Posted On May 5, 2023
The biggest misconception about small parcel shipping is that it’s easy.
With the rise of online shopping, it’s more important than ever to have a swift and dependable small package shipping system in place. As a small business or ecommerce seller, you don’t need to be reminded how crucial it is to have orders delivered in a timely manner. However, knowing how to build the most cost-effective strategy can be overwhelming with so many options available.
This blog post will guide you through the maze of small parcel shipping and assist you in making informed decisions that will propel your company forward. Whether you’re just starting or looking to optimize your shipping strategy, we’ve got you covered.
Understanding small parcel shipping
Because “small” is a relative term, many shippers don’t realize that they’re shipping parcels.
Small parcel shipping refers to transporting packages less than 150 pounds in weight and less than 108 inches in length and girth combined. These small packages are usually sent through major carriers such as FedEx, UPS, USPS, DHL and OSM.
Each carrier offers different small package shipping services and has different strengths and weaknesses. For example, FedEx and UPS are known for expedited shipping, USPS for its ability to deliver to rural and residential areas, and DHL for shipping internationally.
Having a clear understanding of your small parcel shipping needs is crucial for creating an effective plan that meets your business’s current and future needs. However, with so many options available, choosing the suitable small parcel carrier, service and packaging can feel daunting when wearing multiple hats. It’s important to remember that every aspect of your shipping plan can impact the cost. By carefully evaluating options, you can ensure your business gets the best value for its shipping expenses and can ultimately improve your bottom line.
Get supply chain news in 2 Minutes Flat. Sign up to get parcel-sized industry updates sent to your inbox once a week.
How to optimize your small package shipping strategy
Companies can maximize their savings on small parcel shipping costs in several ways.
Pick the right service
The first place to start is to ensure you’re using the correct service. Too often, shippers believe they’re using the most appropriate service for their needs, when there’s actually a better option.
Imagine shipping something from St. Louis, Missouri, to O’Fallon, Illinois (less than 100 miles away). The shipment needs to arrive the next day. You might think same-day delivery or overnight shipping are your only options and spend around $20 to get the parcel out. But actually, ground shipping will still get it there just as quickly for a fraction of the cost. The only difference is the guarantee.
Knowing the ins and outs of shipping zones and what carriers can accomplish within their range of services can make a huge difference in your costs.
Get a better deal on your contract
Next, don’t be afraid to negotiate your contracted rates. When you sign up with a carrier, you assume you’re getting the most competitive rates possible. However, as time passes, the general rate increase (GRI) and extra fees start creeping up.
Many businesses don’t realize that some of the accessorial fees on their invoice can be negotiated, such as residential fees, delivery area surcharges (DAS), additional handling fees because of weight limits, fuel costs and dimensional weight (also called DIM weight).
The more volume you’re shipping, the more leverage you’ll have in negotiation. For smaller-volume shippers, working with a third-party logistics partner who has already negotiated rates with carriers can solve this issue.
Want to see how much you could be saving on your parcel shipments? Get an immediate estimate with the Flat World Parcel Savings Estimator.
Find the right fit
Sometimes, it’s not just the carrier or service that is affecting the price but how the shipment is packaged.
Shrinking packaging is another excellent strategy to reduce carriers’ handling fees. Proper packaging reduces the risk of damage during transit, but sending a large box for a small product adds even more costs. No shipper wants to pay extra just to ship air. Opting for a lightweight box and optimizing the packaging design to minimize the needed space can reduce the weight and dimensions of packages and, in turn, the costs.
Stay on top of surcharges
Managing peak shipping times and avoiding surcharges is another smart way to amplify savings. Many carriers charge higher shipping rates during peak times around the holiday season. Businesses can save money by planning ahead and shipping packages before or after peak times. Also, some carriers levy surcharges for specific destinations. It’s essential to be aware of these surcharges so you can avoid them when possible.
Quickly shop around with multi-carrier shipping software
Finally, consider using multi-carrier shipping software for your rate shopping. A parcel shipping platform like Pipeline allows shippers to easily find the most cost-effective option for each shipment by comparing multiple carriers and services within seconds. This saves money and frees up more time since you won’t have to visit each carrier’s site to calculate an estimate for every shipment.
Stay in the loop in 2 Minutes Flat. Get weekly logistics news delivered to your inbox.
Speeding up small parcel delivery times
Speed is the name of the game when it comes to small parcel shipping. In today’s fast-paced world, customers expect their packages to arrive quickly, and a slow delivery can lead to dissatisfaction and even lost business. As a small business or e-commerce company, finding ways to speed up your delivery times and meet your customers’ expectations is vital.
Take a look at your regularly scheduled pickup time. If it’s always at noon, it’s adding extra time to your order fulfillment and delivery time. For example, if a customer orders at 1 PM, you now have to wait a whole day—until noon the next day—for the package to ship.
But pickup times are also negotiable. By pushing your shipping carriers to get the latest time possible, you can streamline your order in/order out process and get your packages out the door faster.
When it comes to small package shipments, fast delivery is essential for keeping your customers happy and your business growing. Optimizing your pickup times and shipping processes allows you to stay competitive and meet the demands of your customers.
Advantages of a third-party logistics company for small parcel shipping
Partnering with a third-party logistics company can bring a wide range of benefits. Since a 3PL specializes in freight shipping, logistics and supply chain management, it can help small companies streamline their small package shipping operations and improve their overall efficiency.
One of the most significant advantages of working with a 3PL is the cost savings it can provide for your small parcel shipments. With established relationships and negotiated prices with shipping carriers, a 3PL can often secure lower rates and discounts that you usually wouldn’t receive on your own. Plus, their experts can handle complex logistics tasks, such as customs clearance and compliance with international trade regulations, freeing you from the burden of international shipping.
Another advantage of working with a 3PL company is the increased efficiency and accuracy it can provide with technology. A third-party service can analyze your shipping data and identify areas to improve, often delivering an average savings of 10-20% on parcel costs.
As your company grows and expands, it’s crucial to have a strategy to keep up. Partnering with an experienced 3PL like Flat World Global Solutions can save on your parcel spending and streamline your logistics operations. Contact us to get started.