Ways To Reduce Parcel Freight Costs- For Ecommerce and direct selling businesses, it is essential to keep fulfillments costs to a minimum so that more profit can be generated. The most significant expense is the parcel freight costs accounting for 75% of the total fulfillment costs. Businesses often think that they can’t influence these costs, but they are wrong.

Within the realm of parcel freight costs, you can do a lot to save costs and maximize your profits.

Ways To Reduce Parcel Freight Costs:

We will discuss six ways in which manufacturers can reduce their freight costs.

• Leverage Carriers For Final Mile Delivery:

Are you shipping to homes using the prominent carriers of the industry? If so, then you are likely paying residential delivery surcharges in addition to your standard shipping costs.

You can use the postal service to avoid these costs for the final mile delivery. This will save you a good amount of money. If you don’t want to skip your regular carriers, you can use the postal service for the last mile.

In this way, you can save up to 30-40% of the total delivery expense. You will save around 3-4 dollars per shipment by reducing your residential surcharges.

• Leverage A Presort Service:

Let’s say that your company is shipping low-weight items through expedited shipping. You will probably take multiple price quotes from carriers. You will also compare them and pick the best rate, then deliver your packages to that chosen carrier.

There is another low-cost option that you can avail of. If you opt for the USPS’s priority mail service and deliver packages to USPS presorted, you can reduce your shipping costs. You will still get your items delivered within 2-3 days. Presorting your packages means you are grouping them by zip codes. So, you get a lower price for sorted parcels.

• Utilize Zone Skipping:

Parcel carriers decide on the price point by calculating the miles or zones a package travels through. With zone skipping, shippers sort parcel shipments and arrange a mode of transport for them to the same destination.

For instance, you have thirty packages sent from Chicago to New York. It will be relatively inexpensive to ship them to a central zone in New York. From there, the parcels can be sent via last-mile delivery.  

In this way, you can save 10-15% depending on the density of the line haul.

• Improve Your Packaging:

When you want to reduce your parcel freight costs, you need to focus on packaging quality. Some valuable tips regarding packaging include:

• Packaging in the correct size: Dimensional weight is used to determine the price nowadays, so package it accordingly.
• Invest in good quality packaging: This will save you money in the long run by protecting your parcels from damage.

• Leverage A 3PL For Discounts:

One of the best ways to reduce parcel freight rates is partnering with a 3PL that deals with big and small companies. Some 3Pls offer discounts ranging from 10-40% for heavier parcels. Lower discounts are offered for lighter packages. This helps small companies move up the food chain and get rates similar to big companies.

• The Right Address: 

Undelivered packages are a significant cost for your company. You have to pay for the return postage and reshipping as well. So, you must write the correct address on parcels every time.

Often with addresses, little details are overlooked, like apartment and unit numbers or phone numbers. If a single point is missed, the package is not delivered.

Conclusion:

Parcel freight costs are a significant expense for manufacturers. But it is an expense that you can reduce with the right strategies on your side. We hope the tips we provided may help you reduce your parcel shipping costs and enhance your revenue. For freight-related services, you can visit Gillson Solutions.