January 4, 2010, both FedEx and UPS will increase their ground rates 4.9%. All other service level rates will increase as well. I have been telling clients now is a great time to evaluate your shipping.
First, are you shipping from the best location? If you have clients nationwide, locate your distribution center in the Midwest. If you have a large California customer-base, a West Coast fulfillment center makes sense. The best way to reduce your small package shipping costs is to reduce your zones traveled. Plot your customers on a map and take a look. That’s what TAGG did, and that is why we fulfill product out of both St. Louis, Missouri and Reno, Nevada.
Second, shop your rates around. Have your logistics provider quote out rates if you were to ship on their account. Maybe they get better rates than you. If you do not outsource your fulfillment, get quotes from some providers on shipping and handling fees. Often our small package rates are so much lower that the difference more than pays for the fulfillment fees.
It won’t cost you anything to do some research but as prices keep going up, it will be worth it!