Shipping and freight services for ecommerce: choosing carriers and controlling costs
Shipping links your warehouse to your customers, and it is one of the largest costs in running an online store. The right carriers and services keep deliveries fast and reliable at a price that protects your margin. The wrong mix leads to late parcels, damaged goods and complaints.
This guide covers parcel carriers, freight for larger shipments, how shipping costs are calculated and how to negotiate better rates.
Parcel carriers versus freight
Parcel carriers move individual orders to customers. In the UK this includes Royal Mail, Evri, DPD, DHL, UPS, FedEx and Yodel, among others, along with local and regional couriers. Each offers different services, speeds and price points.
Freight moves larger or heavier loads, such as pallets of stock from suppliers to your warehouse, or bulky items to customers. Options include pallet networks, less-than-truckload (LTL), full truckload, and sea and air freight for international imports.
Choosing carriers
Assess carriers on:
- Delivery speed and reliability in the areas you ship to most.
- Size and weight limits, and charges for oversized parcels.
- Tracking quality and customer notifications.
- Collection options and cut-off times.
- Claims process for loss and damage.
- Price at your typical parcel profile.
Many stores use two or three carriers: an economy option for standard delivery, a premium option for next-day and a specialist for large or high-value items.
How shipping costs are calculated
Carriers price parcels on weight, size, destination and speed. Many use dimensional (volumetric) weight, charging on the space a parcel takes up if it is larger than its actual weight justifies. Right-sizing your packaging is often one of the quickest ways to lower costs; see Packaging & Branded Materials.
Watch for surcharges: fuel, remote areas, residential delivery, peak season and manual handling can all add to the headline rate.
Negotiating better rates
Once you ship consistently, carriers and brokers will usually negotiate. Prepare your data: monthly volume, average weight and dimensions, destinations and the services you use. Ask for quotes from several carriers, consider a shipping platform or broker that pools volume across many merchants, and review rates at least once a year.
Setting your shipping prices
Decide whether to pass costs on, offer flat rates or provide free shipping above a threshold. Free shipping lifts conversion but must be built into pricing. A threshold set slightly above your average order value can increase basket size while protecting margin.
Handling problems
Lost, delayed and damaged parcels will happen. Keep proof of dispatch and packaging, file claims within each carrier’s time limits and communicate proactively with affected customers.
Shipping services connect to the rest of your delivery operation. Read Last-Mile Delivery for the final leg, and Shipping Software & Integrations for automating labels and rate shopping.
Part of: Shipping & Delivery