Reduce shipping costs without renegotiating carrier rates

Many people, from consumers to corporate executives, associate “shipping costs” with “carrier rates” and think of the two interchangeably. However, they are not, and in this blog post we’ll discuss how you can reduce your shipping costs, even in the face of rising carrier rates. Read on to learn more about:

• Other components of shipping costs unrelated to carrier rates
• Mechanisms for reducing those costs despite carrier rates staying high
• Tools you can use to take control of shipping costs in any environment

When many people think of “cost of shipping” they think of dropping off a package at a shipping location and paying a fee to the carrier (UPS, FedEx, the USPS, etc.), including any extras (like rush delivery). But when shipping at scale, the overall costs of shipping extend well beyond that. This is, in many ways, good news! Why? Because it means it’s possible to take control of shipping costs even without negotiating for lower carrier rates. This is especially important when cost-cutting is top of mind, but many carrier rates continue increasing.

Other components

Consider for a moment everything that goes into shipping: The labor required to pack and label goods, then tender them to carriers. The packaging itself. The fines and penalties resulting from likely preventable errors:

• Labor: The more efficiently your workforce can pack and ship goods, the lower those labor costs will be. Every minute not spent guessing what boxes to use, not comparing rates via multiple carrier portals, and not trying to double check label & paperwork accuracy is a reduction in the total cost of shipping goods.
• Packaging: Packaging can be a veritable guessing game, particularly when there are multiple items going in a single order, or multiple orders going to the same customer. The more efficiently you can pack, the less packaging used, and the less money spent on all things packaging.
• Fines & Penalties: Even if you double and triple check each item, label, and packing slip, there is still room for error. Sometimes substantial error. When that’s true, trading partners, carriers, and even regulators can impose substantial financial penalties.

Cost reduction mechanisms

The additional components of shipping costs are largely related to making efficient use of time and resources. But there are other ways of reducing overall shipping costs without altering your contracted rates:

• Carrier Network: The bigger the carrier network, the more options you have. Just because one carrier has increased its rates doesn’t mean that you can’t find a better rate from a different one.
• Mode Selection: The same goes for mode selection, too. Sometimes an alternate mode will be more cost efficient, even if it isn’t the first that comes to mind.
• Quoting Accuracy: Though not a direct “cost” of shipping, the more accurately you can quote a carrier’s rate for a shipment to your customer, the less likely you are to under or overestimate what you charge that customer for shipping.

Tools to use

There are a number of tools out there that can help you take advantage of all of these cost-reducing mechanisms. Many will be part of a comprehensive shipping software suite, like Descartes Pacejet Shipping, as either core capabilities or add-ons, such as:

• Scan Packing: Less time (labor) and far greater accuracy (penalties) than any other method of packing (such as typed entries or mouse clicks).
• Predictive Packing: Box and pallet selection recommendations in a fraction of the time, in addition to far more accurate quoting.
• Dimensional Weighting: Calculating a shipment’s dimensional weight provides a far more accurate cost estimate than just using weight alone.
• Retail Compliance: Say goodbye to retailer chargebacks when using retail compliance automation features to print compliant documents & labels together (with or without integrating EDI solutions).

In many circumstances, you will have little ability to negotiate your contracted carrier rates down. However, that doesn’t mean you can’t use other methods of lowering shipping costs – methods where you have far more control over the outcomes. Finding ways to reduce costs associated labor, packaging, and penalties are easy with the right tools. Similarly, the best way to deal with one carrier’s rate increases may be to comparison shop across other carriers and/or modes. Tools to do this, and take control of your shipping, are some of the many reasons to explore Descartes Pacejet Shipping, and the entire Descartes Pacejet product suite.