Reducing Packaging and Shipping Cost
While costs of packaging shipping orders cannot be eliminated, they can be reduced and managed by aggressively re-evaluating and optimizing the whole shipping process.
Negotiate to get Discount Shipping Rate
- You are not too small to get a discount: Work with your FedEx, UPS, or DHL representative to get the best discount possible. Carriers will give discount over their standard rates even for customers with low shipment volume
- Get even a bigger discount: Designate one carrier as the primary carrier to get volume shipment discount on top of your existing negotiated rate.
Reduce Surcharges
- Use standard size boxes: Only use shipping boxes that are standard size. Consider splitting orders into multiple boxes if using one oversize box results in surcharges that exceed the cost of shipping order in 2 boxes
- Do not exceed Max weight: Make sure total weight per box does not exceed maximum weight
- Eliminate wrong address penalty: Use carrier provided online tools to verify shipping address
Dimensional Weight Pricing
- Actual weight or Dimensional weight pricing: Carriers charge larger of dimensional weight or actual weight for packages that are large in size but light in weight. If the shipping box/parcel size falls into dimensional weight category, it maybe cheaper to ship the items in multiple boxes rather then in a single large box.
Use Hundredweight Pricing
- Cheaper of per package or per pound pricing: If shipping multiple packages to same location and total shipment weight is greater than 100lbs for air or 150lbs for ground shipment, setup your FedEx/UPS/DHL account to receive hundredweight pricing. With hundredweight pricing you will be charged lesser of per package or per pound shipping cost.
Reduce Shopping Cart Abandonment
- Accurate shipping/handling cost and delivery time: Reduces chances of customer abandoning an order due to overestimated shipping charges and delivery time by using tools to provide accurate shipping cost and delivery time.
Order Shipment Cost Optimization (OSCO) Software, from Mozula Technologies, creates shipping solutions that reduce packaging and shipping costs identified above.
OSCO Generates Solutions to:
- Automate shipping carton selection and manifest generation to reduce labor costs
- Optimize shipping carton selection to reduce shipping costs and corrugated costs
- Obtain exact shipping rate quote at time of order placement by using OSCO in conjunction with tools provided by carriers to get shipping rate quote and delivery time estimate
- Enforce weight restrictions and avoid using oversized boxes to reduce overweight/oversize parcel charges
- Reduce dimensional weight to lower shipping cost for packages charged with shipping rate based on dimensional weight
See "Lean Parcel Shipping with Order Shipment Cost Optimization Software (OSCO)" white paper on how OSCO can be used to lower shipping and packaging costs.