Over the years, the methods and modes of shipping have evolved drastically. The delivery of goods from the source location to the predefined destination has been an essential element in the success and expansion of businesses for decades, becoming a fundamental component of all kinds of commerce and trade. In ancient history, there were various methods of sending messages by hand, including runners and homing pigeons, even riders on horseback. Even Biblical accounts record the delivery of messages via courier, and the ancient Greeks and Romans introduced the use of horses and chariots to send urgent correspondence.
As time has progressed, the methods have indeed improved and been enhanced. As the industrial revolution sped up the speed of development and various new forms of transportation emerged, steam trains carried supplies, and horse-drawn vehicles took products to the end customer. The world has become smaller in many ways as innovations in technology and transport revolutionized the way that countries could connect and trade. From cargo ships to aircraft, from armored cars to flatbed trucks, there are more ways than ever to take goods to the people who need them. In less hospitable areas, snowmobiles and dog sleds take products to the most remote places. Today, there are even plans to involve delivery drones in the fulfillment of customer orders, taking the delivery game to (literally!) new heights.
The Rising Prices of Shipping
However, as convenient as delivery methods have become, they are also becoming more regulated and, in many respects, more expensive. As a business, you likely rely on some form of shipping arrangement, yet in the current economic crisis, you may be struggling to pay for the growing bills. When looking at ways to cut your costs, widen your margins and improve your profits, it takes to time to see areas where you can save yourself some pennies. You may feel like shipping costs are a non-negotiable necessity, however, there are a surprising number of factors that will affect your shipping costs. These effects are often underestimated by shippers so it’s worth knowing more about what’s upping your expenses so you can make any possible changes to save your precious funds. All of the jargon and red tape around shipping can be confusing, to say the least, so let’s dig into the topic now to clear up a few things with the hope of helping you save some money.
The Three Main Factors Affecting Your Shipping Costs
There are three main factors that are going to be making your shipping costs go up: dimensional weight, shipping dimensions resulting in additional handling surcharges, and surcharges based on oversized items. We will consider each of these factors in more detail, before considering what action you can take to lower your costs and save yourself some money.
Dimensional (or DIM) Weight
The dimensional weight of a package is different from the actual weight of a package. This weight is related to the amount of space that an item will take up, as opposed to its physical heaviness of it. The formula used to calculate this weight involves multiplying the length, weight, and height together and dividing the sum by the DIM divisor. The DIM divisor is different depending on the shipping provider so if you can find this from your supplier, you will be able to calculate the DIM weight. Now, once you have the physical weight and the DIM weight, the shipping provider will choose the greater of the two to determine the billable weight of the item. This factor means that it is essential to choose the correct packing for your items in order to get a lower DIM weight and a better price.
Additional Handling Surcharges Due to Dimensions
The dimensions of your package can trigger an additional handling surcharge. If due to the dimensions of an item it requires extra handling, there will an extra charge to ship these packages. If the longest side is more than 48 inches, the second longest side is more than 30 inches, or the weight is more than 50 pounds, a surcharge will be added that will put your shipping bill up considerably.
Surcharges for Oversized/Large Package
Again, a surcharge could be the factor that tips your shipping cost into the overly expensive. An oversize/large surcharge is very significant, to the point it could be around 100 to 200 dollars for a package that incurs this surcharge. The good news with surcharges is that you won’t be charged for both oversized and additional handling on the same shipment, only the highest figures of the two.
Now that you have discovered the truth about your rising shipping expenses, is it a lost cause? Is it possible to do anything about it?
What You Can Do To Lower Your Shipping Costs
You can’t do much about what you sell, but you can do something about how you ship it in order to bring down the shipping expenses.
- Fight incorrect charges. Don’t just accept your carrier invoices without double-checking them. If you spot any unexpected or incorrect charges, fight them. In some cases, your carrier may determine a package’s weight or DIM incorrectly, and these could add up to costly mistakes.
- Use the right packaging. Make sure you use the most effective and efficient packaging. Train packaging staff on how to use the right amount of packaging that will protect your item, but not too much packaging that will result in surcharges and higher DIM weights.
- Take control of your data. Use some software tools to analyze your shipping data to ensure you aren’t paying more than you need to and to pick up on any inefficiencies you could work on to save yourself some money.
While shipping may be a complicated expense, there are things you can do to make it cheaper and use your valuable resources in something more profitable for the success and future of your business. With a little more research, you’re likely to find many more ways to save yourself money even in this time of inflation and financial instability.