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WHITE PAPERS
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.
- Cost of shipping box (corrugated cost)
- Cost of packaging material (bubble rap, air bags, Styrofoam peanuts)
- Cost of printing labels (packing slips, shipping labels)
- 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.
- 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.
See "Tips on reducing shipping cost" white paper for tips on dealing with above issues
Environmental Costs
- Corrugated (shipment box) waste
- Packaging material waste
- Fuel usage / increased emissions