Blog Posts Poll Shows How Parcel Shippers are Handling Peak Season Surcharges

The latest peak season surcharges from FedEx and UPS could take a toll on your bottom line – particularly if you anticipate high parcel volume or ship a lot of heavy or oversized packages. What can you do to help offset these costs?

In a recent LinkedIn poll, we asked how shippers will most likely mitigate the impact of peak season increases. More than half of respondents (53%) said they plan to encourage early ordering. A quarter plan to raise their free-shipping threshold while 19% intend to increase delivery fees.

These customer-facing solutions can help to minimize the cost impact, but it also pays to take a strategic approach to parcel management on the back end. Megan Rudolph, who heads up the Parcel Solutions team at Saddle Creek, offers 10 suggestions to help optimize your parcel program for the holidays.

10 Tips for Controlling Holiday Shipping Costs

  1. Analyze the new surcharges carefully, using parcel analytics software to help determine where they will have the greatest cost impact.
  2. Establish relationships with multiple carriers, including regional and niche carriers, for more flexibility.
  3. Use rate-shopping software to help determine the lowest-cost shipping option for the desired delivery speed.
  4. Explore the opportunity to leverage zone skipping to help reduce shipping costs.
  5. Conduct a packaging study to ensure you’re using the most optimized box to avoid unnecessary dimensional (DIM) weight surcharges.
  6. Determine optimal origin sites by modeling various distribution network options.
  7. Utilize an order management system (OMS) to identify the best fulfillment source to minimize transit cost for each order.
  8. Communicate your peak season plans to carrier partners well in advance of the holidays.
  9. Share projected daily volume by origin DC as well as any changes in package size or service mix.
  10. Provide carriers with your promotion schedule to confirm that they can support the temporary spike in volume.

For insights to help navigate holiday deliveries, check out Rudolph’s Q&A with Digital Commerce 360.

Related to: Parcel Shipping