You Too Can Offer Free Shipping
First Class mail parcels weighing one ounce to 13 ounces are a bargain, even at the retail rates of $1.71 to $3.41. With private carriers FedEx and UPS, the residential surcharge alone costs $2.45 to $2.75. Moreover, the USPS doesn't charge for accessorial charges like fuel, residential delivery, area surcharges, pickup service, Saturday delivery, among other things.
The USPS also offers a variety of unlimited weight envelopes and boxes. As its national advertising campaign proclaims, “If it fits, it ships.” USPS recently added regional boxes to flat-rate options, adding yet another low-cost alternative to the convenience and cost advantages of prepaid, unlimited weight products.
Parcel consolidators market their services as providing delivery times at or near First Class mail parcel service standards, but at lower pricing. Other benefits include improved shipment visibility and less handling and damage.
According to the USPS, the major ground consolidators are FedEx SmartPost, UPS Mail Innovations, Streamlite, Blue Package Delivery, Newgistics, DHL Global Mail, Fairrington Transportation, Kaleidoscope Services, OSM Worldwide, ParcelPool and SP Express.
Each ground consolidator leverages USPS Parcel Select services and workshare discounts. Consolidators handle pickup, sorting, transportation and induction to the USPS hub. USPS handles the “final mile” delivery. The deeper the induction to the USPS, the greater the workshare discounts enjoyed by the consolidator and, in turn, the greater the cost savings available to shippers.
Online retailers are wise to measure current shipping-and-handling policies and costs to evaluate alternative residential delivery options. The U.S. Postal Service and parcel consolidators could significantly reduce your shipping costs. Maybe you can offer free shipping after all.
As always, let me know if I can help! You can contact me at firstname.lastname@example.org.
Rob Martinez is the CEO of Shipware LLC, a professional services firm that transforms businesses through intelligent distribution solutions and strategies. Rob has helped some of the world’s most recognizable brands reduce parcel shipping costs an average of 25 percent through contract negotiations, rate benchmarking, modal optimization, invoice audit and other savings vehicles. A cum laude graduate of UCLA, Rob has 20 years of transportation industry experience, including executive positions at DHL and Stamps.com, in addition to his work as an outside consultant since 2001.