3 Ways to Cut Your Business’s Delivery Costs

July 26, 2022

 

While e-commerce has become the most convenient, preferred way of shopping for consumers around the globe, the delivery process still poses a few challenges to the e-commerce industry.

Tons of delivery company startups have popped up over the years, to satisfy this particular need. We’ve entered an era where package delivery is being crowdsourced via agreements between e-commerce sites and small, local courier companies.

However, it’s a very competitive industry, and delivery companies need ways to cut costs and increase their customer satisfaction to stay afloat.

So, if you’re looking to cut costs while delivering the goods, these six ways will help you get your shipping process on track, and cut costs in the process.

 

1. Use Free Route Planning Software

For last-mile deliveries, small courier companies can often depend on publicly available GPS maps, like Google or Waze. But these apps lack the features and tools of route planning software made specifically for courier companies.

Of course, you can spend a lot of money on specialized fleet software, but you can plan free routes with several tools to compare in that linked list.

One of the most important features of route planning software is multi-stop routes. GPS maps like Google or Waze only offer very limited functionality in this area. A courier company needs to be able to calculate the most efficient routes between multiple destinations and be able to change routes on the fly in the event of any last-minute delivery changes.

Being able to plan multi-stop routes will save your fleet money in fuel costs, and reduce overall delivery times, allowing you to expand your delivery territory. You’ll also benefit from greater customer satisfaction, as deliveries will arrive on time.

 

2. Shop Around for Third-Party Insurance

While carriers will offer their own insurance for your goods, it will often be an add-on premium, and may not have rates that are competitive with what a third-party insurance company will provide.

Carrier liability and freight insurance are two different things. With carrier liability, the carrier will provide coverage for lost or damaged shipments, but often not for the whole value. You’ll also have to prove that the carrier company was at fault, and the carrier will make many arguments as to why they aren’t 100% liable.

Freight insurance on the other hand is typically offered by third-party insurers, and will pay based on the declared value of the shipment.

Freight insurance is a better choice for larger shipments or items that could be very time-sensitive. While it seems like an added expense, the higher insurance cost means you’ll pay less for the actual goods, in case of loss or damage.

 

3. Negotiate Rates with Carriers

 

Another way to save money on shipping costs is by negotiating a better deal with your carrier. You can typically avail discounted shipping rates if your business is sending around 100 packages monthly, though exact policy depends on your carrier’s terms.

However, you still have bargaining power, so don’t be afraid to ask for discounted rates, or mention that other carriers are offering a better deal. Give your carrier’s contract service shipping department a call and speak to them directly about your specific shipping requirements, like minimum order quantities, package weight, and volume projections.

Freight forwarding companies need your business to stay alive as well, so don’t think you’re stuck paying whatever rates they set out. It’s a very competitive market in the courier industry at the moment, with plenty of players to choose from. Do your diligent research, and negotiate the best price for your goods.

 

Closing words

The price of shipping goods to various destinations can vary greatly. As a business owner, you should shop around for the best rate, and also ensure that you aren’t getting gouged by carriers, or being forced to pay a hidden administration fee.

Consider all of your options, and make sure you aren’t getting charged extra on everything you need to be shipped!

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