Five Tips for Lowering Shipping Costs

May 01, 2007 9:30 PM  By

Ensuring that you do not overpay on your small-package shipments can seem like a monumental task. Carriers such as FedEx, United Parcel Service, and DHL charge significantly more for residential shipments. Using the U.S. Postal Service is often a less expensive option, but delivery can take significantly longer, with fewer tracking options. Commercial shipments are less expensive than residential shipments but can incur additional costs via surcharges. With all that in mind, here are five tips for lowering your transportation spend.

  1. Ask for discounts

    If you are shipping packages via FedEx, UPS, or DHL, work with your account representative to ensure that you are getting the best discount program possible. Just about all shippers, regardless of size, are eligible for some level of shipping discounts, but you’ll need to ask in order to receive a specialized pricing program.

  2. Consider alternative shipping options

    If cost is a bigger factor than delivery time for your residential shipments, then zone-skipping may be a better option for you. A carrier will sort your packages and haul them to the closest post office, with the Postal Service delivering the package to its final destination. This strategy can improve your delivery time over that of standard USPS delivery at a cost that is less than standard FedEx, UPS, or DHL residential shipping.

    And even if your shipment is time sensitive, check if it actually requires express shipping, as many ground delivery times are faster than you may realize.

  3. Use hundredweight pricing when appropriate

    Shipments of multiple packages to a single location may be eligible for hundredweight (also known as multiweight) pricing. Under hundredweight pricing, multiple packages being shipped to the same destination are rated as a shipment at a rate per pound instead of per package (unless the per package rate is cheaper). Express shipments greater than 100 lbs. and ground shipments exceeding 150 lbs. are eligible for hundredweight pricing.

    Express hundredweight shipments will automatically receive this pricing, but your account must be set up with special pricing for ground shipments to receive it.

  4. Manage your surcharges

    Surcharges can significantly increase your shipping costs, and it is up to you to monitor them. Note that certain surcharges are higher for residential packages and are incurred in addition to the standard residential and fuel surcharges. Address correction charges can be especially costly at $5 per package for ground shipments and $10 per package for express shipments. Lightweight shipments in larger boxes, such as clothing, are often subject to dimensional weight charges, which take package dimensions as well as weight into account. Additional handling charges can also be incurred if package dimensions do not meet the standards outlined in the shipping tariff.

  5. Consider using one provider for all shipments

    DHL, FedEx, and UPS often offer increased incentives based on shipping revenue or volume. These are in addition to base discounts and are meant to encourage customers to use one provider for all their shipping needs. These earned discounts can be more difficult for seasonal shippers to achieve, so if you are a seasonal shipper, you should discuss your situation with your account representative to ensure that an adequate earned discount program is designed for you.

Colleen Paulson is a Pittsburgh-based consultant and writer.