Shipping cost: how to decrease it for small & medium businesses?

Low demand, high inflation, and a world trade slowdown are useful factors for cargo senders. In other words, they help optimize chain supplies. Cargo senders can use lower prices until they will be higher again. When it’ll happen, it can make small and medium business less profitable. One way of compensating for the expenditures is to increase delivery costs. But in this situation business is risky. Not all shoppers are ready to pay for both goods and delivery. And not all businesses are ready to offer free shipping. There are some effective tips to follow. 

  1. Use less packaging. Thus, more parcels can be placed on one pallet, and the transportation company will cut the shipping cost. On the other hand, you will use fewer package materials and send more parcels. Just send orders in original packaging to your customers. You will save resources and won’t pay for extra materials. 
  2. Think about shipping routes. Shipping cost depends on the destination. Take into account an alternative – services that cooperate with LTL deliveries on long distances. In this way, cargo can be delivered to your clients and the cost will be less than a full truckload. 
  3. Don’t forget about the delivery window extension. If you do, transportation companies will be more flexible. Their representatives can plan more effective economic routes. As for the short delivery window, it is both pleasant and unpleasant. The longer the window is, the fewer clients will be interested in the shipping location. So they will think about your company as about reliable partner. They also will respect you for such a nice delivery. 
  4. Third parties’ insurance. The clients ask to change the packaging if it is damaged. And you have a chance not to pay for it – use delivery insurance. Use the third party! Otherwise, each cargo carrier ensures it, and the shipping cost increases. If you cooperate with the shipping company, you face tariffs, argue if the parcel is lost or damaged, and wait for compensation. The third party will do it for you. As a result, you save time and money that you can spend to compensate for delivery expenditures.
  5.  Look at cargo carriers’ tariffs. Don’t be in a hurry to choose a cargo carrier. Try to understand which conditions are offered. When everything is arranged, confirm your cooperation in written form. The document signed by both sides is your guarantee. 
  6. Reform the item cost. If you try to reduce the shipping cost, maybe it’s time to add it to the item cost. It will make the process of pricing easier, especially for your customers. They will know the final sum of the order. As for business, they can offer free delivery, as it is included in the item cost. Statistics show that more than half of shoppers like buying goods with free delivery. 
  7. Choose the most suitable shipping mode. For example, the fastest way is full-truck load. But sometimes this way is not affordable. When the truck is not completed with the freight, you pay for air transportation. On the other hand, cargo will be delivered without additional loading and unloading operations, so there is a minimum risk of damage. Is it profitable for you, or is it better to start using LTL? There is also a shared truckload, so think about the advantages and disadvantages and choose the most suitable shipping mode.