eCommerce Peak Season Surcharges, Another Price Increase?

As the holiday season rapidly approaches, many online shoppers are bracing themselves for another round of price hikes. Shipping carrier Peak Season Surcharges, as they're called, have become an unfortunate reality in recent years.

Retailers are struggling more than ever to keep up with shipping costs, and unfortunately, that often means sharing the cost with the consumers. So what can you do to avoid being overcharged during the holidays? Keep reading for our tips!

The Increase in Online Prices During Peak Shopping Seasons: Stats and Facts

The National Retail Federation (NRF) is expecting online sales to grow between 3.8 and 4.2 percent this holiday season. This growth rate is higher than the 10-year average of 3.5 percent and reflects continued consumer confidence in the economy.

However, as eCommerce sales continue to grow, so do the costs of shipping. A recent study found that the cost of shipping has increased by nearly 10 percent over the last two years and retailers are struggling to keep up with the rising prices.

In order to offset these increased costs, many carriers have implemented surcharges during peak shopping seasons. These surcharges are typically passed on to the consumer in the form of higher prices for shipping during these periods.

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The Effects of Shipping Surcharges on Businesses and Consumers

Shipping carrier surcharges have been a touchy subject for businesses and consumers for quite some time. These surcharges are necessary to offset the high cost of shipping goods. There's no denying that shipping surcharges can have a significant impact on businesses and consumers. Here are four ways that these fees can affect both parties:

1. Businesses may lose customers if they charge too much for shipping. In today's world, consumers are used to getting their goods delivered for free or very cheap. If a business tacks on a hefty surcharge, they may find that customers are no longer willing to shop with their brand. As a result, businesses need to be careful when setting their prices.
2. Surcharges can also impact businesses bottom lines. While some businesses may be able to absorb the cost of shipping surcharges, others may find that these fees eat into their profits. In some cases, businesses may even be forced to raise prices in order to cover the cost of shipping. This could lead to a loss of business as well.
3. Consumers may also be affected by shipping surcharges. In many cases, these fees are added to the final price of a product. This means that consumers may end up paying more for goods than they would if they had purchased them in a store. In some cases, consumers may even be forced to pay higher shipping rates if they live in an area that is subject to extra surcharges for delivery.
4. Shipping surcharges can also impact the overall economy. If businesses pass the cost of these fees onto consumers, it could lead to more inflation. In addition, if businesses raise prices in order to cover shipping costs, it could lead to a decrease in consumer spending.

Ways To Reduce the Impact of These Charges on Your Wallet as a Retailer

Join a Shipping Cooperative

One way you can reduce your shipping costs is by joining a shipping cooperative or 3PL logistics providers. These cooperatives allow businesses to pool their resources and negotiate better rates with shipping companies. In some cases, businesses that join a shipping cooperative may be able to get discounts of up to 70% on their shipping rates.

Use Flat-Rate Shipping

Another way to reduce your shipping costs is by using flat-rate shipping. With this type of shipping, businesses charge a single, flat rate for shipping, regardless of the weight or destination of the package. This can be a great way to save money on shipping, especially if you ship a lot of small packages.

Use Discounted Shipping Rates

Another way to reduce your shipping costs is by using discounted shipping rates. Many 3PLs offer discounts for businesses that ship large volumes of packages. In some cases, businesses can save up to 50% on their shipping rates by using discounted rates.

Key Takeaway : 3PLs can help eCommerce retailers save money on shipment costs by handling the shipping and order fulfillment component of their operations so that retailers may focus on curbing delivery expenses during peak season.

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Bottom Line

Peak season surcharges are a way for shipping carriers to increase shipping costs during high-traffic times. These price hikes can be frustrating for customers, but there are ways to avoid them. Discover how to save money on shipping this holiday season by utilizing Rakuten Super Logistics, now ShipNetwork which offers quick and precise order fulfillment in time for the holidays to help your online business grow.