Shipping costs can increase over time, especially if factors begin to change. Delivery distance and zones, handling and labor, and surcharges are all factors that can cause costs to increase, and this can be a significant issue for small and medium-sized businesses. With this in mind, it is no surprise that many companies try to cut shipping costs regularly.
But this can be a challenging task. After all, getting orders from A to B is an essential part of an online business, and you will want to ensure this task is carried out perfectly. This doesn’t mean it is impossible, though. There are several ways to do this, and this post outlines three key tips that business owners should remember when attempting to reduce shipping costs.
Choose an Effective Shipping Method
Although the overall business profitability will likely be the priority, this doesn’t mean that customer satisfaction should take a hit. As the shipping method you choose can affect both of these aspects, it is best to focus on this first. An efficient shipping method will ensure deliveries are made promptly, the likelihood of damage is reduced, and the customer experience is a positive one.
Of course, a poorly selected method could cause delays, increased costs, and damage to products, so you need to be smart when choosing. This means comparing the rates of multiple couriers to find the most cost-effective option, and this might vary for each shipment. It could be beneficial to find a delivery service that has the fleet to handle various shipments, like Couriers Texas, which has cargo vans, box trucks, and freight trucks.
However, it is also worth looking at the delivery speed when considering the most effective method. While a flat-rate option can be good if your products fit within a specified dimension and weight limit, hybrid services can be a cost-effective last-mile method if you want to give your customers an extra positive experience.
Optimize the Delivery Routes
If you choose to handle shipping and delivery in-house, then you will need to think about the delivery routes drivers take. A streamlined route can result in significant savings on operational expenses and improve overall logistics performance. This occurs due to the reduced travel distance and time, which causes lower fuel consumption and reduced labor costs. As a bonus for customers, this can also lead to faster deliveries.
Some ways to improve delivery routes are relatively obvious. Changes like combining smaller orders into fewer trips and distributing work based on vehicle capacity can maximize fleet utilization. These modifications can also enable the business to save on driver wages and fuel.
There are different types of software that can be used to optimize delivery routes, too. AI-powered optimization can be used to group nearby orders together, but a specific route optimization system can plan the fastest routes. This is achieved by considering traffic patterns and suggesting the most efficient loading strategies. Additionally, it can be useful to integrate real-time traffic data to avoid delays by making on-the-fly route adjustments.
Select the Correct Packaging
Packaging might be one aspect that is tempting to overlook, but this can have more of an impact than you might imagine. Not only can the right packaging impact shipping fees and material expenses, but it could also protect products from being damaged during transit. This can be quite the cost saver, especially if items are expensive to replace.
Fortunately, there are a few different ways to cut shipping costs by selecting the correct packaging. Firstly, the right size of packaging should be used. This means avoiding oversized bags and/or boxes and considering custom-sized boxes that can be adjusted to fit the product perfectly. Next, lightweight materials should be preferred as they will be less likely to increase the package’s weight, which would increase the shipping costs.
With the right size and materials used, you might need to think about cushioning and protection if your products are fragile. This will require you to find the balance between adequate protection and over-packing, though, so be sure to test different options before finalizing your decision.
To conclude, shipping costs can quickly build up, so it is only natural that you should want to cut them eventually. Thankfully, this post has listed three of the best tips that can help you do this successfully.
