Shipping Rate Changes in 2020 for Ecommerce Business

Is Your eCommerce Business Prepared for the Shipping Rate Changes in 2020?

You work hard to make your eCommerce website a success, and that includes selecting an economical and reliable shipping service. But have you heard about the various rate changes happening right now?

As an online brand, there is a good chance you utilize one or more of the following companies in your logistics strategy. That’s why our CAKE team has put together a quick guide for your review. Here are shipping rate changes in 2020 that you need to be aware of.

Rate Changes in 2020: United States Postal Service (USPS)

The United States Postal Service (USPS) is one of the five different companies mentioned in this guide who are experiencing a rate change this year. While the cost of regular first-class stamps isn’t going up, the price for sending anything via Priority Mail is expected to rise between 2% and 3% for 2020. The difference in prices is really too much to list out here, but official details on which services are changing can be found on the official USPS website here.

Rate Changes in 2020: UPS

Another shipping company raising rates in 2020 is UPS. In fact, the rise in cost for their Ground, Air, and International Services has gone up a staggering average net of 4.9% over what it was last year. Furthermore, the shipping giant also announced that the maximum weight before requiring an additional handling surcharge has dropped to fifty pounds from the previous weight of seventy pounds. For more information on this change, click here.

Rate Changes in 2020: FedEx

Who else is raising their shipping rates? FedEx. In January, the company announced a rate increase for items that require additional handling or that are oversized. They are also adding more for a fuel surcharge increase starting in March. Additional details are available on the company’s official website.

Rate Changes in 2020: DHL Express

Although they aren’t as widely used as the other companies mentioned here, DHL Express is also raising rates a whopping 5.9% for American customers. While this likely won’t affect your rates to individual customers, it could have a big impact on the cost of wholesale fulfillment from overseas. Additional information is available on the DHL website.

Rate Changes in 2020: Canada Post

For eCommerce businesses that ship across the northern border, it is important to know that Canada Post is raising rates, too. The average cost to ship a package from Canada to the United States is rising around 2% in total cost. While this isn’t a big deal for most eCommerce brands, it is something that you want to be aware of.

How to Prepare for These Rate Changes in 2020

If you’re concerned about these shipping rate changes, it is important to remember that there are certain steps you can take to ensure they don’t hurt your bottom line. Here are a few best practices.

If You Offer Free Shipping: Keep offering it. Customers are accustomed to this service and changing your practice could dramatically decrease sales. While it might hurt to absorb costs, losing out on sales altogether would be worse. Likewise, you can set a minimum order cost for free shipping and try to offset costs that way.

If You Offer Flat Rate Shipping: You should keep offering this, too. But the biggest change you might want to make is to readjust the shipping ranges to meet your cost absorption accordingly. You can also do nothing if the changes don’t affect shipping for the majority of your customers.

If You Offer Calculated Shipping: There are two options here. One is to do nothing and (again) absorb the costs. You can also choose to decrease prices slightly to help offset costs for the customer, which will likely help keep customers over the long haul.

How you choose to address these shipping rate changes ultimately has to do with which shipping company you utilize most and the effects they make on your profits. Each eCommerce brand needs to address this individually and come up with an appropriate game plan.

Do you struggle with shipping and logistics in your eCommerce business? Our CAKE team can help. We eat, sleep, and breathe all things online shopping and are ready to help you thrive. Please contact us today for details.