Let’s face it – shipping rates greatly impact product costs and a company’s profitability. Shipping rates have fluctuated over the years and the impact on retailers and brands is enormous. How can a company provide low-cost shipping while consumers are increasingly demanding fast shipping?
Below we highlight the RateLogic shipping rates comparison tool and how it benefits each client’s needs.
Technology has played a huge role in shipping rate comparison. The evolution of “shipping rate shopping software” continues to improve, allowing order fulfillment companies to provide the lowest cost shipping rates at the fastest acceptable shipping time for consumers.
RateLogic is AMS Fulfillment’s proprietary shipping rate comparison platform. Developed by AMS’ in-house technology and logistics teams, RateLogic shipping software is designed to simplify shipping rate comparison shopping.
RateLogic selects the best small parcel carrier for package shipments. The shipping price comparison tool analyzes the dimensional weight (attributes of each package including weight and size), a package’s origination, and destination and applies a set of pre-determined rules to select the best shipping carrier.
AMS’ team can customize RateLogic’s rules based on the logistic needs of each client. This customization ensures that RateLogic is tailored to each client’s needs.
By automating the carrier selection process, RateLogic can help clients save time and streamline their shipping operations. Instead of spending valuable time researching and comparing carriers, clients rely on RateLogic to provide recommendations quickly and accurately.
Whether shipping domestically or internationally, RateLogic optimizes the shipping process for maximum efficiency and cost-effectiveness. With its customizable rules and proprietary technology, this program is an indispensable tool for any business looking to simplify its shipping operations and reduce costs.
Since Amazon launched Amazon Prime in 2005, consumers have come to expect fast and free delivery. Known as The Amazon Effect, this phenomenon has changed the retail industry and consumer behavior. About 68% of consumers expect their packages to arrive in five days or less.
Finding the best shipping rates is not as easy as it seems. For companies that do not outsource their order fulfillment to a reputable 3PL like AMS Fulfillment, this process involves researching carrier shipping rates and negotiating rates with them.
Carriers often go about calculating shipping costs based on package volume. The more packages that a company ships, the lower the negotiated shipping rates. Volume = lower shipping rates.
Volume shipping discounts for shipping rates are one of the biggest advantages of outsourcing order fulfillment. A 3PL will ship millions of packages a month, while an individual company may only ship tens of thousands of packages. The 3PL will lock in discounted rates and pass the savings on to their clients.
Shipping costs are largely comprised of three main factors and costs can vary from carrier to carrier, which further makes it difficult for companies to compare shipping rates.
The four main factors that impact shipping prices are:
Carriers divide the continental US into zones, each representing a grouping of Zip Codes. The carriers use these shipping zones (Zone Map) to measure the distance a package travels in zip code groupings.
For example, in the image below, a package traveling from Los Angeles, CA to New York, New York via USPS will travel through eight zones:
Shipping a package from LA to NY travels through eight zones and over 2,795 miles. In general, the USPS breaks down its zones:
Total shipping costs also depend on shipping services and a package’s weight and dimensional weight, but the higher the zone, the higher the shipping costs.
Dimensional weight has a huge impact on shipping rates. Dimensional weight (DIM Weight) is a volume metric used by logistics and shipping companies. The formula may be universally used, but the “dim weight divisor” can vary by carrier.
This means that the same package will have a dimensional weight depending on the carrier, which in turn impacts shipping rates. The formula for dimensional weight is:
DIM Weight = (length x width x height)/dim weight divisor
For the first part of the formula, if a package measure is 12” x 12” x 12”, with an actual weight of 5 lbs. the result would be:
1,728 cubic inches/dim weight divisor
In 2022, the dimensional weight divisor by carrier was:
|Carrier||2022 DIM Factor (Divisor)|
Plugging the DIM divisor into the above example formula, shipping costs would be:
|Carrier||2022 DIM Weight|
The actual weight of the package is only 5 lbs. However, when the dimensional weight is calculated, the package is now either 10 lbs. or 12 lbs. depending on the selected shipping carrier.
In the example above, leveraging a sophisticated 3PL with shipping rate comparison technology becomes even more important to help reduce shipping costs.
In the above example, using RateLogic can help by reducing shipping costs by as much as 35%!
Consumer satisfaction is tied to delivery times. The vast majority of consumers expect their eCommerce orders to arrive in five days or less.
Shipping delivery times vary by carrier, making shipping selection even more difficult:
|USPS||Priority Mail Express||Overnight||$$$||70lb or less|
|Priority Mail||1-3 Days||$$||70lb or less|
|First-Class Package Service||1-3 Days||$||13oz or less|
|USPS Retail Ground||2-8 Days||$||70lb or less|
|FedEx||Same Day||Same Day||$$$||150lb or less, upon approval|
|Standard Overnight||Overnight||$$$||150lb or less|
|FedEx 2Day||2-3 Days||$$||150lb or less|
|FedEx Ground||1-7 Days||$||150lb or less|
|UPS||Next Day Air||Next Day||$$$||150lb or less|
|2nd Day Air||2 Days||$$||150lb or less|
|3 Day Select||3 Days||$$||150lb or less|
|UPS Ground||1-5 Days||$||150lb or less|
By using RateLogic, analyzing shipping carriers, delivery times, and costs are automated. This automation is customized for each client’s shipping preferences. In addition to the popular shipping services that these major shipping carriers offer, RateLogic also analyzes regional carriers.
By including regional carriers, RateLogic can provide carriers that cover a shorter shipping distance and, in less time, thereby speeding up delivery times. And faster delivery times positively impact consumer satisfaction.
Contact Us today to see how our shipping rates comparison software can help you and your business needs.
RateLogic uses over 25 different carriers, including UPS, FedEx, USPS, and several regional carriers.
Yes, RateLogic does support AMS’ shipping scales.
RateLogic is Cloud-based and as part of AMS’ WAMS, has passed A-Lign’s Type II SOC Audit.
Shipping rates are current with the carrier’s rate cards.
Yes, all shipping tracking is available.
Yes, RateLogic can be customized for a company’s specific shipping carrier requests.
RateLogic has the most current shipping rates and will analyze rates, package weight and dimensions, and package origination and destination and selects the optimal carrier for the lowest shipping rates.