Optimized Shipping Operations Counter Growing Complexity, Higher Costs, And Increased Volume
By Christine Kern, contributing writer
Retailers search for innovative solutions to optimize mission-critical operations.
Growing complexity, higher costs, and increased shipping volume mean that retailers and e-retailers are forced to search for innovative solutions to optimize their mission-critical shipping operations, according to the latest reports from Pitney-Bowes.
UPS and FedEx each recently announced rate increases for shipping services, and the U.S. Postal Service also has announced a rate increase beginning January 17th, meaning that businesses need to find ways to absorb or pass on these hikes to their customers.
UPS increased ground services rates an average of 4.9 percent on as of December 28, 2015, while the rates for UPS Air and International services rose an average net 5.2 percent. Meanwhile, FedEx raised rates by 4.9 percent, effective January 4, as well as implementing dimensional weight pricing on all shipments, rate changes that affected FedEx Ground, FedEx Home Delivery, FedEx SmartPost, FedEx Freight, FedEx Retail, and FedEx One Rate. FedEx also increased the delivery surcharge on residential FedEx Home Delivery from $2.85 to $3.00, and Residential Delivery Charges on FedEx Ground Home Delivery from $2.0 to $3.10.
Meanwhile, the rate changes with USPS affect USPS shipping Services products including Priority Mail, Priority Mail Express, First-Class Package Service, Parcel Select, and Standard Post (Now called Retail Ground). The average Shipping Services rates increase 9.5 percent, resulting in an average shipping price of less than $5.50 per shipment across all shipping products. No price increase was established for First-Class Mail, Standard Mail, or any other Postal Service Mailing product.
“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,” said Jeff Crouse, Vice President at Pitney Bowes. “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,”
Pitney-Bowes has several suggestions for optimizing shipping operations to effectively manage costs:
- Match your sending strategy to your customer and business needs. Don’t lock into a single carrier; utilize the best mix of carriers to meet both customers’ delivery requirements and your own business objectives.
- Leverage new technology. Employ cloud-based sending solutions to deploy a consistent, unified, and scalable approach to sending.
- Eliminate wasted space. Use the smallest shipping box possible for each parcel while still ensuring the integrity of the product.
Many retailers are also pushing order online/pickup in store services to help combat the rising shipping fees and strengthen their ecommerce presence.