Total Cost of Parcel Shipping

Total Cost of Parcel 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 a parcel includes:

Labor Costs

• Time spent selecting the right size box for shipment.
• Time spent 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 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 wrap, air bags, styrofoam peanuts)
• Cost of printing labels (packing slips, shipping labels)

Shipping Costs

• Cost of shipping parcel/package
• Fuel surcharges
• Address correction
• Surcharges for package dimensions that do not meet the standards sizes listed by the carrier
• Dimensional weight charges apply for parcels with actual weight lesser than DIM weight (typically for light-weight, high volume, and low-density packages)

Environmental costs

• Corrugated (shipment box) waste
• Packaging material waste
• Fuel usage / increased emissions