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Shipping Methods 2024: Guide to Cost-Effective Ecommerce Delivery

sahil bajaj

Sahil Bajaj

Senior Specialist - Marketing @ Shiprocket

December 18, 2023

7 min read

Shipping methods are changing the way businesses operate. Shipping connects them directly with their customers. The global logistics and shipping industry is growing at a CAGR of 17.8% and is likely to become a USD 626.23 billion market by 2023. Factors such as automated delivery services and more warehouses for order fulfillment are changing shipping methods. With the proliferation of eCommerce sites, customers prefer specific shipping methods and are mostly likely to move on if your business offers a different preference. As a result, your shipping method and the carrier who partners with your business become important. 

Now is the time to change the shipping approach of your business. To help you choose the correct shipping approach, let us discuss the different shipping methods.

Different Shipping Methods

How Does Shipping Work, Anyway?

Let us look closely at these stages of shipping:  

1. Order Placement: When a customer places an order online, the shipping process begins. Most eCommerce platforms offer free shipping to attract customers.

2. Order Processing: In the warehouse, the order is picked up, packed and labelled at the warehouse or fulfillment center.  

3. Carrier Selection: The shipping partner or carrier who offers the fastest delivery in the shortest time and the best shipping price is selected. 

4. Shipment Pickup: The shipping partner collects the packaged order for shipment from the fulfillment center.

5. Transit: The shipping partner moves the parcel from the distribution center by air, surface transport or rail sorting facility to the customer’s destination.  

6. Delivery: The shipping partner delivers the shipment to the customer’s address.

7. Tracking and Notifications:  The status or location of the package can be tracked at any point in time through transit by both the business and the customer.  

In the eCommerce scenario, the shipping process emphasises delivery and accurate delivery. The selected carrier or shipping partner handles these two factors. The partner processes and prepares the order, and the carrier will complete the last-mile delivery of the order.

Exploring Various Shipping Methods

In the eCommerce industry, using 3PLs or third-party logistics service providers to handle end-to-end logistics is common. In such cases, the 3PL provider receives the order for shipment from the fulfillment center.  

Now that we know the different stages of the shipping process, let us look at the various shipping methods and how they can offer unique advantages.  

1. Standard Shipping: In this shipping method, packages of standard size and weight are shipped using surface transport, ocean, air or multimodal transport. This is the most common method of shipment as it is value for money since these orders are delivered in a couple of days to a week.  

The advantages of this method are its cost-effectiveness and ideal for non-urgent deliveries. The longer delivery time is its only a minus point.  

2. Expedited Shipping: This shipping method is faster than standard shipping. It guarantees delivery within three business days.

The advantage of this method is the rapid delivery of orders, which is ideal for time-sensitive orders. But this method has higher shipping costs. 

3. Same-Day or Next-Day Shipping: This method is ideal if your customer needs a delivery the same day they order or the consecutive business day. Although it drives customer satisfaction, it would be expensive to offer on all your shipments. Ideally, it should be provided in an ’emergency’ situation.  

However, if your business offers perishables like fresh groceries and similar products, you should offer this service. 

4. Free Shipping: You can consider this option when you want to promote a product. You can also view it as your business model, similar to what Amazon offers for members. 

While it attracts many customers and increases order values, burdening free shipping costs could make your business unsustainable.  

5. Flat-Rate Shipping: In this shipping method, shipping partners deliver orders at a flat-fixed rate, disregarding weight and parcel size. 

Although your shipping costs would be the same, it cannot be cost-effective for short-distance orders or lightweight orders.  

6. International Shipping: In this shipping method, shipping partners deliver your parcels to international buyers.  

This method will allow you to deliver to overseas clients but will need handling of complex customs regulations and higher shipping costs.  

Trustworthy Shipping Choices: What You Can Rely On

When it is time to choose a carrier company, keep the following factors in mind: 

  1. Shipping Costs: Ensure that the shipping charges of the carrier company fit your budget.  
  2. International Shipping: Not all carrier companies offer overseas shipping. So, it is important to offer international shipping. 
  3. Delivery experience: See if the carrier company provides value-added services like pickup location in addition to accurate and on-time deliveries
  4. Weight Limits: You will need to check if your carrier has any limitations on the product package weight. Ensure that the company is flexible with the package size and weight.
  5. Insurance: It is always wise to choose a carrier company that offers insurance on the packages.  

Comparative Analysis of Prominent Shipping Carriers

Here is a comparison of leading shipping companies:

Shipping ServiceShipping SpeedShipping Cost (USD)
FedEx
FedEx FirstOvernight 1 day164.52
FedEx PriorityOvernight 1 day128.56
FedEx StandardOvernight 2 day95.6
UPS
UPS Next DayAir 1 day143.75
UPS AIRAir 1 day98.36
UPS Air SaverAir 1 day89.5
USPS
Priority Mail ExpressExpress 1 day47.89
Priority Mail3 days11.8
Priority Mail LargeFlat Rate Box9.58

Cost Considerations

1. Negotiate Rates: You can negotiate for discounts and low shipping rates if you have high-volume shipping orders.  

2. Optimise Packaging: Compact packing is a crucial tip to manage shipping costs. It helps avoid excessive dimensional weight charges. You can save money spent on buying packaging material with efficient packaging.  

3. Shipping Software: You should use shipping software to streamline the shipping process at your business and find the best comparative carrier rates.

Utilising Shiprocket to Reduce Your Shipping Expenditures

Shiprocket is a 360-degree shipping solution that wants to optimise eCommerce sellers’ capabilities. It will help your business to streamline shipping processes and reduce shipping costs.  

  • Aggregated Shipping Rates: This is a key feature as it helps find the most cost-effective shipping method.  
  • Local Support: Shiprocket ensures quick national and international deliveries with its extensive network of collaborators.    
  • Tracking: The algorithm-driven tracking system offered by Shiprocket allows businesses and customers to track their shipments in real-time. 
  • Labelling: This feature automates order processing since Shiprocket has a label generator to quickly name and tag packages for error-free shipping.   
  • Low-Cost Bulk Shipping: Shiprocket offers low shipping charges for businesses that have bulk shipping. 

Conclusion

Shipping methods play an important role in ensuring the success of a company. A trustworthy shipping partner can change the customer experience with on-time and accurate deliveries. They can increase customer satisfaction and help win repeat customers. Hence, choosing the right shipping method is a very important step for every modern business. 

You should choose a reliable and affordable shipping partner based on the customer’s shipping expectations, your business goals and the technical efficiency of the shipping provider. Modern shipping solutions like Shiprocket optimise your shipping processes and provide an exceptional customer experience.

Which is the most cost-effective shipping method for small businesses?

Standard shipping methods offer the best value for money, and should be the first option for small businesses. 

How can I reduce the shipping costs for my eCommerce business?

You can lower shipping costs by partnering shippers with local carrier networks. You can also lower the shipping costs by negotiating bulk shipping discounts. Another method would be ensuring all packaging is compact.

What is DDP shipping? 

DDP shipping, or Delivered Duty-Paid shipping, is an agreement that the seller will be responsible for risks associated with the shipping process and additional transit costs. This shipping method is ideal for international shipping.

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