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Multi-Carrier Shipping Blog

How to Compare Shipping Costs

Posted by Greg Marone on Feb 2, 2017 8:00:00 AM

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Reducing your shipping expenses or streamlining your shipping costs is achievable by comparing different carriers' offers on costs. However, there are a few comparison factors to keep in mind, including the shipping prices, different weight breaks and different shipping zones. Here are a few ways to compare shipping costs.

Getting Started

Manually

One of the simplest – but most process-intensive – ways to conduct a comparison between shipping carriers is by exporting a list of shipments with their weights and destination postal codes from your order system, such as a month’s worth of data. You can then run that data through a program or manually look up the rates and compare current costs to other carrier rates.

For example, if you ship only via UPS, you can use your UPS invoice and compare it to the rates of FedEx to determine which carrier would best match your shipping needs. However, this type of manual comparison can be very tedious and time-consuming.

Proprietary Sales Tools

You can also compare shipping costs by using proprietary sales tools. For example, Creative Logistics offers a sales tool that compares carrier rates with USPS rates. USPS tends to be the cheaper way to go with shipping out products, especially if your shipments are under one pound. The program will compare your current costs to USPS' rates so that you can determine if it would have been cheaper to ship via USPS and how much you could have potentially saved using USPS for that time period.

From the Carrier

You can also contact shipping carriers directly to conduct a shipping costs comparison. In addition to providing you with their shipping rates, carriers may also provide you with a discount offer. This is also the quickest way to evaluate the best costs from shipping when comparing carriers. However, it will require you to share your shipping data with the carrier.

Discount Comparison

While you may already have a discount with a carrier, it can still be worth comparing carrier rates based on where your shipment is going. For example, you can evaluate whether or not you get better shipping rates with one carrier over another based on the weight breaks and shipment zone destination. You can also compare which carrier provides you with better shipping discounts, such as a larger discount on the bulk of your shipping.

For instance, if 60 percent of your shipments are headed to zones 1-3 and are all under five pounds, use this data to quickly compare the cost effectiveness for the bulk of these shipments among different carriers, such as UPS, FedEx and USPS. As well if you know this data you can focus on getting deeper carrier discounts for these specific zones and weights while sacrificing other zones since you know the majority of your shipping will be in these deeper discounted zones.

Key Considerations

There are a few key factors that you want to keep in mind when you’re comparing shipping costs internally.

Packing Material

If you’re looking to reduce shipping costs from a global standpoint, then consider your packing materials. Use lightweight packing material, such as paper or popcorn, to avoid adding unnecessary weight to the product you are shipping. Also, be conscious of the weight of the box when you are including additional promotional materials, as these marketing materials can also add extra weight to your shipment.

Shipment Dimensions

Since carriers often charge more money for larger shipments, keep package sizes as small as possible to help lower shipping costs. Make sure that you are using the right-sized box to fit your product. For example, if you are carrying a new product line but only have four sizes available for shipping boxes in your warehouse, then you may need to get a new box size to fit the size of your new product to avoid possible higher shipping costs.

Final Thoughts

Whether you're looking to reduce shipping and warehouse management costs or deciding which carrier provides the best shipping discount, it's worth conducting a shipping costs comparison.

Consider the shipping rates, the packing material, package dimensions, carrier discounts, different weight breaks and different zones your shipments will go to find the best shipping option that best fits your needs and saves you money without sacrificing on-time deliveries.

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Topics: warehouse, carriers, shipping costs