Shipping cost is all the expenses related to the shipping from the business to the end consumer through various channels. It could be as simple as packaging postcards to shipping containers.
A firm incurs a lot of expenses when it comes to its business ventures. Be it the overhead expenses or the shipping costs, the profitability of the company gets affected. A recent study has revealed that 28% of shoppers abandon their carts due to unexpected shipping costs, leading to huge losses for firms that have lead conversions and revenue.
Logistic companies should focus primarily on reducing the shipping costs as their main source of revenue is from Ecommerce shipping solutions. It is time for firms to reassess their strategies and optimize or drastically reduce their shipping cost.
It is estimated that 73% of shoppers expect affordable and fast deliveries when they shop online, so it becomes essential for the firms to reduce their shipping costs and deliver the packages on time!
Reducing the shipping costs-
Now that we have established the importance of shipping costs, let us see how we can reduce these costs and drastically increase the profitability in return.
-The Dimensions- Every large player in the shipping industry uses dimensional weight to determine the costs. It is the entire size of the package, which is calculating all the dimensions that include length, height, and width of the package. Reducing the dimensions or using small packages can help you cut down the dimensions as it becomes a deciding factor for logistics companies like FedEx.
-Experimenting with package types- Lighten up on your parcels by changing the package type. Amware has been using a bagging machine (a machine that packs with accuracy) instead of the traditional boxes. With machines handling all the processes ranging from label printing to label application, paving the way towards reducing the labor costs!
- Reducing the accessorial fees
Accessorial fees are the additional fees that are applied by the shipping companies when there is a delay in delivery. It’s the additional costs that apply if the package delivery goes beyond the prefixed time and this needs to be monitored. Proper auditing is required to reduce the overall accessorial fees especially if you are using FedEx or DHL.
-Change dunnage type
Another easy way to make packaging more efficient and more budget-friendly is to make changes to the dunnage you are using. Dunnage is a material that holds your cargo in a stable way, it acts as a cushion for your shipping materials and Bulk courier services can also elevate the shipping costs. Dunnage is harmless but the more dunnage you add, the more your shipping costs rise. It is better to use shorter boxes which use less dunnage!
-Reducing the surcharges
The surcharge is additional costs incurred additionally to the transportation fee. The service fee and handling charge are surcharges and need to be reduced. Keeping track of the shipments can reduce these surcharges!
- Better address quality
The packages that don’t get delivered have additional costs looming around them like the dark skies. The return postage and the shipping costs are high and the firm might lose a lot of money in this process.
The best way of handling this situation is by using good address quality at the beginning itself. You can do that by registering all the shipping addresses online. Software to keep track of all these addresses is a viable option!
-Get in touch with the 3 PL providers
This becomes a thumb rule when you are using logistics as your revenue. The fastest and the best Online courier services to reduce your shipping costs is by leveraging 3rd party logistics who have been managing packaging for other well-established companies. They will add a certain margin but it is easy to negotiate discounts with them.
Recycling and reusing the packages go a long way in reducing the overall expenses when it comes to shipping. Make sure to negotiate with the dealers and bring down the cost as much as possible. Saving in business eclipses the spending!