7 Estimating Factors For Courier Shipping Costs
Courier services function with precision to deliver your parcels to any destination around the globe- but for a price. These shipping rates greatly impact overall business profitability.
Courier companies must know where to cut shipping costs even in uncertain economic times so that operations remain unaffected. As a customer, you must understand how you are charged for the courier service.
The following factors collectively determine the overall amount on your courier service bill:
1. Volumetric weight
Have you ever wondered why larger parcels that are lighter in weight cost more than smaller, heavier ones?
Most people tend to think that the parcel's actual weight is taken into consideration by the courier company. On the contrary, the weight is determined by the amount of space occupied by your parcel, known as volumetric or dimensional weight.
However, both the actual and volumetric weight is taken into account, and the one with the greater value is used to calculate the shipment cost. This is why large parcels cost more even when they are comparatively lighter in weight.
2. Parcel dimensions
Courier partners charge differently for A4 packages, compact parcels, large boxes, and pallets. This is one of the reasons why it is sensible to pack your things into perfectly fitting boxes that protect your products from damage during transit.
If your business thrives on courier services, it is advisable to have packaging cartons of various sizes so that you can use the most appropriate one that will safely hold the product without adding excessive weight.
3. Shipping distance
If you were sending one parcel to a location twenty kilometres from your office and another abroad, you wouldn't expect to be charged the same amount, would you? The shipping distance and destination are major factors because they determine the mode of transport, fuel spent etc.
Other factors that go into calculating the cost of distance are:
- Number of kilometres
- Mode of transport
- Fuel costs
- Other transportation costs such as toll
- Line haul cost
4. Delivery Surcharges
All miscellaneous expenses are categorised as delivery surcharges. Some of the most common surcharges that courier companies take into account are:
- Extended service charges for delivering packages to remote, rural, and hard-to-access territories.
- Extra charges for correction of paperwork like address correction.
- Surcharge for extremely large and odd-sized boxes that measure more than the courier service's standard format. This also includes non-stackable boxes and cylinder-shaped parcels.
- Fuel surcharge is based on fluctuating fuel prices.
- Situation surcharge, etc.
5. Custom duties
Customs duties are imposed by taxes levied on parcels transported across international borders. Since custom duties vary for every country, it can be quite challenging for you and your service provider to ascertain the amount. However, you can consult with the customs authorities to find out what it will cost you to send the parcel to a certain country.
If any additional fees or taxes are levied upon arrival at the mentioned destination, they will have to be paid by the recipient.
6. Delivery time
All of us want our couriers to reach on time. However, you may want to send certain items like important paperwork, or documents that must be collected at the destination much earlier than usual.
Most courier partners offer a range of standard and express service times and charge as per the time taken to make the delivery. The time frames are categorised as:
- Precise time slots to make time-specific deliveries.
- Express deliveries, including overnight services.
- Standard delivery times comprise between 2-7 working days.
Not all items require shipping insurance. However, this option benefits shippers transporting high-value and unique products. It also provides a sense of security for those shipping expensive items.
Tips to Keep Your Courier Costs Under Control
Figuring out your shipping costs is no easy task. However, if you run a business that depends heavily on domestic or international shipping services, you ought to consider the variables that drive the cost. This is especially important for any business because shipping rates have a huge impact on customer retention.
If you are looking to keep your shipping costs under control, here's what you can do:
- Have an open approach and ship with new providers.
- Avail discounts if there are any.
- Choose the right size and type of packaging.
- Always check your surcharges.
- Use only quality selection algorithms instead of price comparison platforms.