Top 3 Tips for Small Businesses to Start Saving Big on Shipping & Transportation

Shipping and transportation can be a major expense category for a small business. Today’s consumers are accustomed to quick (often “free” to them) delivery and keeping up with the necessary shipping options to meet expectations and balance the budget can take a heavy toll on your time and the bottom line. For small businesses looking for opportunities to grow profit margins, we’re sharing the top three tips to help shore up shipping and transportation budgets.

Tip #1: Understand the Factors that Impact Shipping Costs
A lot of factors go into determining how much it costs to ship an item. Understanding what each one means and how the selections you make can impact the final cost can help you navigate choices that lead to big savings.

  • Speed & Destination
    Today consumers expect speed, but priority options with high price tags aren’t always going to arrive significantly faster than their lower priced counterparts. Knowing the zones you commonly ship to and factoring those into decisions on the options selected can have a big impact. For instance, the example below shows how a company could have selected to ship UPS Ground instead of a 2-Day Air shipment in the same zone. In addition to arriving 30 minutes earlier compared to the air package, the ground package cost $100 less versus the air premium.
    Will insert a similar table as was used in the whitepaper. Not exactly sure where you ship the most? We can help. With just a bit of information and access to your shipping accounts with the top providers, our team can create a custom shipping data dashboard that will allow you to easily spot your shipping trends.

chart illustrating two package service path options and related costs/savings

  • Added Services
    Added options like insurance, packaging, tracking or signature upon receipt can add up. Considering when they’re important and when they could be skipped can help drive savings gains.
  • Weight and Dimension
    Accurately calculating the dimensional weight (dim weight) of your package and classifying shipments correctly can result in big savings for your company. Improper measurements or calculated changes from your carriers during the shipping process could lead to significantly higher fees. For example, let’s look at a box with a volume of 27” by 16” by 13” with an actual weight of seven pounds. The application of an improper dim weight (in this case a divider of 139 when it should have been 194) resulted in a 12-pound difference in rated weight and a nearly $20 overcharge for the shipment. Now imagine multiplying this error across multiple packages and shipments and you can start to see the overcharges and potential savings piling up quickly.

chart illustrating the impact of an improper dim divisor and related savings

  • Shipping Volume
    Are you shipping enough to get discounts from carriers? The answer may surprise you. If you’ve increased shipping in 2020 and/or your business is growing, it might be time to start shipping contract negotiations.

Tip #2: Ask Questions to Help Determine the Most Effective Shipping Selections
To help map out the right options, consider the following questions when you’re preparing a package.

  • When does the package need to arrive?
  • Is a guaranteed delivery or delivery commitment required?
  • Is tracking required?
  • Is the recipient address commercial or residential?
  • Is signature confirmation or any other service add-on required?
  • Are you shipping alcohol, other specialized products, or any hazardous materials?

It can also be helpful to take a look at your 2020 shipping data and conduct a shipping audit to spot trends and areas to fine-tune your strategy. If you think slogging through that data sounds painful – we can help – our industry-leading shipping auditing tools can put your data at your fingertips so you can more easily spot opportunities to save.

Tip #3: Know Your Carriers
What carrier is best for small business? The answer may be all of them, but for different solutions and different circumstances. Knowing where you can capture the highest level of value from each is an important step in stopping unnecessary funds from going down the transportation drain.

  • United States Postal Service (USPS)
    Solutions like the Priority Mail Starter Kit (available when you setup a PO Box), Click-N-Ship (for those fulfilling orders in-house who prefer to purchase and print labels online) and Home Pickup (for when it may not make sense to make frequent trips to the post office) each provide benefits that may or may not be a fit for the way you ship.
  • FedEx
    FedEx Small Business offers a range of small business benefits and tools such as the Packaging Help Hub that can assist with key shipping steps like calculating the proper dim weight.
  • UPS
    UPS Small Business services offer resources that allow small businesses to schedule pickups and more easily manage customer returns.

Want to Start Saving on Shipping but Don’t Know Where to Start?
We can help. Making small changes in the way you ship can result in big savings for your small business. At Shipment Trackers, we can help expand your shipping expertise without adding bulk to your budget. Plus, when you partner with Shipment Trackers, there is no long-term contract and there’s no fee unless we find savings for you.

If you’re looking for ways to increase your profit margins, get in touch. Our team of shipping specialists can take a look at the ways you ship and offer insights to help you find and recover lost revenue. Get in touch to learn more and start a conversation. We look forward to learning about your business.