Recently, Internet Retailer talked about UPS’s plans for peak pricing during the upcoming holiday season. Earlier on in the year, they highlighted the need for ecommerce sellers to diversify their shipping strategy. Just like in any other consumer based industry, etail sellers must remain flexible to changing market conditions in order to remain competitive. Shipping costs can be the difference between a business staying in the black, or going red.
Ecommerce sellers should evaluate changing costs and policies within the major shippers to find the right fit for their business. Here are a few of the recent policies being used at the three major U.S. shippers:
- UPS - 5% average price increase from 2014. Dimensional weight pricing (shipping rates based on package’s dimensions instead of weight). Peak pricing to offset increased costs during shipping surges. Fuel and residential surcharges. Expanding Access Point program (customer pick up locations).
- USPS - Actual weight pricing. No extra charges in most situations.
- FedEx - 5% average price increase from 2014. Dimensional weight pricing. Fuel and residential surcharges.
Sellers need to consider everything about shipping logistics. From the services being used, to the packaging that products are being delivered within. Not only does the packaging keep items safe during shipping, but it can now have an effect on shipping costs. Make sure that items are being packaged in material that is size and strength appropriate for what is actually being sent to customers. Don’t send a small item in a huge box!
Sources:
- Internet Retailer- “UPS will charge e-retailers that ship more parcels more than expected during the holidays”'
- Internet Retailer- “Diversifying Delivery”
- The Savvy Shipper- Rethink Your Shipping Carrier Infographic
Barbara E Anderson
Marketing Coordinator