How to Fight Increasing Shipping Costs

In a few short weeks you will begin to receive higher freight bills from your carriers.  Most carrier increases will be effective January 6, 2014.  Very generally, you should see a 3.9% increase.

When this realization sinks in, you have several options:

  1. Jump out your office window
  2. Yell and scream at anyone who cares to (or has to) listen to you.
  3. Restructure your offers by increasing prices for shipping and handling to cover the increased costs
  4. Contact your fulfillment partner to discuss tactics to mitigate the effect of the carrier increases.

The correct answer is:  #4

Your fulfillment partner studies the rate programs and understands the nuances that the carriers have built into the latest round of increases.   We also have many tools in our arsenal to help offset the increases.

First, quantify the cost impact of the 2014 rates based on your historical information and projections for the coming year.  This is your benchmark.

Second, revisit your goals regarding shipping.  You may have set your goals at one point.  But don’t just forget about it.   Do you want to offer or continue to offer free shipping?  What is the minimum purchase required for free shipping?   Are your customers willing to pay for expedited shipping?   Do different types of customers or orders require different shipping times?   All of these are factors which may have changed over time.

Third, look for creative solutions to lower your costs.  At a2b Fulfillment, we work with each client to create the best strategy for them, based on their product and order characteristics, customer expectations and cost parameters.

We have written extensively about the annual price increase ritual by the major carriers.  A good source is our article in the December 2013 issue of Response Magazine.

Ayal Latz is President of a2b Fulfillment.

Contact Debbie at (866) 843-3827 ext. 211, or debbie@a2bf.com.

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