If you’re a small business owner or ecommerce manager, shipping can be a serious thorn in your side. Does it really matter how rock bottom your prices are if consumers get sticker shock when they see the shipping information?
Capacity is key when calculating shipping rates, because it’s what ties directly to a company’s revenue. If capacity exceeds demand, competition comes into play in the shipping industry and you, the business owner, will benefit.
The good news is that competition among shipping companies is currently fierce, so now’s the perfect time to restructure your company’s shipping MO. Shipping firms are scrambling to cover fixed costs, which means day rates are declining. Some of the biggest shipping companies, like Navios Maritime Partners LP and Safe Bulkers Inc., are using idle ships, and dry bulk capacity is up from last year.
Just the facts
Dry bulk capacity is up almost seven percent compared to last summer, according to IHS Global Limited. At the beginning of 2013, year-over-year capacity was down 10 percent, but that seems to be an isolated stumble in an overarching trend of growth.
This is great news for the dry bulk shipping industry. One international shipping company — RS Platou — is also citing a slower growth of 4.5 percent during the first quarter of 2013. Overall, this leads to stagnating shipping rates since supplies are up.
Researchers say that economic growth will strengthen toward the end of 2013, but shipping rates are expected to remain at a plateau for a while longer. Simply look at the sky-high Chinese interbank repo rate for an example of how international markets are affecting shipping rates in the US.
No matter where your company ships, you should make sure you’re getting the best deal.
Tips for lower shipping rates
It’s time to make the most of your business savvy and start researching options. If you provide international shipping, you have a bevy of carriers to choose from, but don’t accept the figures you see on their website as fact. Many shipping companies are happy to negotiate and/or offer discounts they may not openly advertise. Talk to a real person and ask about discounts or ways to save.
The more volume you ship per month, the lower your rates could be. This is how mega retailers like Walmart offer free or seriously low-cost shipping to customers. If you’re not quite at the Walmart level yet, you might still be able to get a lower rate just by asking. Discounts might be available for nonprofits, local businesses, or those that have a green orientation.
Keep tabs
You or your accountant should know exactly how much you spend on shipping each month. But it’s not just the price of the stamp that matters. Your time, effort, and materials for packaging items and taking them in for delivery all have an impact on the bottom line.
If a shipping company offers free pickup, calculate how much that could save your company. In some instances, international shipping or sending smaller pieces might not be profitable for you; make sure you know all the easy ways to save money on shipping with any company.
To find a good shipping company, check its track record and reviews, and talk to a live person to get a sense of their customer service. They should be flexible and work toward making you happy, not just booking another client.
Shipping is an integral part of any ecommerce or bricks-and-mortar operation, and you should have a company you trust in your corner. Whether you ship throughout the day every business day, or just a couple of times per month, a reputable shipping company can save you money, time, and effort.
Originally posted on July 22, 2013 @ 2:16 pm