Four ways retailers can prepare for rising shipping costs. 

Riz Datoo
Riz Datoo Feb 23, 2023 • 4 Min read
solutions for rising shipping costs in 2023

This year some of the largest shipping carriers, like UPS, FedEx, and Canada Post are increasing their shipping rates by up to 9%. The rise in international shipping rates will cut into the profits of many retailers and challenge them and their customers to adjust their preferences and expectations. It’s no surprise that many retailers will begin charging for shipping this year. Brands like H&M are even considering passing returns costs onto their customers. Understandably, brands will adjust their customer experience to reduce the impact shipping costs can have on their bottom line across the end-to-end customer journey, from purchase to returns.

reduce the impact shipping costs

As rising costs continue to pinch profits, there are many ways to cut costs and improve efficiency. We’re sharing four ways to save money on international shipping costs so you can keep your customers happy: 

  1. Review and negotiate shipping contracts 

Major carriers offer shipping discounts to retailers of all sizes; you just need to ask. Now is the perfect time to reach out to your carrier partners to discuss your current rates and negotiate discounts and bulk pricing to ensure you get the best rates possible. If you have large shipping volumes, you will have more leverage to negotiate for better freight rates - but don’t be discouraged if you have lower volumes; at the end of the day, carriers want your business and would rather fill up their trucks, planes, and ships at a lower rate than leave them half-full. 

The initial rate a carrier offers you might sound appealing, but there are plenty of ways to ask for discounts. Remember to negotiate fuel charges, accessories, freight rates, shipping modes, and more. 

  1. Shop around for the best rates 

When it comes to international shipping rates, the more variety, the better; you’d never get married after the first date, and you shouldn’t settle with one carrier without shopping around, either. Contact multiple carriers and compare their rates, options, and shipping methods, such as ground and air. Better yet, use a 3PL-like eShipper to get multiple shipping options from major carriers, all in one place. Looking at a variety of rates, promotions, and services gives you a much clearer idea of what options are available to you and brings you closer to finding the best deal that suits both you and your customers. By shopping around and comparing options, you might even find a shipping option that gets your products in your customers’ hands faster and for less.

  1. Reduce the number of items you ship

One area that is often overlooked but can significantly impact your bottom line is the cost of return shipping. On average, 20%-30% of online sales result in a return which means brands are usually budgeting anywhere from $10-$20 on return shipping labels alone. One recommendation to reduce the shipping cost is to reduce the number of returned items shipped from the customer back to your warehouse or 3PL - this can be done by offering free drop-off returns. 

Using a solution like ReturnBear, which offers end-to-end return management with access to convenient drop-off locations across Canada, will help you reduce the number of parcels you ship and significantly reduce your cost of return shipping by over 60%. 

Returns and exchanges are completed within 90 seconds at the ReturnBear drop-off location - talk about convenience! It’s a win-win for you and your customers; you will save on shipping label costs, and your customer will get an easy return process that eliminates the pain of printing shipping labels and packing the return. You’ll also have access to an end-to-end return management system which includes white-glove onboarding, setup of the ReturnBear app, and customization of your return policy automation.

  1. Reduce the weight of packages 

The dimensions and weight of a package can unnecessarily drive up shipping costs. It might seem minuscule, but when it comes to shipping, every millimeter counts! Depending on the volume of packages and shipments you’re processing, the costs can add up quickly. Brands like Dell and AllBirds have reduced their packaging materials and

Ways to reduce Shipping cost eShipper

shipping costs by minimizing inserts, keeping packages as small as possible, and standardizing their packaging so that different variations of products can fit into the same box. By optimizing the items included in your box or package, you can simplify your customer's unboxing experience and reduce the weight of your package, which will reduce your label costs. 

2023 will be a transformative year for many businesses as external forces, like shipping carrier price increases and shifts in the economic climate, force retailers to revisit their market strategies. It’s essential to find opportunities to cut costs and reduce spending while keeping your customers at the center of your business. Retailers that put the customer first will continue to thrive. One approach to cutting costs and improving customer experience is to reduce return international shipping costs. Reach out to our partners at ReturBear to learn more about how you can reduce your return shipping cost, improve customer satisfaction and save time on managing returns. 

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