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What Are the Best Ways to Reduce Shipping Costs in 2022?

By: Emily Newton


Holiday Shipping Tips

Most online shoppers have gotten used to cheap or free shipping. At the same time, shipping costs are up worldwide, and experts believe they’re likely to rise further. This makes things challenging for companies and customers alike.

Businesses that ship to customers may already be feeling the effects of these changes. Fortunately, the right techniques can help minimize costs without sacrificing speed or quality of service. Companies that want to get the best deals on shipping expenses should employ the following strategies to get the most bang for their buck.

1. Choose the Right Carrier

Finding the right carrier can be an involved process. Different ones can quote various rates for the same package, and the quality of delivery services may impact brands. Companies that are not ultimately responsible for damaged or lost items can still lose customer trust when carriers fail to deliver.

Many carriers also offer perks and benefits for their customers. For example, four major carriers in the U.S. — UPS, USPS, FedEx and DHL — provide customers with free mailing materials, boxes, envelopes, labels and other kinds of packaging on request.

Smaller, more regional carriers may not offer these materials. As a result, they could be more expensive to work with than national brands, even if their shipping rates are usually cheaper.

Companies should ensure their choice of carrier has a good reputation. Those worth working with offer tracking services and insurance. Tracking services allow businesses and their customers to follow an item while in transit. Insurance isn’t always necessary but can provide peace of mind if a package is lost or damaged.

2. Consider Carriers’ Pricing and Delivery Services

Companies that need a fast carrier should discuss delivery speed before signing a contract. Not every one is prepared to handle the one- or two-day turnarounds promised by big companies like Amazon. Some customers are willing to accept slower deliveries in return for lower shipping costs, but others will want the fastest delivery possible. Businesses will find that surveying their client base or reviewing sales data can help them understand what people want.

Companies that want to minimize shipping costs should see if the carrier offers hybrid or last-mile delivery services, where it uses its own network and that of partners to deliver goods. Delivery with these services may be less predictable but will often be cheaper than standard shipping.

Before committing, companies should also ask about pricing structure and any surcharges they’ll be responsible for. Understanding how different carriers charge for shipping allows businesses to compare their prices and services accurately.

3. Optimize Packaging

How items are packaged can have a big impact on shipping costs. A bit of forethought and planning can make a huge difference in companies’ budgets.

Many major carriers follow a dimensional pricing model, meaning they charge based on the size and weight of a package. Lighter, smaller boxes will generally be cheaper — both in terms of shipping costs and the amount spent on packaging.

Properly sizing packages can also help prevent damage. Items in the right-sized box are less likely to slip or shift while in transit. Products may be more prone to damage while en route if there is a lot of empty space.

Companies can also update packaging to minimize returns. Snug and secure boxes will help ensure customers won’t need to return damaged items. Easy-to-open packages will improve the buyer’s experience and keep them from accidentally breaking purchases. Following a packaging design strategy with frustration-free guidelines can help businesses ensure their packaging is effective and leaves a good impression.

4. Use Shipping Automation Software

Technology can make managing every aspect of business shipping much easier. The right tool will allow companies to monitor their shipments, track returns and connect customer service with shipping information.

Customer service teams can use the software to quickly find a customer’s order and provide them with an update or more information. The software offers similar benefits when an item is returned or a damaged product must be replaced. Various strategies that improve reverse logistics can make managing returns cheaper and easier.

Some platforms make it possible to compare rates for each shipment, allowing companies to select the perfect carrier for each customer. These tools can make it easy to shrink shipping costs by picking the most cost-effective carrier for every shipment.

Many tools will also include bulk label printing and customization features that can accelerate the packaging and organizing of products ready to ship.

How Any Business Can Reduce Shipping Costs

The right techniques can help businesses manage rising costs and new customer expectations. Choice of carrier, packaging and shipping software can help reduce expenses and make shipping management much easier.

Reviewing packaging and adopting a tool that can compare carrier prices should help most businesses navigate the changing shipping market. They can save money, satisfy customers and earn a good reputation for being reliable and trustworthy in delivering products in one piece and on time.

Published: July 14, 2022

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