How do couriers charge retailers for shipping?

2022-02-15

Written by Starshipit

In the following blog we answer the most frequently asked questions by our customers, online retailers from around the world, who are looking for information regarding courier services and how they charge businesses for shipping.

When looking for courier services, always remember to check if the courier operates in your chosen locations and if they have experience shipping products for online retailers like yourself.

What factors affect shipping costs?

Consider these four main factors when approaching a courier service as they have a direct impact on costs:

  • Pricing structure
    When researching different couriers, it’s always good to compare rates with a number of different providers to find one that best suits your business and the type of product you sell. Its likely you can negotiate discounted rates when you ship a certain threshold.
  • Services offered
    You may want to offer a range of services at checkout such as Express, International Shipping or Same Day Delivery. To begin with you might want to use the same courier for all the services or you might want to consider using different couriers for different services as you scale. If for example you sell food items that need to be chilled then you will need to enlist a specialist courier.
  • Customer support
    What level of service does your business require? Do you need customer support on standby via phone call or perhaps you require direct communication with the driver? The courier’s quality of service directly impacts your brand’s reputation, so always read customer reviews and ask what level of support they offer.
  • Specific requirements
    It’s important to state upfront if your products require specific handling. For example, some cosmetics are classified as dangerous goods or restricted commodities and the courier must adhere to relevant shipping regulations. Or if you’re selling large bulky items that require a tail-lift, you need to consider these additional charges when researching different courier services.

What is deadweight, volumetric and cubic weight & how does it impact my shipping charges?


The dead weight is the physical weight of your product. Place the package on the scales and this is your dead weight.

Volumetric weight / Cubic weight / Dimensional (DIM) weight is the parcel’s volume and this is used to determine how much space the parcel will take up in the courier’s van/aircraft.

So how will you be billed?

That will depend on the contractual agreement that you have with your courier, so they’ll be best placed to advise you on how you will be billed.

Customers often find that couriers will look at both the dead weight and volumetric weight, and then take the higher value out of the two.

Remember, when measuring odd-shaped parcels, measure the width at 90 degrees to the length measurement.

Measure the parcel where it is: L(ongest), W(idest), H(ighest).

Volumetric weight for international shipments is calculated using the formula below.

Length x Width x Height in centimetres / 5000 = Volumetric Weight in kilograms rounded up to the nearest 0.5kg

Length x Width x Height in inches / 138.4 = Volumetric Weight in pounds rounded up to the nearest pound

DHL's volumetric calculator

Are there any additional costs to consider when shipping internationally?


For online retailers wanting to ship internationally, here are some key considerations for when you start to think about expanding your business beyond your domestic market. Start by researching different services for international shipping. Its likely your domestic courier will offer an international option, and there are also premium options with couriers such as DHL Express who are a global international shipping provider. The main difference will be speed, and the faster the delivery time the more expensive the shipping will likely be.

Checking the tax regulations of the locations you're sending parcels to. For example, if you are shipping to Europe, you will need to comply with EU Tax requirements.

You’ll also need to investigate and prepare any additional documentation that is required by the receiving country. For example some products will require country of origin certificate or a prescription, there are also special requirements for dangerous goods.

When it comes to cross-border shipping, it becomes even more important to update your customer along the post-purchase journey.

Ensure you are able to offer seamless cross-border tracking with regular branded tracking notifications to reassure them their order is on track for delivery. It’s important to be proactive by managing customer expectations if there are changes in the delivery schedule.

Also, consider how you’ll manage returns. Have a clear returns policy and provide additional instructions for customers wanting to make returns from overseas.

Finally, it is important you take measures to avoid penalties for non-deliveries, so ensure you validate addresses before you print your shipping labels. If you use fulfilment software like Starshipit, this is an automated process.


How to book a pickup with a courier for your orders?

The pick-up process is different between couriers and retailers will often need to have a collection contract if they meet the criteria, which is usually a minimum volume per day. Always speak to your account manager at the courier company to discuss the various pickup options available.

For example, Australia Post’s MyPost Business provides pick-ups for only certain locations and it includes additional charges. With Royal Mail, you can easily book online and it will only cost 60p.

Learn:

How to book a courier pickup within Starshipit

There are certain couriers Starshipit can book pickups with or trigger a pickup on label print.

Currently, you can book a pickup within Starshipit for DHL Express, Couriers Please and TNT.

After you have generated your labels. Always make sure the following information is given when booking a pickup:

  • Number of packages
  • Total weight of packages (kg)

The Starshipit team will also be able to advise you on the different options when setting up your account.

How can you benefit from having a courier account vs using a broker? (even if you don’t ship many orders now)

Holding your own courier accounts is a great way to future proof your business, and most couriers require little to zero technical setup.

If you use a multi-courier automation platform, like Starshipit, you can track all your orders for multiple couriers from a single dashboard. This is because Starshipit receives the native tracking number from the courier.

If you use an aggregator platform, a courier broker, sometimes you will only receive the broker’s ‘tracking number’ (not the courier’s native tracking number), so you can’t track your order via the courier’s website or receive updates.

Read more about aggregators (brokers) vs enablers (multi-courier automation platforms).

Courier integrations tutorial

What are the benefits of using multiple couriers?

By holding accounts with multiple couriers, you ensure you’re always getting the best price.

Many customers hold multiple accounts to offer options at checkout e.g. Express, Same Day Delivery, International) or variable product sizes.

Some couriers require certain order thresholds and others require retailers to ship all parcels with only them.

With Starshipit, you can easily compare rates or use rules to ensure the cheapest option is selected.

Summary

To wrap up our frequently asked questions by our online retailers, a good anchor during the courier-selection process is to always come back to what your customers are looking for. The courier services you choose and how they charge for these services will come down to what works best for them.

How your business can manage multiple couriers via Starshipit

Starshipit’s plug and play solution integrates with your eCommerce, inventory management software and over 40 couriers.

Whether it’s dispatch, checkout, or post-purchase customer engagement, Starshipit’s feature-set automates every step of the fulfilment process.

Book a call with our Success Team to help you ship the smart way, so you can grow faster.

Start your FREE 30-DAY TRIAL.

Starshipit

Starshipit

Starshipit is the best practice shipping and fulfilment platform that helps retailers save time and deliver great shipping experiences.

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