5 Hidden Shipping Costs and How to Avoid Them

Advice from an industrial shipping expert.

Shipping, warehouse

When it comes to shipping, a lot of little costs can lead to big expenses. And the greater your volume, the faster these hidden shipping costs add up.

Eric Wenzel, Field Sales Director for Staples Industrial Shipping Supplies, points out five inefficiencies that can drain money from your shipping operations. These are areas you may not even think about — but, fortunately, they're also relatively easy to adjust.

Here are the top five culprits:

1. Looking at Cost per Roll Instead of Cost per Use

"Choosing the right packaging supplies will ensure that your cost per use is minimized," Wenzel notes. A simple example: You may buy 2-inch tape to seal packages to save a few dollars, but you will likely end up using more of the tape to secure each package. Buying 3-inch tape is slightly pricier, but you use less of the material per parcel. A wider tape makes it easier for operators to seal the seam of the box. This means they are less likely to use two, three or four strips of tape on a box, as they only need one with the right tape.

The same principal applies to other materials: Make sure you're buying the proper cushioning to match each package's needs. Less-expensive materials may not always be the best path to savings if you have to use more of them or if you risk damage to the item en route. Think about the snowball effect of a damaged product — it results in returns, lost sales, extra processing, etc., which can end up costing far more.

2. Not Factoring in Dimensional Weight Costs

Be aware of what size box you are using to ship your items, because it might be costing you more.

Shipping costs are based on the package's dimensional weight — a measure that takes the box size into account. This number is compared to the package's actual weight to determine a final shipping price. By using the right sized box, you can ensure that you aren't overpaying to ship your package to its destination.

The formulas used to perform these calculations are available on shipping companies' websites or in your shipping contract. Read up on them to find box sizes that allow you to lower dimensional weight.

3. Doing Everything by Hand

Many shipping tasks, from wrapping pallets in stretch wrap to taping up boxes, can be done by machines.

Automating your shipping operation brings a couple of major benefits.

  • Machines work more efficiently and precisely, trimming supply costs. As Wenzel notes, a stretch wrap machine can get as much as 200 percent more length out of a roll of wrap than a person doing it by hand.
  • Machines are simply faster, freeing up your staff for other tasks.

In most warehouses, there's typically a machine that could make your shipping operations more efficient. And the efficiencies you gain will quickly offset the cost of purchase: "Oftentimes, customers who invest in packaging machinery will realize their full return on investment within the year," Wenzel says.

4. Disorganized Pick-and-Pack Process

An inefficient shipping operation takes time, and time is money. The minutes it takes to fetch labels, assemble boxes and other supplies can quickly add up to hours of wasted time.

Look at your shipping setup and consider where you can cut down on the time it takes to put everything together. Are the supplies kept near where they're used? Is each stage of the packing and shipping process executed in close proximity to the next? Make whatever changes are necessary to speed up the process.

5. Using the Right Cushioning for the Wrong Reasons

While you want to use quality materials to protect your shipments, it's possible to go overboard. Take bubble wrap, for instance. Ask yourself: Do you really need to stuff the entire box with bubble wrap? Is there a cheaper way to protect the product?

It's a good idea to wrap your product in bubble wrap, but you can fill the void of the box with crumpled kraft paper or air pillows. This will dramatically decrease your cushioning expenses, while still protecting your product.

Whatever shipping costs you decide to tackle, remember to talk to your supplier for guidance and expert advice, Wenzel recommends. Consider your supplier a resource, and ask for a consult and new ideas.