Online Retailers Weigh in on Carriers, Rising Shipping Costs, Same Day Delivery & More
Which carriers do today’s online retailers use and how satisfied are they with their service? How many are considering free shipping and same-day delivery programs? Who is thinking about changing carriers and why?
You’ll find interesting results in “Survey: Special Delivery,” just published by Internet Retailer. The survey includes findings from 116 e-tailers of all sizes. Among the findings:
Cost is a top factor in driving retailers’ decisions to modify their carrier portfolio. While more than three quarters of the respondents said they were “satisfied” with their carriers’ services, 20.4% were considering changing their carrier, citing cost as the reason. Some, such as one large e-retailer that ships up to 50,000 packages a day with UPS volunteered that it was “not looking to change our primary retailer, but diversify among carriers.”¹
Shipping costs are up for most shippers, but the exact increase depends on the specific kinds of products they ship and their shipping volume. The expanded use of dimensional rating has certainly caused significant price increases for shippers of lightweight small parcels.
As an example, Internet Retailer reported, “Web-only retailer BabyAge.com Inc. found that dimensional pricing resulted in one of its hottest products—the Today’s Mom pregnancy pillow—shipping as an 18-pound package, nearly double its actual 10-pound weight, founder and CEO Jack Kiefer says. Even smaller packages were getting hit hard, he adds. “If you take the DIM weight factor and other standard rate increases and residential surcharges, it got to the point where we were looking at it costing $9 to ship a 1-pound package across the street.”²
A recent cost summary chart by BirdDog Solutions illustrates how dramatic dimensional rating price increases can be:
In the face of rising shipping costs, a growing number of shippers are now looking to diversify their carrier porfolio rather than relying so heavily on a primary carrier. Regional carriers are getting their attention. As a result of lower operating costs, regionals can often pass along to customers savings of 10% to 40% over UPS and FedEx pricing. Most regional carriers transport packages via truck hubs instead of airlines, and trucking can be as little as 10% of airline costs.
The survey also sheds light on shippers’ use of free shipping programs as a customer incentive. While “free shipping” is a buzz phrase that makes it sound like everyone has it, the results show a different story:
Does everyone want their order right now? Not according to the survey:
And what about same day delivery programs? Maybe most online retailers are content to leave that to the Amazons and the Walmarts of the world, for now. According to the survey, just over 8% of respondents had a program, 20% were considering it and the remaining 70% had no program and also had no plans to implement one.
- Download the full survey — Survey: Special Delivery.
- Download white paper — Regional Carriers: A Sound Shipping Strategy for a Competitive Advantage.
Contact us today to explore how a carrier-agnostic shipping system can help you combat rising shipping charges.
¹ Allison Enright, “Survey: Special Delivery,” Internet Retailer, June 2, 2015.
² Paul Demery and Allison Enright, “Diversifying Delivery,” Internet Retailer, April, 2015.