Key Takeaways
- Shippers need to explore a variety of options to control rising parcel costs.
- It pays to consider dimensional weight, average order value and service levels.
- A new ebook from Saddle Creek explores a variety of helpful parcel strategies.
Rising costs continue to make parcel shipping more challenging – especially for retailers and brands using lightweight residential service. While the impact of FedEx and UPS General Rate Increases (GRI) varies based on shipment characteristics, most parcel shippers should anticipate a net impact of 8% to 9%. Increases in surcharges (i.e., fuel, dimensional weight) pose additional challenges.
With record demand, carriers are unlikely to negotiate rates, so shippers need to find creative ways to reduce their parcel spend. Saddle Creek Logistics’ new Parcel Solutions Guide offers a number of strategies to help. Following is an excerpt…
Strategies to Help Reduce Your Shipping Costs
Pack wisely.
If you regularly ship large, lightweight items, be sure to consider the dimensional (DIM) weight of your packages. Use the smallest possible package size and pack the contents efficiently to optimize package density.
Increase average order value.
Consider building custom deal structures to help offset high transit costs. Bundling products together, for example, can increase average order value relative to shipping costs.
Find the right balance. In this era of Amazon, shoppers certainly value fast, free shipping, but it’s important to strike a balance between service and cost. You can’t afford to ship every order with expedited service – especially if your average order value skews on the low side. It’s also worth noting that, according to a recent Deloitte survey, 85% of shoppers say free shipping is more important than fast shipping.
In most cases, receiving an order when expected is just as important to consumers as speed. The key is to provide the level of service your customers expect – reliably and at the lowest possible cost to you.
For more strategies, read the 2022 Parcel Solutions Guide.
