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What aspects affect parcel delivery costs the most?

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Written by Ecoparcel May 19, 2021

If parcel shipping is something that you do on a regular basis, you’ve probably noticed the fact that prices for delivery fluctuate on a regular basis. This is not a coincidence, as the end cost often relies on a number of factors happening on a global scale which result in either an uprise or decline in shipping prices.

As a business that wants to make deliveries for clients, you, of course, cannot control these factors yourself. However, it is important to know them in order to have and understanding of when prices might change and thus, affect your expenditure.

In this article, we will talk about just that - aspects that determine shipping costs in Europe and worldwide.

Most common aspects affecting shipping rates

There are a number of factors that determine what shipping rates delivery companies apply for their clients. 

Knowing these before you decide to sign a partnership contract will not only give you a better understanding of how the industry works, but could even give you more negotiating power when it comes to deciding on the intricacies of that contract.

Here are the 4 most important things.

  • Level of service
  • Size and weight of shipments
  • Changes in fuel prices

Levels of service

Most shipping companies offer different service levels when it comes to deliveries. A regular plan will most likely mean that your parcels are being treated as normal deliveries with an average delivery speed and handling.

More expensive plans, however, often prioritize your deliveries over others, which means that you can expect much better delivery times and better care. This priority option is certainly worth considering if you have the necessary financial resources to afford it, as it pretty much guarantees better speed and handling.

However, delivery companies also often offer great discounts for businesses shipping large amounts of deliveries on the regular. So, as you negotiate your terms, ask around potential discounts for being a longer term client.

Size and weight

Size and weight also is an important factor when it comes to delivery cost. You see, many shipping companies are keen on practicality and being able to load as many parcels as possible on a single journey from one place to another.

If you’re sending unusually-shaped or very large items, you’re very likely to receive a much larger bill for your deliveries than you might have initially anticipated, since you’ll be taking up more space on a cargo plane or ship.

To counter this, many EU countries have strict rules when it comes to a single parcel as typically 30 or 50 kilos is the maximum you can send with a single shipment. 

Another thing that’s done by the companies themselves is the offering of shipment optimization services. Giants like UPS and FedEx for example, offer to maximize the efficiency of your delivery by ensuring that your delivery is as maximized as possible.

Fuel prices

Oil prices fluctuate regularly, which also means that delivery prices may differ as well. Planes burn enormous amounts of fuel, so shipping companies will either raise or lower the prices for their packages depending on the market.

With a larger company that has many partners scattered across the destinations you're interested in, there’s a higher chance that you could again negotiate a better deal for your business in terms of discounts and allowing you to be less dependent on fluctuating fuel prices.

How can you save money on parcel shipment?

The most basic tips we can give in this regard is of course to minimize your parcel dimensions and weight as much as possible, since larger items directly contribute to increased prices. 

Another thing to consider is of course, the shipping materials themselves. Smaller boxes and packages can certainly save you some money in terms of using less space. 

The same goes for the materials themselves. Cardboard and paperboard are sturdy and recyclable options that cost much less than some alternatives.

Maintaining this type of mentality can certainly help you save money, without sacrificing your reputation and quality.

All in all

There are a couple of key factors that influence your parcel shipping prices, so it's important to have the right understanding in order to decrease the costs and make deliveries more beneficial for your business.