Mastering Shipping Rates: Tips for Getting the Best Prices
by Jaidyn Farar
Imagine somebody doing their weekly grocery shopping. They notice that prices are unusually high, sigh in resignation, and continue putting items in their cart. The shopper has several options for finding better prices. They could try a different store to see if prices are lower, or they might find some coupons. Even buying in bulk could save money in the long run. Instead, they continue paying the high prices for their grocery haul.
Seems strange, right? But that’s the approach some ecommerce stores take when it comes to shipping. Even if rates seem high, they just keep buying labels, not realizing that they have other options.
If you’re feeling stuck with too-high shipping rates, you’ve come to the right place. This article, based on a recent webinar with EasyPost and Flexport, will outline some key strategies for decreasing your shipping costs.
But first, a quick introduction to shipping rate management:
What is shipping rate management, and why does it matter?
Shipping rate management is the process of negotiating and optimizing shipping rates. The goal of rate management is to balance cost and service quality; while you obviously want to save as much money as possible on shipping, savings shouldn’t come at the expense of on-time delivery.
Rate management is crucial because last-mile shipping, the final step in the fulfillment process, makes up a disproportionate amount of your total shipping costs. When you transport a load of products to your warehouse as freight, each item may only cost cents to move. On the other hand, shipping a single item to a customer can cost several dollars.
By focusing on rate management, you can reduce last-mile delivery expenses and improve the customer experience.
How to get the best rates
During the webinar, co-hosts Lori and Jason discussed several ways to level up your rate management strategy. We’ll review three ideas: building relationships with carriers, using your shipping data as leverage, and relying on technology.
Build strong relationships with carriers
The logistics industry is heavily relationship-driven, and communicating regularly with carrier representatives can help you access better rates and service.
- Have weekly conversations. Start by scheduling weekly meetings with your carrier representative to review costs and performance. Talk about key metrics such as on-time deliveries, data flow, and service quality, as well as issues like lost or damaged packages.
- Hold quarterly business reviews (QBRs). Conduct regular QBRs with members of your leadership team and carrier representatives to align on goals.
Use shipping data during negotiations
Negotiating shipping rates can be intimidating! These tips will help you present your case clearly and persuasively.
- Share key data. Come to negotiations with your shipping data. This includes information on packages shipped, delivery times, volume, shipping lanes, service levels, and carrier performance.
- Be transparent about your goals. Remember, this isn’t all about you—negotiation is all about finding a win-win scenario. Be open about your target rates and goals to find realistic solutions that benefit both you and the carrier.
Leverage technology
For many businesses, negotiating with carriers is time-consuming and expensive. Others simply don’t have high enough shipping volumes to negotiate better rates. If these challenges sound familiar, consider using multi-carrier shipping technology.
Shipping systems like EasyPost integrate with multiple carriers, provide access to volume discounts, and automatically select the best shipping method for each package.
See how EasyPost helps with rate management.
Get more tips for cost-effective shipping …
Get more tips for cost-effective shipping by watching our webinar, “Mastering the Shipping Rates Battle: A Step-by-Step Webinar.” Co-hosted by Lori Boyer, host of EasyPost’s Unboxing Logistics podcast, and Ryan Leahy, director of operations at Flexport, the webinar takes a close look at strategies for choosing carriers, negotiating rates, using technology, and improving shipping processes.
Stream the webinar on-demand (no email required).