Today, few businesses do not rely on logistics as part of their key operations. However, whether a business is constantly importing and exporting or is operating a small shop and just serving a national audience with their products, shipping probably plays an important role in any business model in one way or another.
With the e-commerce sector constantly growing, many people are trying their hand to open their own stores for the first time. Indeed, it is easier than ever to do so; however, when you receive an order, and it finally comes to fulfilling it, you might find that shipping is a more complicated matter than you first thought.
Many factors go into finding the right shipment method for you. It would be best if you minimized its costs to appeal to your customers without compromising the reliability and speed of the process. If you are importing or exporting, freight expenses can mean a huge difference for your business budget, too. Here is some information about the different ways to ship a package and decide which one is the best for you.
Basic methods of shipping freight
For your freight shipments that are going to travel a long way, there are several modes of transportation to choose from, each with its advantages and disadvantages. You will likely need to combine some of these methods for your shipment to get to its destination.
- Truck – As the name suggests, your shipment will be transported on a trailer. This is a recommended method for heavy shipments. You can go for FLT (full truckload), but also LTL (less than truckload), or even PLT (partial truckload) to transport goods that are not enough to fill up a truck.
- Ocean – If you need to move freight across continents, this is a great option for large shipments.
- Air – You can have your goods transported by plane, which is an expensive but fast method.
- Train – If it’s available, transporting by train is an affordable option that is still widely used today.
Additionally, intermodal and expedited shipping should be mentioned. Intermodal shipping combines different methods for optimizing the costs, while expedited shipping is used for time-critical shipments, usually combining truck and air. It can be difficult to decide which one you should choose if you don’t have much experience. Your best bet is to ask for a freight quote instead of guessing the prices.
Shipping packages to your customers
When talking about shipping packages to your customers, you will need to take several things into account to decide what methods to offer. Much of this will depend on your country and what is available to you. Depending on your needs, you will need to pick a carrier and determine your shipping prices based on that. For instance, in the US, you may choose between USPS, FedEx, and UPS as your carrier and base your calculations on their rates.
When deciding on your shipping methods, there are quite a few things to take into account:
- How fast do you want your product delivered
- The size of your shipment
- The weight of the package
- The distance the shipment will travel
- Extras such as insurance and tracking
It would be best if you decided on your priorities. Do you want fast delivery, or can you sacrifice instant gratification for more competitive shipping prices? It all depends on your business approach. Compare the options at the different carriers at your disposal to find the right match. You can also use a shipping rate calculator to do the math for you.
Consider that the shipping cost in itself is not all that goes into getting a package to its destination. It would be best to also account for the cost of packaging materials and the labor that goes into preparing and sending the package.
What kind of shipping should you offer?
Once you have the numbers, it’s time to decide on what kind of shipping you will offer.
- Free shipping – If your business can afford to absorb the shipping cost, offering free shipping is the best way to entice customers. In addition, free shipping can convince customers to pay more for products, so you might be able to maintain your margin, too.
- Flat rate shipping – One of the easiest solutions is offering flat rate shipping, the same price for shipping regardless of the package size or weight. It is a great option for some companies, but not for others.
- Table rate shipping – A lot of companies use table rate shipping. It gives more accurate estimates to customers depending on their location.
- Per product shipping – Almost similarly to flat rate shipping, you can offer per product shipping which would determine the shipping price depending on the number of products ordered.
- Calculated shipping – This option gives you the most accurate shipping prices, but it’s incredibly time-consuming if you are sending many packages.
Every business is different, so which method is suitable for you will depend on your needs. If you are just starting, you might need to experiment a little before finding what works for you.
Shipping is a complex matter, and so is calculating its price. So make sure you devote enough attention to it so that you don’t end up losing money in the process.