How Businesses Can Reduce Shipping Costs

High shipping costs can put a burden on businesses new and old

Shipping costs can stifle growth in up-and-coming businesses, and yet it can seem like an insurmountable challenge if you don’t have the right tools and tactics to hand.

To help you out, here are some hints on how to drive down shipping-related expenses, and unshackle your fledgling firm so it can soar high.

Optimize delivery routes

One of the biggest costs associated with shipping comes from last mile delivery, and through the use of route optimization software you can bring this under control.

There are lots of reasons to optimize routes, not least because it will save on fuel and reduce the pressures that vehicle maintenance puts on your fleet management schedule.

For example, with optimal route planning available on the fly, drivers can avoid congestion, take the most efficient path to each drop-off point and thus squeeze in more deliveries over the course of a shift. This kind of efficiency will go a long way to making your shipping budget more manageable.

Minimize package weight

The lighter your packages, the less fuel is needed to get them to their destinations. And whether you are handling the shipping in-house or outsourcing this to a third party provider, weight matters a lot.

So how can you reduce the heft of the goodies you ship out? Lighter, eco-friendly packaging materials like corrugated cardboard and air pillows can help. Likewise if you reduce the dimensions of the box to reduce the amount of material needed, this will also make a cumulative difference to shipping costs.

Also reappraise whether or not you need a box at all; if a product can be shipped safely in a padded envelope instead, this will be more affordable.

Reduce the number of regions you serve

It might sound counterintuitive from a business growth perspective, but it can be helpful to reign in your shipping ambitions and only offer delivery to customers within a smaller geographic area, at least for the short term.

The longer a package has to travel, the more it will cost to ship, and if your budget is tight then limiting the locations from which customers can request shipping will take the sting out of this aspect of your operations.

Consider prepaid deals

Lots of carriers will offer discounts to business customers that are willing to pay for a certain number of shipping slots upfront.

This bulk-buying approach might seem like a bit of a gamble, but the good news is that you do not need to use it up all in one go, and can instead eke out the deal over the course of weeks, months or even years. So you are not over-committing based on the assumption that sales will skyrocket, only to be left with unfilled shipping capacity.

Play the field

There are a multitude of shipping carriers out there, and this creates a competitive marketplace in which business clients can enjoy a degree of flexibility when negotiating prices for packages.

As well as comparing the pricing from a range of brands, be sure to speak to representatives and see whether they can give you a discount on the advertised price. You might not always get it, but there is no harm in trying, and if they won’t budge, look elsewhere to find a better bargain.

Lastly, don’t go all-in on a shipping agreement with a third party without seeing if certain optional extras can be taken out of the equation to reduce the cost to you. For example, you might want to get insurance for your packages from a separate provider, which will bring down what you have to pay to the carrier.