Picture this: Your online retail business is taking off. Your company has a high-quality, sought-after product, and customers rave about your speedy service. These achievements are yours, but not yours alone: You rely on your shipping carrier to consistently, reliably, and safely deliver your product to your customers.
Choosing the right shipping carrier for ecommerce business could make the difference between satisfied and frustrated customers. Here’s how to select the right carrier.
What is a shipping carrier?
A shipping carrier, often referred to as a carrier or delivery carrier, is a company responsible for picking up goods and delivering them to their intended destinations via various modes of transportation (truck, train, cargo ship, aircraft, etc.).
Shipping carriers vary in size and scope, ranging from small local courier services to prominent multinational logistics companies. Well-known shipping carriers include UPS, FedEx, DHL, and the United States Postal Service.
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How to choose the right shipping carrier for your business
- LTL vs. FTL
- Tracking, insurance, and scheduling
- Other considerations
While it may be tempting to spring for the biggest, most well-known name, shipping carriers vary in terms of cost, the types of packages they handle, and their delivery destinations. Different shipping carriers excel at specific aspects of the shipping process.
Here are a few factors to remember when choosing the right carrier for your business:
Multiple factors—including fuel prices, mode of transport, speed of delivery, and distance—determine carrier costs. Ecommerce customers often expect free shipping options, so finding a carrier with affordable shipping options lets you pass savings on to your customers.
Shipping carriers categorize shipments using a zone system based on the distance a package travels. The United States Postal Service, for example, lists eight zones, with Zone 1 marking the package’s origin and Zone 8 representing the farthest possible destination (more than 1,800 miles). This simplifies the pricing and service determination process.
Familiarizing yourself with the zone system and destination of your goods can help you choose a national, regional, or local carrier. If you plan to deliver internationally, enlist a carrier experienced in foreign shipments.
Depending on the location, expedited shipping may require air delivery, yet not all carriers offer this option.
Not all carriers offer weekend delivery. If your customers expect packages to arrive on Saturdays and Sundays—or holidays—enlist a carrier that can make those guarantees.
Many large shipping companies, as well as some smaller regional shipping carriers, actively pursue carbon neutrality by adopting alternative fuels and renewable energy in their logistics. If environmental sustainability aligns with your company values, consider a carrier that offers eco-friendly shipping solutions.
LTL vs. FTL
Small ecommerce stores that need to ship smaller amounts of goods at a quick rate rely on LTL, or less-than-truckload, shipping. Since their cargo doesn't fill an entire truck, this practice allows business owners to share space with other parties, which reduces costs. The carrier must stop at multiple dropoff points, however, which could slow delivery times.
In contrast, FTL, or full truckload, involves more significant quantities of cargo that fill an entire truck, often used when a single customer has a substantial amount of freight to transport.
Tracking, insurance, and scheduling
Most carriers offer shipping insurance and automated tracking systems for customers to check the status of their deliveries. However, according to a 2021 Bringg survey report on tracking shipments, only about 20% of carriers currently offer customers scheduling options to choose their preferred delivery date and time.
Is your business shipping fragile items? Do you require refrigeration or special packaging? Are your goods perishable? Check with potential shipping carriers to ensure they accommodate outside-the-box requests while guaranteeing reliable service.
The top shipping carriers for ecommerce businesses
In 2021, the world saw a rate of approximately 5,000 parcels shipped every second, and industry experts expect this parcel volume to reach 256 billion annually by 2027.
Given this demand, many shipping carrier options are available. Here are a few of the top shipping carriers in the US:
United Parcel Service (UPS)
Known for its signature brown trucks, UPS offers nationwide and international shipping options, freight shipping for larger deliveries, and flat rate shipping, which allows you to ship using your packaging with a fee based on size, weight, and shipping speed. UPS also offers to deliver packages to thousands of UPS Access Point locations nationwide.
Flat rate shipping starts at $10.20 for an extra small package, while extra large packages start at $26.05, according to UPS. Establish a contract with UPS for daily pickups from your warehouse or storefront and pay for a daily rate determined by the delivery destination.
If you ship less frequently without a UPS account or contract, opt for delivery via a UPS retail location, like the UPS Store or a UPS Customer Center. These retail options offer rates based on shipping speed, location, package dimensions, and weight.
UPS offers same-day and next-day delivery options, delivery guarantees, detailed tracking services, and Saturday delivery.
FedEx provides LTL and air shipping, and freight shipping for packages over 150 pounds. It also offers temperature-controlled shipping options and complimentary packaging testing to ensure your products arrive undamaged.
FedEx ships internationally to more than 220 countries and territories. It offers ground shipping within one to three business days in the contiguous US. Frequent shippers can open an account and access free envelopes and boxes. FedEx also provides 12 free flat-rate shipping packages, with delivery fees starting at $11.10.
Fedex offers detailed tracking services, overnight delivery, and Saturday deliveries.
United States Postal Service (USPS)
An independent agency of the federal government, the USPS is the only delivery service that reaches every address in the US—around 160 million residences. In addition to its domestic shipping expertise, USPS ships to more than 180 countries worldwide through partner carriers.
USPS can also ship packages directly to local post offices and PO boxes, allowing free and straightforward customer pickup.
USPS offers a wide range of shipping options, from First-Class Mail, delivered in one to five days, starting from $1.35 for large envelopes, to next-day Priority Mail Express, starting at $28.75. USPS also offers a flat rate option, starting from $9.65 for envelopes. The carrier also allows you to use your own packaging, which starts at $9.35.
USPS offers downloadable shipping software so you can pay for postage and print shipping labels quickly and conveniently from anywhere.
Several USPS shipping options, such as Priority Mail Express, Priority Mail, and USPS Ground Advantage, include $100 of insurance.
Based in Germany, DHL partners with USPS to provide last-mile delivery across the US. For those shipping internationally, the carrier covers 220 countries and more than 120,000 locations around the globe.
DHL’s residential delivery options start at $5.80, and the carrier offers express shipping services for next-business-day deliveries of packages up to 154 pounds. DHL provides the option to pay extra to reduce the carbon emissions from your shipments.
With a DHL business account, you can access tools like the carrier’s on-demand delivery system, allowing you to choose exactly when and where it delivers a shipment.
Shipping carrier FAQ
Is USPS a shipping carrier?
Yes. The United States Postal Service is both an agency of the federal government and a shipping carrier accessible to the general public and private businesses.
Who are the best shipping carriers?
There is no single best shipping carrier—only the best shipping carrier for your business and shipping strategy. This varies based on the frequency and volume of your shipment, your and your recipient’s locations (domestic versus international shipments), the size of your parcels, and if you need fast shipping.
How do shipping carriers calculate shipping costs?
In general, major shipping carriers calculate shipping rates based on whichever is greater, the package weight or its dimensional (DIM) weight. Determine DIM weight by multiplying the package’s length, width, and height, then dividing by a DIM divisor (a number set by major carriers representing cubic inches per pound).
Can I negotiate shipping rates with carriers?
Yes, many carriers allow negotiation for large retailers. However, to negotiate shipping rates, you need to make an account with the carrier and contact your account manager.