6 Ways to Reduce Your Shipping Costs

May 28, 2024

Whether you are in the e-commerce, healthcare, manufacturing, or a retail industry, there are ways you can reduce your shipping costs with UPS and FedEx.

 


Here are some tips to avoid common errors that drive up the cost of shipping:


 

  • Use the Correct Size Boxes

Make sure you have the proper boxes to ship all of your products. The two main carriers, UPS and FedEx determine billing on a number of factors, and one includes dimensional weight. Dimensional weight is determined when shipping domestically, by taking the length x width x height and dividing it by 139. The carriers determine billable weight by whichever is greater, the actual weight of your box or that dimensional weight calculation. If you are putting your products in too big of a box, then you will be charged accordingly which will result in costing your company more money to ship your package to the end user.


  • Understand and Utilize Service Levels

Service Levels are extremely important to pay attention to when shipping your packages. Do you have a ground transit map from your carrier next to the computer where you process the shipping labels? If not, you may want to download one from UPS or FedEx and hang it up by your shipping station. We often see companies shipping something overnight or using the 2 day service when they could have shipped something by ground and saved a lot of money. 3 Day service shipping is only advantageous if it would take 4 days or more to ship it by ground. Otherwise, you are best to ship it using ground. If shipping International, picking the best service level is extremely important. The quickest service options will cost you more money.


  • Communicate and Plan with your Shipping & Handling Team

What commitment promises are you giving to your customers. Make sure the people that are doing the packaging and label producing understand this. If your commitment is 2 days, they need to know when to use 2nd day air verse ground shipping to get your packages to your customers.



  • Double Check Addresses

Address Corrections-This is a money maker for both UPS and FedEx. All the shipping software now have an address validation tool to make sure the address is accurate and matches up to the addresses used by the USPS. Having a means to get the address from your internal software to UPS and FedEx software to produce your labels is extremely important. If you are manually entering the addresses, the human element of error comes into play. Both UPS and FedEx offer the option to validate the address before producing the shipping label.



  • Utilize LTL Carriers

Large packages, whether by dimension or weight, must be identified. Both UPS and FedEx tack on a lot of additional fees for these oversized boxes. Having a LTL carrier or two as an option to ship these large packages is advantageous; comparing cost is important to reduce your shipping costs. In most cases shipping the large and oversized packages will be cheaper using an LTL carrier. Read also parcel spend management.



  • Always Enter Package Dimensions

Finally, make sure you are entering in your package dimensions when you ship each package. The carriers measure the packages once it gets into their system by the outer dimensions. I see a lot of people pre-enter their box sizes into the shipping software, but then overpack the boxes. When it goes into the carrier system their technology will pick this up. Making sure the packing tape is securely firm is also important. If the tape is flapping, the technology picks this up and your dimensions can change quite a bit. The adjustments will appear on your bill and can cost you a lot of money if you are not accounting for them.

 

Addressing these main areas can prevent costing additional money throughout the year with UPS and FedEx thus making your business more profitable. Reach out to us for a free rate analysis to find out where you can save.


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