Things to Think About: Shipping Packages

Things to Think About: Shipping Packages

You have an item. You sold this item to a person in another city. This item will not fit in an envelope. This item is large. It needs to be put in a box. But, which box? Which carrier do you use? How do you ensure you are getting the best rates and capturing the highest ROI for this item?

Below, I’ve listed 3 things to think about when you are beginning to build your eCommerce business

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UPS & FedEx Raise Shipping Rates for 2017

UPS & FedEx Raise Shipping Rates for 2017

With FedEx and UPS both announcing rate hikes last year, I wanted to take a quick moment to break down the changes in shipping rates:

FedEx’s rate hike took effect on January 2, 2017. Some of these changes include:

  • FedEx Express rates are increasing by an average of 3.9% for U.S. domestic, U.S. export, and U.S. import services;
  • FedEx Ground and FedEx Home Delivery rates are increasing by an average of 4.9%, with FedEx SmartPost rates also changing;
  • FedEx Express and FedEx Ground U.S. domestic dimensional weight advisor will change from 166 to 139;
  • FedEx Freight rates will increase by an average of 4.9%;
  • The FedEx Freight extreme length surcharge will change from $88 to $150, and will be applied to shipments 12 feet or greater compared to the prior 15 feet

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Why Businesses Should Be Rate Shopping

rate shopping

Why Businesses Should Be Rate Shopping

Shipping can often be an overwhelming process. With so many different types of carriers, rates, services and regulations, it’s easy to understand why many customers opt to choose the first carrier that comes to sight without really doing the research to find the best rate. While it may be more time efficient to settle with the first adequate carrier, a more cost-efficient way to ship packages is through rate shopping.

Rate shopping is the process of comparing different carriers– such as UPS, FedEx and USPS–to find the cheapest shipping rate for the same delivery experience. This means that instead of immediately choosing one carrier, you research several different carriers, delivery formats and service levels to find the lowest rate that still delivers the package by the expected delivery date. Shipping-Software-for-Executives_Data-Driven-Decision-MakingRates are dependent on various characteristics, such as dim weight, fuel charge, residential surcharges, freight class, and unit types, all of which carriers charge different prices for. By strategically researching and prioritizing these components, customers can avoid high margin loss when they pick the cheapest possible delivery service. In fact, rate shopping has been accredited to reducing shipping costs by up to 30%. In addition to increasing company profit, money saved in shipping relations can also increase customer acquisition rates. By providing the cheapest shipping rates, businesses are better able to maintain a competitive edge through marketing shipping, such as offering free shipping to increase eCommerce sales.

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