Shipping Rate Increases: How This will Affect Retailers This Holiday Season | Radial

Shipping Rate Increases: How This will Affect Retailers This Holiday Season

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The spike in shipping demand isn’t just causing backlogs. It’s also pushing carriers like UPS and FedEx to raise their rates. When shipping with the United States Postal Service, these rates have risen by up to five dollars.¹ And at FedEx, rates have nearly doubled.² 

Not surprisingly, these major price hikes will wreak havoc on retailers and eCommerce businesses once peak season is in full swing. Here’s what that will look like if you do nothing to prepare over the next few weeks. Plus, we’ll offer one simple solution to help you offset the cost.  

The Unpleasant Reality: Someone Has to Foot the Bill  

When carriers raise rates significantly, retailers are traditionally left with two options. Either absorb the cost themselves -- which means the bottom line takes a direct hit. Or shift the bill to the customer and risk that they’ll leave for a competitor -- in which case, the bottom line will still take a hit.  

It’s a no-win situation. And in many cases, it’s difficult to know which scenario would cause fewer problems for the business. 

Fortunately, by adopting an omnichannel order management solution like Radial, it’s possible to minimize the effects of this conundrum, no matter which option you choose. Here’s how:  

Kit and Bundle Orders Together 

At Radial, we enable your organization to easily kit and bundle orders together to minimize the number of packages you have to send out. For example, rather than shipping three separate packages to get a sweater, pair of socks, and dress to a customer, you can package all of these products into the same box.  

While this will naturally increase the weight of the single package, it will cut down on the pre-packaging costs and baseline costs per package (like size) that you’d ordinarily deal with.  

Track SKUs 

In addition to consolidating orders into a single box or bag, Radial can also bring down your shipping costs by helping you track your SKUs. How does that work? By ensuring that no companion SKUs, like gift-with-purchase items, are shipped out if the regular SKU is unavailable.  

This gives you more control over your shipping costs, as you won’t end up paying exorbitant shipping prices for tiny bottles of lotion or a single bracelet. The item will stay in your warehouse or fulfillment center until it can be packaged up with the product your customer originally purchased.  

Alternative Fulfillment 

One of the most overlooked, but helpful, solutions to the shipping cost conundrum is to minimize the distance packages have to travel. With Radial, you can accomplish this in a few different ways.  

First, you can keep tabs on inventory across your organization to make sure you ship products from the closest fulfillment center available. Knowing where the second and third closest warehouse is located is especially important as inventory levels start to dwindle in popular locations. You can also tap into alternative fulfillment options like ship-from-store and curbside pickup to decrease costs you might’ve paid to ship the item from further away.   

Either way, by minimizing the number of miles a product has to travel to get from your warehouse to your customer, you can also minimize expenses.  

Whether you run a full-fledged eCommerce business or simply deal with an uptick in eCommerce sales during the holidays, shipping products from warehouse to doorstep will be expensive this holiday season. Luckily, by working with Radial, you can tap into alternative fulfillment options, track your SKUs, and kit and bundle orders together, thereby successfully reducing the cost you and your customers need to pay.  


Sources:

¹ “U.S. Postal Service Proposes Hiking Shipping Rates During Holiday Season,” Total Retail, August 2021 
² “FedEx Announces Peak Surcharge Increases for the Holiday Season,” Total Retail, August 2021 

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