Strategies to Save on Shipping Costs

Regardless of what you may have convinced your customers to believe, there is no such thing as “free shipping.” Someone has to pay for it. But there are ways you can lower your shipping costs, especially right now.

If you haven’t already investigated employing a consolidator to handle your shipments, now is the moment. By outsourcing your final sortation to a “zone skipper,” you can push your shipping costs down by as much as 15%.

If you are using parcel companies for your shipments, now is the time to open discussions with them to see what they will do to acquire, or keep your business. With crude oil down significantly from a year ago, fuel surcharges have been suspended for now, and you may be pleasantly surprised to learn what your shippers are willing to do for you.

Perishables direct marketer Dakin Farm, which specializes in Vermont-themed foods, went into the holiday season with an advantage this past year, according to owner Sam Cutting.

“Before our peak season hit, one of our shippers came to me with an offer to help solve my inability to fulfill last-minute orders, in exchange for a chance to prove their reliability with express orders,” he says.

The shipper agreed to take 5,000 of Dakin Farm’s fastest-moving gift boxes —6 SKUs total—on a prepack basis, and store them in a refrigerated trailer, parked at its hub. “All we had to do was sweep the system at 3:00 p.m. daily for these 6 SKUs and e-mail the orders to the shipper,” Cutting says.

This allowed Dakin Farm to continue promising timely delivery well past its usual shut-off date, he says, “and all of the customers that ordered later than our old deadline were served.”

The parcel shipper literally acted as a mini third-party logistics provider for Ferrisburgh, VT-based Dakin Farm “at a time when we could not have met the demand,” Cutting says.

What did the courier get out of the deal? “They have since been awarded the majority of my express business,” he adds.

Stephen B. Harris is vice president, construction and real estate, for management consulting firm The Beacon Group.