Small businesses have to keep a sharp eye on costs in order to stay competitive and one key area that makes up a healthy percentage of costs is shipping.

Many companies overlook some key areas that can save them considerable money.

So we compiled the top 5 ways to reduce shipping costs to help your business come out on top.


Holiday Ecommerce

The first two things we will discuss that can help reduce shipping cost require working directly with a carrier. The last 3 ways we discuss have to do with changing the way you do things in your everyday operations.

1 way: Evaluate Carrier Performance

This involves tracking your carriers’ services and associated costs. Service tracking would include pickup, delivery, customer inquiry response, online data accuracy, and promptness. Cost tracking would include any fees associated with any of the services mentioned above.

Take the necessary time tracking this information to confirm areas that need to be addressed. You can then take the information straight to the carrier to help address any lapses in service or cost concerns. Furthermore, it helps to conduct a yearly competitive quote request from some of the top freight carriers. This way you can make sure that you’re consistently getting the best rates because they’re competing for your ecommerce business.

2 way: Match Requirements with Carrier Offerings

You can use the information you gathered from the above recommendation and talk to the small business specialist at the carrier. Use the information to match the carrier’s services with the requirements for your business.

Businesses that don’t work with their carrier to map out and match their needs to the carrier’s offerings can be spending up to 40% more in fees then businesses that perform this step. For example, there may be some services that fit well within the context of your business that you can implement without compromising on the quality of your shipments.

3 way: Shipment Management

Better management of shipments can lead to better pricing and fewer fees. Shipments that are “less than truckload” are less cost effective than possibly working with a freight consolidation company, which combines shipments to create a full truckload. Less than truckload rates are usually much higher than other rates.

This is at least worth looking into for efficiency and cost management. And if consolidation isn’t an option, take a look at freight optimization and broker organizations. These companies specialize in reducing your rates, and only get paid if they’re able to actualize a rate reduction for your business. They take a small percentage of the cost savings that they generate for you, so it offers a low risk way to reduce costs. These types of companies are able to help in most cases.

4 way: Look into Using a Postage Meter

When you don’t use a postage meter, you tend to put on more postage than is required just to “be safe.” The benefit of a postage meter is that it calculates “exact” postage so that you’re not paying more than necessary.

It saves time and money required to go to the carrier to be weighed and have postage printed there. Eliminating over-postage is easier and more cost efficient than most people think. And some postage solutions these days offer online services with integration to your other systems, so that you can streamline operations and process shipments quickly and easily.

5 way: Establish Charge-back Policies that Encompass Return Shipping

By establishing charge-back policies that let your customers know when they will be required to cover return shipping you share some of the costs with your customers depending on the situation. Once these policies are in place, communicate these policies to your sales staff or whoever has contact with your customers to ensure the guidelines are known.

Some of these methods may translate into more savings than others depending on the business utilizing them. Many different factors affect the cost of shipping methods. Using these methods you should be able to reduce your shipping costs effectively.

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Guest blog written by Sam Souvall, President of Anchor 3PL, a full scale 3PL company based in Utah.

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