How To Reduce Shipping Costs In Five Steps

Transportation is one of the largest industries in the entire world, encompassing everything from taxis to trains, trucks, airplanes, ocean-going ships and barges, and warehouses in every country on earth.

Even a minor delay anywhere along that chain can have major repercussions the world over. For example, shipping and transportation experts from Texas A&M recently calculated that traffic delays cost the U.S. economy three billion gallons of gas and more than $120 billion in 2011.

So how can a small business cut down on transportation costs?

Secure Refunds From Parcel Carriers: Don’t lose money you’re entitled to. The top carriers like FedEx and UPS guarantee every shipment their customers entrust to them, and yes, that means every shipment they handle, especially the late ones, and no matter the service level.

And unless teleportation is invented (and puts seven million Americans out of work), sometimes shipments will be delivered late. Unfortunately, not all small businesses have the resources or experience to secure refunds from parcel carriers every time; they might not even be aware of every late delivery. Keep a closer eye on your deliveries, or invest in a logistics service to audit freight bills and assist you when attempting to secure refunds from parcel carriers like FedEx.

Do your customers pay extra for overnight delivery? If not, then you’re just throwing money away. Alternatively, you can ask customers to pay less if they’re willing to wait until the truck fills up with other orders.

Is your shipping department a cost center or profit center? Some small businesses turn their shipping department into a profit center by adding a small shipping and handling charge as needed.

Shopping For The Best Freight Rate: Experts estimate that as many as 80% of shippers lose money simply because they didn’t conduct a thorough comparison of transit times and service options.

Don’t Get Stuck In Your Ways: Switching to electronic postage can reduce freight costs and save your customers 3% on average. No doubt you’ve tried to find the lowest fuel prices already, but even small expenses — like switching from Styrofoam to bubble-wrap — can cost big money in the long haul.

Shipping and transportation comes with enough headaches and delays, so try and keep surprise costs at a minimum with these five tips.