Shipping costs can make up to 70% of a seller’s transportation budget. Yet there are so many variables that go into total shipping costs that it can be difficult to optimize your strategy. Every seller wants to land in the sweet spot between low cost and premium service. There are certain aspects that experts look at in order to optimize for lower costs, maximum customer satisfaction, and ultimately growth opportunities.
It’s particularly challenging to decipher which carrier service is best in 2021 with so many industry changes and surcharge increases in the past year. DCL Logistics’ Transportation Manager, Monica Hayden says, “I’m checking online every single day for carrier updates, because I don’t know when they are gonna decide to put in an extra surcharge. A few years ago I only checked once a year. Now it’s practically non stop. We have to be on top of these things in order to get the information to our customers.”
Top Shipping Questions You Should be Asking Your 3PL
It’s easy to understand the very basic cost of shipping a product. But nothing is quite that simple or straightforward. Monica says, “Once a company starts to really look into the details, they’ll see freight adjustments or surcharges. They always have questions about those. It’s my job to help them understand all the details that go into the rates.” It shows the intelligence of a seller who can ask the right questions because there are base transportation rates, but there can be many fees tacked on at the end.
These are some of the primary questions you need to be asking in order to find the best matched carrier for your needs:
- What are your shipping characteristics?
- What’s the destination?
- What is the size of the box?
- What’s your ideal transit time?
- Do you need to focus on customer service?
How to Understand Your Shipping Rates
Each carrier has its strengths and weaknesses, some are better for customer service, some are great for certain types of products. Then within each carrier there are many services that sellers can choose from. It truly takes an expert, someone who knows the intricate matrix of all the shipping variables, to best match a carrier to your brand’s needs. Only then can you get to an understanding of what your actual rates will be.
Monica says, “You have so many factors you’re looking at: the product itself, weight, the destination. Then it gets so much more complicated when it becomes international. But all of these details are important and need to be taken into consideration when vetting your carrier.”
How to Adapt to the State of the Shipping Industry
Right now is a really interesting time because UPS and FedEx are tacking on so many surcharges. Sellers aren’t happy with that because it means they are in a difficult position to either absorb the extra costs or charge consumers. Monica explains, “These surcharges are often overtaking the original order value of some products. For example, if a customer creates a $10 product, and their shipping is $20 or more, it stops making sense for them to use that carrier. It’s getting a bit ridiculous in some cases. My team and I are working really hard to find other solutions that make a bit more sense.”
Because of this she’s seen a growing shift toward using regional carriers. With order volumes continuing to increase since the beginning of the COVID lockdowns, the ecosystem of regional carriers has blossomed. They are booming and they aren’t even taking away any business from the major carriers—that’s how much ecommerce has grown.
At DCL we have long standing relationships with all the major carriers. Monica explains, “It’s an important part of my job to have close communication with our reps. For example, there have been a lot of capacity issues recently.” Being in direct communication with our carriers means our team makes the best decisions for our customers.
Monica says the transportation industry has changed a lot in the past few years. Changes that may have taken five or ten years to roll out have been accelerated due to COVID.
A dedicated transportation expert can make that difference for your brand. At DCL Logistics our team helps sellers choose the best carrier, rate-shop shipping services quarterly, and grow into new international markets when the timing is right. Reach out for a quote if you’re in need of shipping help.