Even though we are still in the first quarter of the year, 2022 has already seen an increase in shipping costs; fuel has increased in price, deliveries need to be on time more than ever, as a result of growing demand. Covid-19 has also added to this challenging market environment. In light of this, the general increase rate of shipping costs experienced in 2022 (5.9%) is a substantial jump from that experienced in 2021 (4.9%).
This being said, many courier companies are focusing on small- and medium-sized businesses, working with them to help build their networks and prioritizing their deliveries due to a tighter capacity. This is a mutually beneficial decision for both the courier companies and the businesses they are serving. In turn, small businesses have seen the highest level of growth overall in the past twelve months.
A reason shipping companies are suffering in the current time is due to an overload of products being required across all sectors. Existing transport modes are similarly unprepared for the unprecedented surge; therefore, they are operating at capacity. It is, therefore, important to know the best way to reduce shipping costs, and partner with the right company. This shows that they are able to be adaptable and reliable across a number of avenues, rather than one sector, and may have additional ways to effectively reduce your costs.
We have put together five points that can help reduce your company’s shipping costs in 2022:
1. Simplify Packing
When possible, group products to be shipped together to reduce not only packing time, but also cost. The number of packages being sent can increase the cost. While larger, oversized items can cost more, on the whole it will be a cost-saving solution when compared to the cost of multiple smaller packages.
Depending on what you are shipping, reducing the dimensions of your package is also a method of reducing the price. Obviously valuable or fragile products require additional packaging; however, this is not the case with all items. Limiting the amount of unnecessary wrapping or packing materials allows you to make the dimensions of your shipment smaller, thus incurring higher costs.
2. Use the same company
When using a courier company, it benefits both the business and courier to work in partnership; using the same logistics provider means a better and more reliable service, every time. Continuing custom and the buildup of a relationship between courier service provider and business means the overall costs will be cheaper. Creating a working relationship with certain companies will also mean your business would be assigned an account manager, who will be a continuous point of contact for all your business’ shipping needs. Having an account manager will make every element of product transportation straightforward, easy and can help save additional costs where possible.
3. Supplier Partnership
An additional way to further decrease costs is by getting your suppliers to use the same shipping company. Not only will this mean you and your account manager have more knowledge on supplier shipments, but your business can organically access higher volume discounts the courier company offers.
The more suppliers who switch to your courier partner, the smoother the supply chain at every stage. Therefore, this will not only will it save costs and time, but also helps avoid delays, and stress.
4. Dimensional Weight
Dimensional weight is a key factor which can influence shipping prices. Although prices do differ with different logistics providers, the traditional dimensional weight calculator is length, multiplied by width, multiplied by height. Ensuring this information is accurate across all documentation helps to provide an accurate indication of the shipping costs. While this gives you a good estimate of the cost, it also avoids the issues – and costs – that come with shipping charge corrections. While it’s not a way of reducing costs directly, it is a way of avoiding unnecessary additional costs.
5. Consider Regional Carriers
Using regional carriers for your shipping may be a cost-effective solution, but it does mean that you would have to sacrifice the significant benefits that come with using the same company – but not always!
Using one company throughout the whole of your supply chain is the best choice, but how can you do this and use regional carriers? The answer is simple; when you choose a particular carrier as your business’s logistics partner, make sure you choose carefully. Some shipping companies have offices and bases across the world, so you can both use local, regional carriers while remaining with your trusted company. What’s more, if your shipping company doesn’t have their own delivery service in that country, they will have partner companies that they will trust, and that will still provide you with the level of service you expect from your courier company.
So using regional services and your shipping company partner can be cost-effective and easy, and can be done by using a courier partner with an extensive network across a number of regions. One that partners themselves with reputable regional carriers in regions where they are not present also offer an additional level of confidence to ensure your delivery is in the best hands possible.
Royale International has more than 25+ years’ experience in partnering with businesses of all sizes, from small start-ups to fortune 500 companies, providing exceptional delivery services unparalleled by competitors. With offices the over the world, and the most reliable network of partners, Royale International can help you improve shipping cost efficiency, without sacrificing service. For more information on partnering with Royale International: https://www.royaleinternational.com/services/international-courier/