The mode notwithstanding, key shipping carriers raise their rates for most services every year. Normally, the adjusted rates do apply beginning from January. The good news is that there are ways e-commerce sellers can mitigate the increasing carrier rates? This post will look at why the carrier rates are increasing, how eCommerce sellers can mitigate the increasing rates, and the importance of 3PL discounts.
So let's begin.
Why Are Carrier Rates Increasing?
Most ocean carriers are increasing their rates due to the present rising demand against insufficient supply. At the height of the corona pandemic, many companies limited their production because their sales went down. Then the discovery of various coronavirus vaccines led to lifting the pandemic restrictions by several governments, increasing consumption and leaving companies in a fight to counter the increase.
The demand changes are triggered by the market demand against the somewhat encircled supply by policy issues. Affecting business, labor, and immigration as well. Carrier rates are going up to enable them to handle the high input costs, including hiked fuel prices. In addition, goods transit and storage containers are fairly scarce and costly to the jams at the ports. Hence, that affects their transportation capacity and carrier rates as well.
The scarcity of labor shortages in the logistics business has posed a severe problem in the past few years. Furthermore, a powerful job market skyrocketed pay, resulting in carrier rates recovering from the high costs.
What Can eCommerce Sellers Do to Mitigate the Increasing Carrier Rates?
As an eCommerce business, you possibly may be wondering how you can contain the rising carrier rates. The good news is that businesses can use ways to curb the rates. They include:
Utilizing Order Fulfillment Center
The third-party warehouse in which new orders are adopted, processed, and served is known as a fulfillment center. The trader can receive and review stocks before ferrying them to the fulfillment center or delivering them directly to the warehouse from the factory. To regulate the goods using an outsourced fulfillment center.
Outsourcing allows traders to pass on the commitments and present costs to the warehouse's management and strive to make sales. The fulfillment center takes responsibility for stock problems like "misspeaks" and "midships."
Utilizing Fulfillment Warehouse
Unlike a normal warehouse, a fulfillment warehouse conducts a variety of tasks different from storage. The normal transporting warehouse is greater than 25,000 feet squared. Whereas 50% of fulfillment warehouses are 50,001feet squared and over.
Utilizing Pick and Pack Supply Chain Logistics
Normally, goods are kept in the warehouse for some time during their movement in the supply chain. To help them move along the supply chain, they're then executed from the shelf into a truck for delivery at the retail mart, end-customer, a manufacturing factory, or to the end consumer. That is what is known as picking and packing.
Using Reasonable and Affordable Carrier Services
Negotiating with several carriers and analyzing their achievements and pricing can be more beneficial in curbing the rates and maintaining quality. Carriers do update their pricing yearly. Hence, negotiating can offer you access to the most favorable carrier rates.
The Importance of 3PL Shipping Discounts
3PLs make it possible for every stage in the supply chain to be implemented effectively and efficiently. Resulting in:
Reasonable Cost Per Order
3PL can offer a reduced cost per order compared to operations managed internally. When compared to internally. The enormous order volume of 3PL facilities permits cost justification of:
Automated picking services
- Voice picking
- Conveyance systems
As such, 3PL cuts down the costs and boosts order fulfillment time. Also, when using the 3PL's shipping accounts, it can contain shipping costs due to volume discounts provided by the carriers.
Fixed Costs Converted into Variable Costs
When using the services of 3PL's, the cost of processing transactions goes up and comes down with the volume involved. Because there are no fixed expenses in handling material, conveyance, and facilities. Variation refers to the usage-based cost due to goods storage space as well as the services for orders.
Access to Experience and Expertise
It is challenging to predict and include internal expertise in all the necessary skills and locations in the current complicated market. Because people in the 3PL service have experience and knowledge in export and import, transportation, international compliance, companies eyeing expansion into the global markets can get more help from 3PL's. In terms of expertise and support, hence reducing expensive delays, cycle time as well as gaining convenient access to a new location.
Additionally, Xparcel enables eCommerce sellers to mitigate expensive carrier rate increases through shopping for a fair mixture of service and price for each batch transported. Reduce shipping costs and upscale customer satisfaction with Xparcel.
Now you have all the information you need to keep your carrier rates in check. Learn how partnering with ShipNetwork can help you navigate through supply chain challenges. Request a quote here.