Is your business looking to reduce parcel costs? Then you aren’t alone. Lower fuel prices have been a boon to many sectors of the economy in 2015, especially industries related to transportation and shipping. But that’s often not enough to cut down on shipping costs. So here are five strategies for lowering parcel prices:
Can You Go Paperless?
Many tech futurists assumed that we would be living in a paperless world by 2015, to say nothing of those hoverboards we were promised. In reality, many people who work in the transportation and shipping industry often feel like they’re drowning in paperwork. But going paperless can save your company money in two ways. First, switching to a paperless system can save time and increase efficiency, helping to reduce costly human error in the process. Plus, using electronic postage through carriers’ websites can lower parcel price as well. For instance, USPS customers get an average 3% price cut when buying postage online, and customers taking advantage of Priority Mail save 3.5% on average.
Think Carefully About Packaging
If you ship regularly with big carriers like UPS and FedEx, make sure you use the provided packaging whenever possible. Even if that means slipping your own boxes and packages inside the UPS envelopes. Otherwise, you could rack up extra charges for irregular package sizes.
Third Party Logistics Software
There are a variety of 3PL software that shipping companies of all sizes use to lower parcel price. There’s software for managing transportation claims, freight auditing, and cloud-based integrated transportation management software to better handle logistics at all levels. And according to the 18th Annual Third Party Logistics Study from 2014, a strong majority of shippers had a positive impression of 3PL software. Not only that, but shippers utilizing such software reported average inventory cost reductions of 6%. They also reported fixed logistics cost reductions of 23% on average.
Shop for Better Freight Rates
Could a regional carrier offer you more competitive delivery costs, thus helping to lower parcel price? Or perhaps you could negotiate better rates by switching all your business to a single carrier? Ultimately, companies that fail to regularly compare freight rates will get left in the dust. Best of all, you can use our software to shop freight rates instantly with the push of a button.
Remember: an estimated 80% of shippers overpay simply because they fail to compare service levels and/or transit times regularly.
Pass Shipping Costs to Your Customers
Finally, many companies choose to lower parcel price by passing on some of the cost to their customers. But this strategy requires a delicate balance. Increase shipping fees too much, too fast, and you could end up bleeding business. But take on too much of the cost yourself, and you could still end up losing money. One possible solution? Reduce shipping costs for extended delivery times, but increase fees for priority delivery.