It’s about to become increasingly costly for retailers to offer free shipping to shoppers.
The United States Postal Service (USPS) is set to hike its prices for shipping commercial packages for large volume customers by an average of 9.5% on Jan. 17, while United Parcel Service (UPS) and FedEx already raised their rates for certain services including ground—which e-commerce sites commonly offer for free when consumers spend above a certain amount.
Pitney Bowes on Thursday noted that these increases, in addition to “exploding parcel volumes” and “the complexity of managing multiple disparate carrier rate structures and systems,” has prompted small retailers and e-tailers to seek out innovative solutions to optimize their shipping operations.
“In this new world of commerce, shipping has become even more critical as businesses compete for and serve clients remotely and connect with their vendors and suppliers,” Jeff Crouse, vice president of the technology company, said. “However, small and medium businesses in particular face an uphill challenge to manage rising costs, increasing complexity and growing volume of sending, which includes everything an organization sends out, from parcels and overnight envelopes to bills and statements.”
In an effort to optimize shipping operations and manage costs, Pitney suggested that retailers match their strategy to their customer and business needs, selecting a mix of carriers that serves different delivery requirements and objectives. “In other words, don’t put all of your eggs in one basket,” the company said.
Cloud-based solutions can help businesses keep a handle on multi-carrier management and automatically reconcile all charges to one account.
The company also pointed out that retailers should be smarter about size: “With both FedEx and UPS imposing dimensional weight rating on all parcels, outer packing should consist only of that which is necessary to properly secure the enclosed items and provide protection during transport. Don’t ship small items in a big box.”