Cost Saving
5 Tips To Cut 20% Off Your Shipping Costs

5 Tips To Cut 20% Off Your Shipping Costs

By carefully choosing between air and ocean freight, shipping during off-peak days, and consolidating your shipment, you can greatly reduce the amount of money you spend on shipping.

6 mins read, 20 Mar 2020
5 tips to save and lower your shipping costs
Bookairfreight’s Key Takeaways:

• Consolidate your orders and ship the goods in bull - and get even larger discounts if you ship before peak season.

• Choose a centralized and knowledgeable fulfillment centre that can ship your goods to customers faster and at a cheaper rate.

• Invest in smart technology to receive instant quotations to help you plan your shipments better.

Tip 1: 50% Savings - Know When to Choose Air or Ocean Freight

When you can choose the better option for your goods between air and ocean freight, you can save up to 50% in logistics costs.

Each freight is typically better for different types of goods because of the speed, volume, and weight capacities they are restricted by.

Generally for:

• High density & low-value goods, or when time is NOT an important factor - choose ocean freight 🚢.

• Low density & high-value goods, or when time can make or break a deal - choose air freight ✈️.

A quick example - Let’s say you’re shipping from China to the US:

Total CBM  = 1 CBM

Chargeable Weight = 167 kg

Product Weight = Clothing

  From China to US, Door
to Door, DDP
✈️ Air Freight Cost
From China to US, Door
to Door, DDP
🚢 Ocean Freight Cost
Freight Rate / kg US$ 7/kg US $1.3
Door to Door with Tax
and Duty Rate
US$ 1,169 US$ 217.1
Transit Time 5 - 7 days 25 - 30 days

For 1 CBM of goods, ocean freight is 5 times cheaper than air freight, but also 5 times slower.

Bookairfreight’s Tips: You can also separate your shipments:

• You can also break down your shipments - for example: send 30% of the goods by air, and 70% by ocean.

• You’ll save at least 20-35% of costs versus just shipping everything by air.

Tip 2: 40% Savings - Bulk Ship Your Goods

Simply by consolidating your smaller orders and shipping all your goods at once from the factory you can cut down up to 40% of the costs.

How bulk shipping will benefit your firm:

Freight forwarders charge based on ‘weight class’ - which are different tiers of weights, each with a different freight charge.

The larger the weight, the cheaper the rates - hence, when you bulk ship, your total weight increases, and it can apply a lower rate per kg.

Here’s an example of a weight class:

(these rates are made up for the purpose of this example and you can check our platform for real time rates.)

From China to US:

Weight Tiers (in kg) ✈️ Air Freight Rate ( $ / per kg)
20 - 100 kg US$ 8/kg
101 - 300 kg US$ 7/kg
301 - 500 Kg US$ 6.5/kg
501 Kg above US$ 6/kg

Simple scenario time:

Let’s say you’re shipping goods weighing 150kg in total. Here are the 2 scenarios:

Scenario 1 - Regular
you’ll break it down into two separate
shipments over a period of time
Scenario 2 - Bulk shipment
ship the entire 150kg but in one
Shipping cost = shipment 1 + shipment 2

Each shipment is under 100 KG, so
freight rate = US$ 8/kg

Shipping cost = (90kg * US$ 8/kg) +
(60kg * US$ 8/kg)

Shipping cost = US$ 720 + US$ 480
= US$ 1,200
Shipping cost = total weight * freight rate

Shipment weight is 150 KG, so
freight rate = US$ 7/kg

‍ Shipping cost = 150 kg * US$ 7/kg

Shipping cost = US$ 1,050

Just by shipping in bulk, you save US$ 150 - a 12.5% savings! With consistent bulk shipping, you can re-invest the savings into your business and drive growth.

Why does bulk shipping work?

It’s a lot cheaper to ship 10 pallets at once than to ship 2 pallets every day. It ties with the concept of ‘economies of scale’ - as you produce more units (in this case - ship more units), the more your costs decrease.

Tip 3: 35% Savings – Ship in Advance or On Off-Peak Days

This sounds extremely simple and straightforward but lots of businesses fail to do it.

Planning in advance - coordinating production with your factory to ship before peak seasons and on off-peak days will save you at least 35% of your costs.

How does shipping before peak season help you save money?

You can get better rates from your freight forwarder as there is less competition for the forwarder’s capacity and you can avoid the hefty ‘peak season surcharge’.

What are the peak seasons in shipping?

Mid-August to November  - Caused by Back to School Season, Thanksgiving, and Christmas
January to February - Caused by Chinese New Year.

A 20 ft container is $300 - 400 USD more expensive in peak season than in off peak season.

how much does it cost for a 20ft container?

Air freight price difference is even larger:

how much it cost for air freight?

Now, you can further maximize cost savings by shipping on off-peak days! 

Know your freight forwarder's off-peak days: Collaborate and ask when they have more capacity. 

Generally, for consumer goods, Friday is considered an off-peak day because shippers try to have the goods in stores or warehouses by thursday so that they can be ready to sell over the weekend. 

Frequent shipping on off-peak days can save up to 10% VS shipping on peak days.

Tip 4: 25% Savings - Choosing Better Fulfillment Centres

When you choose the right fulfillment centre, you can save 25% of shipping costs on top of not having to worry about managing and delivering your customers orders. 

What do we mean by “Choosing Better Fulfillment Centres”?

Choose a centre based on their location and expertise! 

Choose a fulfillment centre that is central to where the majority of your customers are! These centers are more localised and can offer expertise on consumer behaviour and how to best ship to them. 

They also have connections with regional carriers who can offer cheaper shipping options and a better understanding of local shipping routes, and best practices.

Where is the 25% savings coming from?

The cost savings comes from the volume discounts and shipping routes chosen by the centers.

Fulfillment centers work with many different clients’ shipments  - so they bundle up the orders into a single large volume and negotiate large discounts and deals on shipping rates. 

Due to the large volume, they can negotiate with multiple carriers (FedEx DHL, or smaller and regional carriers) to get the best rates on each package you ship.  

They already have set processes in place to choose the best and most cost-effective  scheduling and delivery routes.

Special Tip! 25% Savings -  Invest in Technology

Investing in technology will give you a 60% increase in productivity and 25% reduction in logistics costs.

We’re talking about an online marketplace and a platform like Bookairfreight that will help you create a system that will:

Reduce admin work such as emailing and phone calling for a quotation

Speed up your shipment booking process

Help you manage your shipments from start to finish on a single platform

On our platform, you can plan your shipments by testing out shipping quotes for various  locations and addresses, and get a rough estimate of your charges.

Step 1: Type in your "Box dimensions or Total shipment dimensions"

how to save shipping cost

Step 2: Choose your "Pick up" and "Drop off locations"

how to save shipping cost

Step 3: Type in "Product details"

how to save shipping cost

Step 4: Choose "Insurance option"

how to save shipping cost

Step 5: Instantly compare different quotes, share, or even just book a shipment!

how to save shipping cost

Investing your time and money into a life-changing technology like this will allow you to save not just money but also time to focus on the real needs of your business and customers. 

So wait no more, run your business like a boss! Request a consultation with Bookairfreight, or check out our platform for FREE! 

Try our instant quotes for free
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Daisy Jiang

Proud Co-Founder and CEO of Bookairfreight. Shortly after starting to work in the world of logistics, I was astonished at how difficult and time consuming it was for businesses to get their hands on a simple air freight quote. I saw this as an opportunity to really make a difference in people’s lives, and felt like I had to do something. It was the spark that lit the fire of Bookairfreight’s creation.

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