Maintaining the success of an eCommerce business and scaling it requires building firm relationships with reliable suppliers, manufacturers, third-party logistics (3PL) providers, and a shipping carrier, all of which should fit perfectly with your business goals. Factors such as the type of goods you deal with, the average order volume and weight, their cost, and where your suppliers/manufacturers and customers are based, are the major determinants of which carrier will best suit your shipping strategy.
The peak shopping season starts from the back-to-school days and lasts until the very end of holiday shopping sales, making the last five months of the year the prime shopping and shipping season.
COVID-19 shut down several manufacturing plants and warehouses around the globe. The traveling restrictions and quarantines massively impacted the availability of goods and shipping carrier rates due to the skyrocketing consumer demand.
The increase in sanctions against the world’s third-largest oil-producing country Russia has resulted in a massive increase in fuel prices resulting in soaring land freight shipping costs. Travel restrictions on top of trucking logjams over the Russian-Ukrainian conflict have majorly affected the shipping landscape for land freight.
Consumer demand has been on the decline due to the rising inflation causing further price hikes, resulting in the global container freight rates for April 2022 to be 119% of the rates of 2021 with the Asia-U.S. West Coast rates are 168% of the shipping rates of 2021.
Air shipments just like land freight and ocean freight are suffering from the consequences of political conflicts and the pandemic outbreak with a significant increase in rates despite a decline in demand.
The major shipping carriers such as DHL, FedEx, UPS, and USPS, have an annual practice of increasing their service rates. These new rates are often announced at the year-end and become applicable at the start of the new year. Fuel surcharges are calculated as a percentage of the weekly base fuel rate. Here’s a summary of the recent changes made by major shipping carriers to their shipping rates including peak surcharges:
Applicable from December 26, 2021
3-6% increase in cost on average, but varies by weight and zone.
Applicable from January 1, 2022
3-6% increase in cost on average, but varies by method, country, and weight.
Applicable from January 3, 2022
3-7.5% increase in cost on average, but varies by method, country, and weight.
Applicable from January 9, 2022
3.1-7.5% increase in cost on average, but varies by weight and region.
Note: These rates may vary depending on the shipping carrier and whether your organization works with or without collaboration with a 3PL provider. For specific information, you will need to check with your carrier and/or 3PL fulfillment provider.
Shipping Rates are on a constant incline towards increase with no apparent shift towards getting lower soon. However, you can still effectively steer through the current market by trying out the following recommendations:
Explore the market for the best options available. Consider the mode, time duration, and cost demand that suits your business. While ocean freight is typically less expensive than air shipments, it has a far longer lead time. Only opt for it if your business doesn’t demand faster shipments, otherwise, be ready to pay for pricier but faster shipments by air.
The current instability and insufficient capacity can cause delivery delays, therefore it’s best to stay prepared with the product and budget buffers.
It is critical to stay on top of your transit time to maintain customer loyalty and the success of your business. Prioritize faster delivery for urgent orders only, otherwise waiting for order shipments that save you time and money is wise.
Explore warehousing choices and remember the factor of freight costs. Try to book earlier to avoid the higher peak season rates. Doing this could help you mitigate the effects of lowered customer demand and the imposition of increased business restrictions.
The most important factor to weigh in while finalizing which shipping carrier, you’ll partner with, is their price offering. While it is critical to carefully compare the cost of services, factors such as the quality of service, reliability, and punctuality are just as vital. By collaborating with an experienced 3PL provider, you can trust them the weigh crucial factors and make the best choice for you.
3PL providers who prioritize sustainability can help you lessen the impact of shipping surcharges by restricting empty miles and optimizing fuel efficiency as a daily business practice. A third-party logistics providing company can also help you identify unnecessary movement in the backhaul of trucks and enable you to save costs and reduce your environmental footprint. At ShipBots, we partner with the above-mentioned carriers and try to offer you the best shipping rates. Contact us to learn in detail what shipping rates we are currently offering.
