Parcel Shipping: A Guide for Small Businesses

In the face of the COVID-19 pandemic and the lockdown’s impact on businesses, e-commerce became the saving grace that helped small businesses not just survive but even thrive. Now, many of the changes created or furthered by the pandemic have continued as we’ve collectively adapted to that idea of “a new normal.”

The pandemic provided a warning of what can happen to a business and showed the need to adapt. Since the pandemic, 67 percent of Canadian small businesses are accepting online payments now, with 47 percent beginning this practice since COVID was designated as a global pandemic. When small businesses turn to e-commerce methods, small business packaging and shipping become integral to operations.

In this strange new world continually reshaped by changes to legacy carriers, labor shortages, and technological innovations, it’s an excellent time to go back to shipping basics to determine the best packaging, carriers, and modes. Shippers need to get up-to-date on the latest strategies and techniques for parcel shipping, including choosing the best carriers and using a tech-enabled parcel management software system.

What Is Parcel Shipping?

Parcel shipping is the term for the shipping of relatively small packages weighing up to 100 pounds. The packages are small and light enough that a person can generally pick them up and move them without assistance. Small business packaging and shipping often fall under parcel shipping.

Parcel shipping often works well for small businesses that ship a number of small packages rather than needing to ship freight. Numerous carriers work with parcels. The main legacy ones are USPS, UPS, and FedEx, although there are other options. It can be challenging to compare and choose a carrier for parcel shipping, so this guide is designed to help.

Understanding Your Parcel Shipping Needs

Shippers need to consider a few basic metrics before deciding which carrier is suitable for them. These are the top metrics to explore:

• Shipping Volume: Shippers should take stock of their average shipping volume. Is the expectation to ship a few packages each month or manage a larger volume of 100 packages or more weekly? Once the shipper knows the expected shipping volume, they can find the right business plan with a carrier, as carriers have a range to fit different needs. Then, it’s always possible to switch to a different plan if needs change in time, knowing in advance which plans are available to strategize for growth.
• Weight: Another step is determining the average weight of the small business’s products. Postal scales are a helpful tool for small businesses to find out the weight of their packages and see how that impacts pricing. Shippers can then compare shipping costs by weight with different carriers and consider whether flat-rate pricing is an option and a better alternative.
• Priority: Another consideration is the best shipping method for each company. Shippers can choose from ground, first class, priority, and other shipping options. They should consider the types of items they usually send, common destinations, and customer expectations when determining the best method. Looking at the domestic zoning map can help. Also, shippers should consider whether it might be best to switch between multiple shipping methods depending on each situation or offer customer choices at different rates.
• Destination: Small businesses need to determine whether they will only ship domestically or whether they will expand to offer international shipping. They should clearly communicate their shipping destinations and the methods used for each.

Which Carrier Is Right for You?

The leading parcel shipping carriers are USPS, UPS, and FedEx. Which one is best when shipping for small businesses? Really, it comes down to which is best for each small business or even for the needs of each shipment. This part of the guide can help small businesses compare the three main parcel carriers to gain a clearer idea of the pros and cons of each.

FedEx

FedEx can be a good choice for small businesses looking for expert tracking and large, express shipments.

Pros:

• Good for large shipments
• Offers Saturday deliveries
• Strong tracking capabilities
• Good with express options

Cons:

• Finding an office is less convenient
• Costs can be higher
• Package pickup costs extra

UPS

UPS may be a wise choice for excellent package tracking, quick shipments, and sending heavy items.

Pros:

• Good and cost-effective for large and/or heavy packages
• Has a quick international reach
• Guarantees express shipping
• Strong tracking capabilities

Cons:

• May not be the most affordable option
• Extra costs for delivery on Saturdays
• Package pickup costs extra

USPS

USPS tends to be best for sending small or lightweight packages, for cost savings, and free package pickup.

Pros:

• Strong for quickly shipping small and/or lightweight packages
• Affordable
• National shipping with good last-mile delivery to mailboxes and P.O. boxes
• Delivers on Saturdays
• Offers free package pickup

Cons:

• Tracking capabilities not as strong as others
• Customer support is lacking
• Poor consumer ratings and reviews

In addition to considering how these pros and cons impact a business’s needs, shippers can look into the specific services and business discounts each carrier offers. Once they know their needs, small businesses can directly compare similar services between carriers. For instance, they can compare pricing, timeframes, and locations covered for ground shipping. In addition, they can check additional value-added services offered by each carrier to see if they may make a difference.

The Challenges of Parcel Shipping for Small Businesses

For small businesses that may not have enough dedicated resources or employees to put toward shipping, parcel shipping can become complex and even unmanageable. This is especially true when the company begins to scale or during temporary boosts in sales.

Common challenges associated with shipping for small businesses include:

• Visibility: It can be difficult for small businesses to maintain visibility over increasingly complex parcel operations, which are impacted by external factors and fluctuations in inventory, sales, and other factors.
• Communication: It’s often a challenge to communicate with carriers in the case of exceptions. This problem could escalate as recent layoffs at legacy carriers, including UPS and FedEx, could cause overburdened supply chains, contributing to increased exceptions.
• Exceptions: Small businesses may find it challenging to catch exceptions, submit claims, and receive compensation when exceptions occur.

How Parcel Management Software Helps Small Businesses Build Resilience in Parcel Shipping Operations

Technology is one of the tools small businesses can use to improve their parcel shipping processes. It can help shippers manage the challenges they face in their operations, with carriers, and in dealing with a post-COVID world. In particular, parcel management software offers benefits like these:

• Visibility: Small businesses can gain real-time visibility of their parcels, which helps them better manage their operations, ensure packages arrive on time and share information with customers. Real-time visibility also provides additional benefits like catching exceptions, providing data that can be analyzed and used toward business decisions, helping them be more proactive regarding problems, and creating better collaboration within a supply chain.
• Communication: Small businesses can use this software to optimize their logistics network, which, among other benefits, allows small businesses to manage their carriers and services better and communicate better with carriers.
• Integrated Freight Auditing Processes: Small businesses can integrate freight auditing processes with other parcel management software, providing many benefits. Automated freight audits can catch exceptions to prevent overpaying, provide essential data that can be used for insights, and inform improvements to shipping processes.

Streamline Small Business Packaging and Shipping

Parcel shipping is a good option for small businesses that ship small, lightweight packages. There are numerous considerations when determining the best ways to ship parcels and the best carrier for the job. In many cases, using more than one carrier within a more extensive carrier network is best. Following the advice in this guide can make the decision process easier. Also, parcel management software can facilitate these decisions through improved visibility, carrier comparisons, communication, and more.

Intelligent Audit offers a range of solutions that can help small businesses with their parcel shipping, including:

• Logistics Network Optimization: Helps manage a carrier network and find the best carrier and services for various shipping needs
• Freight Audit + Recovery: Automates audits of invoices from carriers to double-check accuracy and catch discrepancies, as well as collect helpful data and find areas for improvement with parcel carriers
• Business Intelligence + Analytics: Provides real-time data to improve visibility and carries out analytics that contributes to essential business insights and decisions, including using data to compare carriers
• Secure Carrier Payments: Improves the payment process with carriers according to each carrier contract, and catches invoice discrepancies

Get started with Intelligent Audit today to improve your small business’s parcel shipping processes.

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