Shipping Operations: Optimize Cost, Speed, and Accuracy

Shipping operations may not be the most glamorous part of an ecommerce store, but they’re the backbone of a successful business. 

Everything that happens behind the scenes, from inventory organization to picking speed, contributes to a customer’s purchase experience—and determines whether they’ll buy again. 

Even small efficiency gains can lead to major cost savings and skyrocketing customer satisfaction. But achieving these results isn’t always easy. 

Fortunately, with the right tools and strategies, you can keep your logistics running smoothly and cost-effectively. In this article, we’ll take a close look at each component of shipping operations, review some common challenges, and share best practices for shipping success.

Key takeaways

• Shipping operations are the backbone of ecommerce, covering everything from inventory management to delivery tracking.
• Smooth shipping operations depend on four key phases: order receiving, order processing, fulfillment, and shipping.
• Optimizing shipping operations helps businesses lower costs, boost efficiency, and improve customer experiences.

What are shipping operations?

Shipping operations include all of the processes that move an order from your warehouse to a customer’s doorstep, from inventory storage to picking, packing, shipping, and tracking. 

With well-organized shipping operations, packages reach customers on time, undamaged, and containing the right items.

Contrary to popular belief, shipping doesn’t only matter in the warehouse; shipping operations are closely intertwined with sales, marketing, and customer service. For example …

• Low shipping costs help improve conversion rates.
• Successful deliveries lead to good reviews and repeat customers.
• Fewer delivery issues means fewer hours spent communicating with frustrated customers.

Long story short: Improving your shipping operations will help your business stay competitive, maintain margins, and deliver the fast, reliable service that online shoppers expect.

Types of shipping operations

Ecommerce businesses rely on two main types of shipping: freight and parcel. While both are essential for moving goods through the supply chain, they have unique use cases. 

We’ll break down some of the differences.

Freight shipping

Freight shipping is used for moving large or heavy goods and is usually measured in pallets or truckloads rather than boxes. 

In an ecommerce context, you’re often on the receiving end of freight shipments. When suppliers send truckloads of inventory to your logistics facilities via freight shipping, your team inspects, unloads, and stores the items. 

Small Parcel Shipping

Parcel shipping involves smaller, individually packaged orders—usually under 150 pounds—that carriers like UPS, FedEx, and USPS handle through their standard networks. This covers the majority of ecommerce orders, from clothing and electronics to household goods and subscription boxes. 

While parcel shipping is vital for fast delivery and customer satisfaction, it’s also one of the most expensive parts of running an ecommerce business. Before carriers pick up packages, your fulfillment teams have to do a lot of work picking and packing items, and the costs of labor and technology add up quickly. Then there are carrier rates (and surcharges), which increase every year. 

The good news is that with the right technology and cost-saving strategies, you can make parcel operations much more efficient and affordable.

Since most ecommerce businesses depend on parcel shipping for order fulfillment, that’s what we’ll focus on for the rest of this article.

Other classifications

Beyond freight and parcel, shipping operations can also be classified in several other ways depending on what you’re moving and where it’s going.

• Domestic vs. international. Domestic shipping involves deliveries within one country, while international shipping crosses borders.
• B2B vs. B2C. Business-to-business (B2B) shipping generally consists of larger, recurring orders with predictable schedules. Business-to-consumer (B2C) shipping focuses on deliveries to residential addresses.
• Specialized. Certain products—like perishable foods, hazardous materials, or time-sensitive goods—require special handling, packaging, or carrier services.

Core processes in shipping operations

Parcel shipping operations include every step used to get a finished product into a consumer’s hands. In this section, we’ll break things down into four phases: order receiving, order processing, fulfillment, and shipping. 

1. Order receiving

Order receiving is where shipping operations begin. This step connects procurement, warehousing, and inventory management to your online store. 

When a customer places an order, you confirm that the item is in stock and available to ship before processing it. If inventory levels are inaccurate, you risk overselling or delaying shipments. 

Warehouse staff keep order receiving running smoothly by maintaining accurate counts and syncing stock data with your ecommerce platform or order management system. Many businesses use real-time inventory tracking tools or warehouse management systems (WMSs) that automatically update stock as items are received, picked, or returned.

2. Order processing

Once inventory availability is confirmed, the order processing stage begins. 

Here, you verify order details—like shipping address, payment status, and item information—and check for duplicate or combined shipments to the same address. 

You also decide which fulfillment center or warehouse should handle the order based on location, delivery speed, and cost. For example, if a customer in Texas orders a product stocked in both California and Tennessee, it likely makes the most senst to choose Tennessee to minimize transit time and shipping cost. 

At this stage, automation plays a major role. Order management systems (OMS) and shipping platforms can automatically route orders and assign shipping modes (parcel or freight), reducing errors and saving time.

3. Fulfillment

Fulfillment is the hands-on process of getting an order ready to ship, including picking items from storage, packing them, labeling packages, and preparing them for carrier pickup. 

Some businesses also handle kitting or light assembly during this step.

For international shipments, the fulfillment stage also involves preparing customs documentation and making sure all regulatory information is accurate and attached. 

Efficient fulfillment depends on organized workflows, quality control checks, and automation tools that minimize movement and reduce packing errors.

4. Shipping

During the shipping stage, orders leave your facility and move through carrier networks to reach customers. This step includes selecting carriers, generating shipping labels, and scheduling pickups for last-mile delivery. 

While some businesses manually choose carriers and purchase labels for each package, others save time and money by automating the process with a shipping API that automatically connects with lots of national and regional carriers.

The shipping process doesn’t end once packages are on the road. Sellers are responsible for providing real-time tracking information to customers, allowing them to monitor shipment progress. 

Finally, proof of delivery confirms when a package reaches its destination. If a delivery fails or a package gets damaged in transit, exception handling processes kick in—rerouting packages, issuing replacements, or filing insurance claims. 

Common challenges in shipping operations

In the table below, you’ll find some of the most common shipping hurdles businesses face, as well as ideas for overcoming them.

Regulatory compliance	Shippers are required to follow customs rules, local laws, and carrier-specific regulations, and noncompliance can lead to fines, delays, or confiscated goods.	Use compliance software, stay up to date on regulations, and train staff on documentation requirements.
Risk management	Packages are vulnerable to damage, theft, and delivery delays.	Invest in proper packaging, secure handling procedures, and shipping insurance.
Outdated technology	Manual processes and disconnected systems make it difficult to track shipments, measure performance, or automate repetitive tasks.	Adopt automation, tracking tools, and analytics platforms to streamline operations and gain actionable insights.

Best practices to optimize your shipping operations

The key to optimized shipping operations is transforming complexity into simplicity. 

And it’s easier than it sounds! 

You just need the right people, processes, and technology. 

Following these best practices will help you streamline operations, reduce wasted time and money, and delight your customers. 

Choose the right carriers

When it comes to carrier selection, price is top of mind for most ecommerce businesses—for good reason. 

To get the best deals, we recommend using rate shopping software like EasyPost to compare costs for each shipment, automatically taking into account weight, dimensions, destination, and delivery speed. The EasyPost Shipping API provides fast integrations with national, regional, and local carriers, making it easy to find the best rate for every package you send. 

But while cost is a crucial consideration, you can’t sacrifice reliability to get a good deal. If you do, your customers definitely won’t thank you. To gauge reliability, look at a carrier’s track record.

How often do they deliver on time, and how frequently do packages arrive damaged? Balancing cost with service quality ensures your customers get fast, safe deliveries without eating into your margins. 

Automate processes

Automation reduces manual work and keeps mistakes from creeping into your operations. Tasks like order processing, label generation, and picking can all be streamlined with a WMS or shipping platform,  speeding up fulfillment and freeing staff to focus on higher-value tasks.

When getting started with automation, start by focusing on repetitive, high-volume processes that are most prone to errors. 

For example, integrating a shipping API with your ecommerce platform is a good first step, since it’s a simple change that saves time and eliminates the errors that come with manual data entry. 

Over time, you can expand automation to picking instructions, inventory updates, and even warehouse robotics to create more reliable, efficient workflows.

Track shipments in real time

Real-time tracking has two major benefits for shippers and shoppers alike:

1. Fast responses to issues. Tracking lets your team identify and resolve issues before they affect the customer. If a package is delayed, misrouted, or damaged, you can take corrective action immediately by rerouting or contacting the carrier. 
2. Peace of mind. Tracking also provides customers with transparency, reducing “Where is my order?” inquiries and improving overall experience.

To create a great tracking experience for your customers, make sure to provide an easy-to-use tracking page and automate notifications via email or SMS at key points in the shipment journey (tools like Advanced Tracking by EasyPost are helpful for this). 

Additionally, you’ll want to regularly review tracking exceptions to find patterns and implement preventive measures, such as better packaging, that reduce future problems.

Measure your efficiency with KPIs

Tracking key performance indicators (KPIs) gives you a clear picture of how well your shipping operations are performing. 

Metrics like cost-per-shipment, on-time delivery rate, and number of damage claims reveal areas where you can reduce costs or improve service. Monitoring these numbers consistently allows you to make data-driven decisions.

To get started, set up dashboards that pull data from your WMS, OMS, and shipping system to track KPIs in real time. Review trends weekly or monthly and compare against targets. If you notice spikes in shipping costs or delays, dig into root causes—like a specific carrier or warehouse process—and adjust accordingly.

“Start with one metric … [and] make sure [any] new systems that are purchased or implemented can support that one.” — Jeremy Bodenhamer

Role of the shipping operations manager

A shipping operations manager oversees the entire order fulfillment and delivery process, helping products move efficiently from the warehouse to the customer. 

Their responsibilities include managing carrier relationships, monitoring shipping performance, controlling costs, resolving delivery issues, and coordinating with warehouse, inventory, and customer service teams. 

A good shipping operations manager has the following skills:

• Strong understanding of logistics and supply chain operations
• Familiarity with shipping operations software
• Problem-solving and decision-making under pressure
• Leadership and team coordination
• Knowledge of customs, compliance, and documentation requirements
• Communication and collaboration with cross-functional teams

How modern tools can transform shipping operations

Back in the day, shipping operations mostly consisted of manual processes, consisting of legacy technology, lots of physical paperwork, or both. These days, logistics managers have access to cutting-edge automation tools that handle tedious tasks. 

Useful tools include the following:

• Multi-carrier shipping APIs
• Tracking and notification systems
• Auto-generated customs documents
• Address verification software
• Shipping analytics software
• Warehouse management systems
• Load planning software

Now is the time to adopt smarter shipping solutions

Efficient shipping means lower costs, better service, and fewer mistakes. To achieve this at scale, companies turn to shipping platforms like EasyPost. 

EasyPost is a leading shipping API provider for businesses of all sizes. With dozens of carrier integrations, rate shopping tools, automatic label generation, shipment tracking, and more, it takes the hassle out of shipping operations management. 

And because EasyPost has near-perfect uptime (99.99%), you’ll never be left scrambling during your most critical selling seasons.

Learn more about EasyPost.

Shipping operations frequently asked questions

1. What are the two types of shipping?

Shipping can be broken down into two main types: freight shipping, which is used for large loads and is often helpful in a business-to-business context, and small parcel shipping, which deals with small, lightweight boxes that are shipped directly to consumers.

2. What is the role of a shipping operations officer?

A shipping operations officer is responsible for coordinating shipping logistics, ensuring regulatory and safety compliance, communicating with carriers and clients, and overseeing documentation and scheduling.

3. How can shipping operations be automated?

The best way to automate shipping operations is to use a shipping API like EasyPost. Look for an API with carrier integrations and automatic label generation, real-time tracking alerts, address verification, and insurance options.