Total Cost of Parcel Packaging and Shipping
Shipping costs are a non-value added cost of selling merchandise via web, catalog/mail order or phone. The shipping fees paid to carriers (FedEx/UPS/DHL/USPS) while being the most obvious and major component is not the only cost associated with shipping a parcel. Total cost of shipping an parcel includes:
Labor Costs
- Time spent selecting the right size box for shipment.
- Time spent in determining the right combination of boxes for shipments that cannot fit into a single box.
- Packing/loading order items into the box.
- Verifying all items have been packed/loaded into shipping box/boxes.
- Creating, printing and adding packing slips to shipping box/boxes.
- Adding packaging material to fill up the empty space.
- If all items don't fit into the selected box, box has to be emptied and items have to be reloaded into larger size box.
Material Costs
- Cost of shipping box (corrugated cost)
- Cost of packaging material (bubble rap, air bags, Styrofoam peanuts)
- Cost of printing labels (packing slips, shipping labels)
Shipment Costs
- Cost of shipping parcel/package.
- Fuel surcharges.
- Address correction.
- Surcharge for package dimensions that do not meet the standards sizes listed by the carrier.
- Dimensional weight charges apply for air and international shipments and for low density (lightweight shipments in large boxes) ground shipments.
Environmental Costs
- Corrugated (shipment box) waste
- Packaging material waste
- Fuel usage / increased emissions
Shopping Cart Abandonment
- Up to 35% of orders are abandoned due to shipping/handling cost and delivery time concerns, leading to loss of business, sometimes permanently, to competitors or other types of retailers.
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