All Things Shipping | Feb 21, 2023

Ecommerce Shipping Essentials: Diversifying Your Carrier-Mix

Hasan Nabulsi

Perhaps one of the most important aspects of ecommerce shipping is offering competitive shipping rates. In a world where many virtual markets are saturated, it’s vital to set yourself apart from the crowd – and offering a mix of value and cost when it comes to shipping is a great way to do that.

The truth is that consumers don’t like paying extra fees like shipping charges. It’s the reason why large ecommerce operations like Amazon have created strategies that allow them to offer fast and free shipping. Widening your carrier mix also allows you to offer a more personalized shipping experience for your client base and minimize return costs.

Diversifying Your Carrier Mix for Optimal Shipping Costs

There’s an easy way to optimize ecommerce shipping costs: diversify your carrier mix. It might sound intimidating, but you’ll be happy to learn that it’s easier than you think.

Carriers charge for shipping based on the size, weight, and destination of a parcel. In other words, a large package traveling internationally will cost more than a small one shipping to the next town over. Based on these metrics, you’ll discover that finding the cheapest rate means matching the package up with the right carrier.

To put this into perspective, we’ll look at the cost of shipping three packages via USPS, FedEx, and UPS.

5” x 3” x 1” package weighing eight ounces, shipping from Los Angeles, CA (90015) to Denver, CO (80216)

UPS® Ground FedEx Ground Economy USPS First-Class Package Service
$7.52 (3 days) $6.10 (2-5 days) $4.20  (5 days)

In this instance, USPS would be the most cost-effective option for shipping a small package weighing under a pound in a nearby zone.

50” x 5” x 3” package weighing 80 lbs, shipping from New York, NY (10019) to Los Angeles, CA (90015)

UPS® Ground FedEx Ground® USPS
$90.55 (4 days) $183.97 (5 days) N/A

In this example, since the package weighs more than 70 pounds, USPS isn’t even an option. On top of that, discounted rates aren’t available for packages that weigh this much so you would have to pay the retail rate. This makes UPS far and away the best option based on shipping costs as well as time in transit.

5” x 3” x 2” package weighing eight ounces, shipping from New York, NY (10019) to London, UK

UPS Expedited® FedEx International Connect Plus (FICP) USPS Priority Mail International
$36.06 (3 days) $17.58 (6 days) $60.14 (8 days)

In this international shipping example, shipping through FICP would be the clear winner in terms of cost. Keep in mind that UPS will deliver the package in half the time and at a rate that still might be manageable for your customers so you’ll want to offer both options.

As you can see, having a diverse carrier mix gives you the options you need to secure the best shipping rates possible. You should also consider shipping with regional carriers that service specific areas, which may give you access to even more competitive pricing versus national carriers.

Give Your Customers a More Personalized Post-Purchase Experience

Earning repeat business is a surefire way to increase your store’s profits. That means your business strategy needs to be focused on providing top-tier features that lead to customer satisfaction.

According to Shippo’s 2023 State of Shipping Report, ⅓ of customers have a personal preference for which carrier delivers their order. This is a great example of why broadening your carrier mix is an absolute must when prioritizing customer satisfaction.

The best part is that a varied carrier mix offers even more opportunities to personalize your customers’ post-purchase experience. Let’s look at some examples:

  • Definitive delivery times: Carriers like UPS and FedEx offer guaranteed delivery on many service levels, whereas USPS does not.
  • Weekend deliveries: Receiving deliveries during the work week can be problematic for some customers. Offering shipping options that deliver on the weekend solves this problem. Not every carrier offers the same weekend delivery options. For example, unlike UPS and FedEx, USPS will deliver on Saturdays for free. For those hoping to get their package on a Sunday, FedEx Ground Economy can deliver to nearly half of all American households.
  • White glove delivery services: Some regional carriers offer premium white glove delivery services that will go inside your customer’s home and assemble your products for them versus standard delivery methods that will only drop off the package outside your customer’s residence.
  • Personalized delivery options: Services like FedEx FICP allow ecommerce merchants to offer personalized delivery options to international customers, such as delivery to a secure locker rather than to a home or business address.
  • Value-added services: Many carriers offer additional services, such as shipping insurance and signature on delivery, that enhance the customer experience.

Speed Up Your Fulfillment Times by Using Multiple Carriers

Undoubtedly, getting packages safely to their destination in the shortest amount of time possible is paramount to customer satisfaction. Aside from offering expedited delivery options, you can do a few things internally to cut back on fulfillment times, leading to an overall more pleasant customer experience.

If coordinating package drop-offs is negatively impacting your fulfillment times, using carriers that offer free package pickup (such as USPS) is a great solution to that problem. Many carriers also allow retailers to drop off packages at partnered locations, which allows you to get parcels in their hands faster.

However, you’ll need to consider each carrier’s size and weight limits to determine the best choice.

For example, UPS shipping limits packages to 150 pounds and up to 165 inches in length and girth. USPS shipping, on the other hand, won’t accept packages that weigh more than 70 pounds or are more than 108 inches in length and girth.

Practices like this allow you to decrease transit times without costing your company or your customers more money in shipping. This leads to happier customers and more money in your pocket at the end of the day. It’s a win-win!

Use Your Carrier Mix to Minimize Return Costs

Did you know that our most recent Returns Report showed that 96% of shoppers are more likely to shop with a retailer that offers free returns? That means you’ll also need to scour your carrier mix for the most cost-effective way to handle returns.

Unfortunately, offering free returns to customers comes at a cost for ecommerce businesses like yours. Luckily, there are plenty of options out there that can help you minimize return costs without sacrificing quality.

If you want to offer free returns and cash in on increased sales, using the most cost-effective return shipping option you can find is vital. This ensures you can offer a great customer experience without negatively impacting your bottom line.

You might be surprised to learn that the same carrier you used to ship a package isn’t always the best option to handle returns. Since returns aren’t typically as time-sensitive as deliveries, you can afford to sacrifice a few days of transit time in exchange for a more affordable shipping rate.

With Shippo, you can quickly and easily compare return rates, which enables you to select the carrier with just the right mix of cost and value.

How to Make the Most of Your Multi-Carrier Shipping Strategy

It’s no secret that using a multi-carrier shipping strategy can have a positive impact on your business. However, implementing this strategy can be a lengthy and confusing process without the right tools.

Luckily, using shipping software like Shippo makes the process easy. With Shippo, you can take advantage of automatically-applied discounts on carrier services from USPS, UPS, and now even FedEx. What’s even more exciting is that you currently won’t find native discounts on FedEx shipping rates on any other platform.

The benefits of using Shippo don’t stop there. You’ll also be able to take advantage of top-of-the-line automation abilities that allow you to print the right label with the right carrier for the right product every time. That means you won’t need to waste time using multiple websites or risk packages getting delivered to the wrong address ever again.

Using a tool like Shippo to your advantage is the best and easiest way to create a positive experience for your customers while improving your internal processes and saving money simultaneously. Get started today!

Hasan Nabulsi is the Content Marketing Manager at Shippo.

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