The High Cost of Shipping Heavy & Bulky Parcels – Part 1

Many ecommerce merchants have been feeling the pinch of shipping margins in recent months and years, but there are a few good reasons for this.

I discuss many issues around influences and types of shipping costs in my book ‘Shipping Smarter – A Guide to eCommerce Shipping’, however, few people expected the size of some of the shipping price increases we’ve seen this year particularly.

This shock to the system has led me to write this two-part article, initially highlighting the issue with shipping costs for big and bulky items before revealing an exciting new solution which you may have heard from Smart Send this week…

Today though, we’ll focus on the issue: unsustainably high shipping costs for large items and a lack of providers to help lower the cost.

If you’re an ecommerce merchant, you’ll no doubt have experienced some major increases in shipping costs of late. During the height of the recent pandemic, we saw major issues in the supply chain and associated costs. Most people expected things to return to normal, however, we now know that’s far from the truth. Apart from the cost of importing containers to Australia normalising, domestic shipping costs seem to be only increasing.

There are a few reasons for this:

Inflation

Staffing issues with transport companies

Fuel costs

Inflation has affected consumers’ buying habits with lower online sales volumes this year, ultimately affecting the bottom line of transport companies. Transport carriers already run on extremely low profit margins, so the reduction of sales numbers causes them to struggle further as their fixed costs are hard to reduce.

What also affects sales is an inability to provide competitive shipping for big and bulky deliveries, as customers turn to merchants who can. This is caused by a lack of ‘qualified’ staff and drivers across Australia. With the boom of delivery services like Amazon Flex, Uber, TaskRabbit and so many more, some courier drivers are finding it better to be their own boss rather than work for transport companies.

There are also geographic-specific issues to be dealt with. For example, in Western Australia, drivers or depot staff are opting to leave and work in the state’s mines where they can earn much more money. The time and expense of finding the right staff is an operational drain for transport companies Australia-wide.

Finally and possibly the most resonating factor for us all, fuel prices have skyrocketed. However, when your business or service relies on the upkeep of entire vehicle fleets, fuel cost increases of 20-30% can prove catastrophic for even the healthiest of bottom lines.

With all of this in mind, it becomes slightly more understandable why merchants are seeing courier increases of around 8-15% in 2023. Transport services that already run on extremely thin margins are just trying to stay afloat and naturally, some costs must be passed on.

For merchants that send small parcels or satchels, there are a plethora of options to choose from with Australia Post controlling the majority of this market.

However, for ecommerce merchants sending heavy and bulky parcels to home addresses, it’s not so easy. As these merchants would well know, there is hardly a handful of affordable carriers to choose from that can provide a professional service.

If only there were a new player in the market who could offer exceptional service with reasonable prices for big and bulky parcels. Is that too much to ask for?

Parca Logistics thinks not…

Tune in this coming Tuesday as I reveal part two of this series on shipping costs for big and bulky parcels, and the answer to all our prayers.

Smart Send has recently made an exciting announcement regarding our partnership with Parca and part two will discuss the details of this deal, as well as its implications for our customers.