Mail® and USPS Priority Mail Express® services. Further, the annual shipping rates of major small parcel carriers like FedEx and UPS have seen an upward trajectory.

It has led to a rise in the cost of shipping services for businesses. Many shippers are searching for faster and cheaper ways of shipping small parcels. Small parcel delivery companies offer discounts and affordable shipping rates. However, shippers need to know where to look to get the best service.

Regional carriers compete with the bigger shipping couriers with offers of different service options, fees, and more. Nowadays, the demand for free shipping and fast delivery is growing. E-commerce owners have to fulfill customers’ expectations and lower shipping costs. So, companies must find ways to reduce shipping costs.

This blog will cover the five ways to lower shipment costs and make profits for companies.

Factors affecting shipping costs

Small parcel shippers face challenges of packaging and labor shortages. To increase business profits, reducing shipping costs is vital. In addition, it is necessary to meet customer expectations when delivering small parcels. There are several factors affecting shipping costs.

The main factors affecting shipping costs include

  • Delivery speed and service

Faster small parcel delivery satisfies customers’ needs. Last-mile delivery of packages can influence shipping costs. In addition, the service levels provided by small parcel carriers like ground or air transport affect the shipping costs.

  • Weight and dimension of packages

Heavier packages cost more. Package dimensions also can affect shipping costs. Bulkier packages occupy more space in a delivery truck. Thus, small parcel delivery companies charge more for the packages.

  • Shipping distance

It will be costly to ship a small parcel far away. It will be cheaper to ship it to a nearby location. Small parcel shipping costs increase depending on the shipping zones within the contiguous US states. Small parcel international shipping involves taxes and duties affecting shipping costs.

  • Surcharges

Accessorials can influence the shipping expenses. There are many surcharges, like additional handling charges, fuel surcharges, residential delivery fees, delivery area surcharges (DAS), and more. The surcharges can add to the shipping costs if the shippers are not vigilant during shipping.

These factors will affect the calculation of shipping charges. Companies can reduce expenses by partnering with 3PLs and warehouse management. Further, they can invest in efficient packaging methods and streamline the shipping process.

Five ways to reduce shipping costs

According to the latest statistics, 47% of online shoppers abandon their carts due to extremely high costs. The high shipping costs could be due to taxes or shipping rates. Longer delivery time is also one of the reasons for cart abandonment. Shippers can reduce shipping costs in several ways. Audintel advises our customers about the ways to save money. Here are five easy ways to lower shipping costs.

  • Using advanced tracking software tools

Automated Transportation Management Software (TMS) allows shipping companies to reduce expenses. The tracking software helps shippers track their shipments. It provides an accurate shipment delivery time. Companies can cut shipping costs by effective planning of transportation budgets.

Audintel’s TMS effectively manages shipping spend by managing small parcel carrier payments and performance. It gives shippers an edge over shipping carriers when requesting refunds for late deliveries. Audintel monitors the package deliveries and files a refund for our customers. Shippers get insights into real-time tracking of small parcels.

  • Management of shipping rates

Small parcel carriers offer different shipping rates and delivery services to customers. FedEx and UPS increase their shipping rates annually. Shippers can choose the service levels that suit their business needs. Further, they can check the services of alternate shipping carriers. So, shippers choose from the shipping rates of many prime and regional small parcel carriers.

Audintel gives comparison data about the parcel carriers’ rates to shippers. It provides valuable data insights to shippers. Audintel helps companies optimize their shipping operations with small parcel data management. Managing shipping rates of small parcel carriers allows shippers to save money.

  • Negotiating with small parcel carriers for the best shipping prices

A well-negotiated deal is the core of each shipment. Thus, negotiations with small parcel carriers are vital for companies. Shippers can reduce shipping costs by negotiating a flat fee from small parcel carriers. Shipping carriers like UPS and FedEx offer better fees for small parcels based on the size, weight, and destination. Shippers can expect discounts for some services from small parcel carriers.

Experts from Audintel have the data about shipping rates and discounts of shipping carriers. They inform shippers about the discounts and shipping rates of the small parcel carriers so that they get the best deal. Businesses can negotiate shipping rate discounts before the annual General Rate Increase (GRI). In this way, shippers benefit from discounts offered by small parcel carriers.

  • Inform shippers of the importance of shipping audits.

Customers hate unexpected charges in their invoices during the checkout process. Shipping companies can educate customers on the complexities of the shipping process. Shippers can reduce shipping costs by creating pick-up points for customers’ orders. Businesses can negotiate with fulfillment centers for shipping packages quickly.

Moreover, shippers can decrease the size of the packages to save money. For example, use a poly mailer for small parcels instead of a box. In addition, companies can reduce the weight and dimensions of small parcels. For instance, use lightweight and compact packaging material.

Shipping audits are essential for companies to lower shipping costs. Our team at  Audintel provides an in-depth audit of the shipping process. It identifies mistakes made by small parcel carriers. We point out any improper invoicing or unnecessary charges levied by shipping carriers.

  • Streamlining the shipping process

The entire shipping process requires streamlining from beginning to end. Companies can increase profit margins by optimizing the supply chain model. Identification of supply chain bottlenecks in time prevents shipping disruptions. In addition, shippers need to pay attention to customers’ needs. Shipping companies need to adopt advanced shipping processes with efficient planning.

Audintel advises shippers about shipping strategies to increase profit margins. We provide business models to shippers that lower shipping costs. Presenting real-time delivery updates to customers helps increase customer satisfaction. Further, Audintel provides customized shipping reports for shippers to streamline their shipping processes.

How Audintel services reduce shipping costs

Audintel’s audit team has TSM services to help shippers manage their shipping profiles. Our TSM services include

  • real-time tracking of shipments
  • identifying invalid, inaccurate billing charges
  • assessing carrier contracts
  • saving with accurate pricing calculations
  • analyzing Transportation Spend
  • claims and refund processing, etc.

Audintel’s state-of-the-art cloud-based software provides access to the best shipping rates. It allows shippers to compare shipping rates of different small parcel delivery companies. We offer real-time shipping data to shipping companies. Our AI-based technology saves money and time for our clients. We aid shippers in negotiating good contracts. As a result, shippers receive the best deals and discounts. In addition, we provide shipping strategies to customers that help reduce shipping costs.

The bottom line

Small parcel shipping is complex, whether you ship locally or globally. Small parcel delivery companies add to the complexity by increasing their shipping prices. Businesses are looking for ways to ship small parcels economically and effortlessly. Small parcel audit companies help companies lower shipping costs with minimum hassles. Audintel gives shippers peace of mind with its sophisticated business intelligence solutions for Transportation Spend Management. The data analytics provided by Audintel helps shippers save money. Need help in reducing shipping costs- contact us at +1 (619) 354 8539. Further, visit our Audintel website to learn more about our services.

How to lower shipping costs

How to reduce shipping costs credibly with a rise in revenue?

Shipping carriers have diverted trade from the Red Sea in the past few weeks. Ocean freight is taking longer routes around Africa to avoid the threat of violence in the Middle East area. Shipping parcels and freight to different places is becoming expensive. And so, shipping costs are rising for many businesses globally.

Furthermore, the shipping rates imposed by different parcel carriers like UPS and FedEx will increase in 2024. Companies have the challenge of reducing shipping costs efficiently. In addition, it is necessary to build back some profit margins for e-commerce businesses.

Calculating and understanding shipping costs is confusing for many shippers. So, we have compiled ways to reduce shipping costs in this blog. Our earlier blogs on shipping costs are also helpful. Check our blogs on shipping costs related to shipping reports, data analytics, and more.

Initially, let’s start with the concept of Shipping costs.

Shipping costs

These are the expenses involved in sending packages from warehouses to customers. Packaging, transportation expenses, labor, carrier fees, etc., form part of the shipping costs. In addition, fuel charges, taxes, shipping services, and distance contribute to shipping costs. Moreover, businesses have to find the shipping carrier that suits their needs. The cost of shipping can lead to customers abandoning their carts.

Businesses can cut down shipping costs by adopting cost-effective strategies.  Further, shippers can improve their profit margins by following reliable ways to reduce shipping expenses.

Efficient and reliable ways to reduce shipping costs

Many factors cause a rise in shipping costs. Understanding them is essential in lowering shipping expenses. Below are a few ways to reduce shipping costs and boost profits.

  • Make packaging lighter and smaller.

Packaging is an integral factor in reducing shipping costs. Shippers can optimize packaging using efficient, lightweight packing materials like corrugated cardboard, EPS foam, PET plastic, etc. Lightweight packaging helps reduce storage costs and the weight of the shipments. In addition, recyclable materials and customized packaging can save money for businesses.

By using small boxes and mailers, shippers can reduce transportation costs. Small packages occupy less space, allowing companies to ship more packages quickly. For instance, using poly bags or mailers for shipping clothes is feasible. Sustainable and durable packaging can improve businesses’ operational efficiency. Low package weights can minimize shipping costs considerably.

  • Keep DIM Weights in check.

Dimensions of parcels can make a difference in shipping expenses. Dimensional (or DIM) weights can determine the shipping costs. DIM weights are calculated based on the space occupied by a package rather than its actual weight. For instance, an irregular box containing balloons will cost more than a compact box of books. Space-consuming packages cost more.

Shippers can keep DIM weights in check by opting for small and compact packaging materials. In addition packaging efficiently and using sustainable options helps the environment. Some companies can also partner with third-party Logistics (3PL) for managing DIM weights.

  • Utilize packaging provided by shipping carriers.

Another way of reducing shipping costs involves the use of packaging provided by shipping carriers. Companies that use their packaging might face additional charges. For instance, shippers pay more if the box size exceeds the shipping carriers’ regulations.

Parcel carriers like UPS and FedEx have their branded logo on their boxes. The advantage of using carrier packaging is shippers don’t need to calculate their DIM weights. Moreover, shipping carriers give special rates or services for using their packaging.

Shippers can look for discounted supplies to decrease shipping costs. Shipping carriers like UPS offer discounts or free supplies to small businesses. Packaging materials like bubble wraps, poly mailers, etc, can be purchased in bulk. Many companies offer discounts for buying supplies in bulk. Discounted supplies will help small business owners to boost their profits.

  • Consolidate orders wherever possible

Businesses can consolidate orders in a single shipment if many items go to the same address. Shippers save money if they don’t have to pay for multiple packages. Consolidating orders improves the customer experience and reduces the need for returns. It helps in reducing shipping costs and minimizes package waste.

  • Opt for PrePaid Shipping

Shippers can purchase numerous prepaid shipping labels from shipping carriers. Prepaid shipping labels contain the required information with a barcode. It helps businesses ship packages at no additional cost. It is ideal for packages with the same weight to be shipped out often. Businesses get discounts from shipping carriers like UPS and FedEx for using their printing services. It is a way of reducing shipping costs for shippers and boosting profits.

  • Reduce shipping distances

Shipping fees increase with further distances. Shipping carriers impose a fuel surcharge if the package has to go a longer distance. In addition, parcel carriers charge more for handling the packages. Shipping packages internationally attract custom fees. Shippers need to reduce the shipping distance of their packages to save money.

Businesses can choose warehouse locations closer to customers so that the shipping charges decrease. Further, shippers can partner with fulfillment centers in each shipping zone to reduce shipping distance. These steps will help reduce shipping costs and boost profits.

  • Negotiate with several shipping carriers.

Companies need not stick with a single shipping carrier for their shipping needs. Several shipping carriers offer different prices for various services. Higher shipping volumes attract lower shipping fees. Hybrid services by UPS and FedEx use local post offices for last-mile delivery. It reduces shipping expenses for shippers. Further, smaller regional carriers offer discounts or value-added services for some locations.

Shippers can negotiate with the shipping carriers to lower shipping rates. Shipping companies offer discounts to businesses even with low shipping volumes. Competitive shipping rates provided by shipping carriers help shippers. Building relationships with the shipping carriers helps shippers reduce fees. And so businesses can reduce shipping costs and increase their profit margin.

  • Use third-party insurance

During shipping, there are chances of untoward events affecting the cargo. Businesses need to insure their products to prevent any damage or loss. For example, valuable goods like precious stones and musical instruments require insurance. Shipping carriers offer their insurance as part of the service or as a stand-alone charge.

Shipping insurance of shipping carriers can often cause a dent in a business’s profit margins. Third-party insurance companies offer cheaper rates than these shipping carriers. So, shippers can use third-party insurance to save on shipping costs.

  • Minimum purchase amount for free shipping

Shippers should set a minimum purchase amount when offering customers free shipping. Businesses can set the rate for those orders that are profitable to them and are highly purchased by customers. Payment will be for orders which don’t meet the free shipping threshold. The concept of free shipping encourages customers to buy more and avail of free shipping. Shippers can reduce shipping costs and increase their profits by this method.

As discussed above, there are many methods to reduce shipping costs.

Here are some tips for small businesses to reduce shipping costs

  • Automate shipping processes

By implementing advanced technology, small business owners can reduce shipping costs. Software solutions can automate shipping processes, give real-time tracking data, and speed up order processing. Further, data analytics helps avoid excess inventory expenses and forecasts shipping volumes. Audintel has state-of-the-art technology to help small business owners streamline their processes.

  • Customer-friendly approach

Regular assessment of data helps shippers offer shipping incentives to customers. Providing customers with real-time tracking information reduces inquiries. Further, any shipment delay notification to customers brings in a level of transparency. Small business owners can also offer loyalty programs that reward repeat customers. It can increase profit margins for shippers.

  • Partner with 3PL

A 3PL partner can lower shipping costs for small business owners. They can negotiate lower shipping rates with shipping carriers due to their shipping volumes. Further, small business owners can separate their inventory across different warehouses across the US. It helps to reduce labor costs and shipping errors.

The bottom line

Whether you are a small or large business owner, reducing shipping costs is vital. The methods described above help businesses save money and garner profits. Audintel aids its clients in managing their shipping costs and increasing their profits. Our team of experts can optimize your shipping operations seamlessly.

If you need help understanding shipping costs, contact us at +1 (619) 354 8539. Further, you can visit our Audintel website.