Package dimensions and weight

Why it matters: Carriers charge based on the space your package occupies and its weight. Surprisingly, a bulky but lightweight package might cost more than a small, heavy one. This is because carriers use dimensional weight (DIM weight) to reflect the space a package takes up in their trucks or planes, not just its actual weight.

Tip: Measure your packages accurately. To save on costs, use appropriately sized boxes with sufficient padding to protect your items. Avoid using oversized packaging when it isn't necessary, but always ensure your items are safely packed to prevent damage.

Shipping distance

Why it matters: The farther your package travels, the more it costs. Carriers categorize destinations into shipping zones, and prices increase for distant zones. This is because longer distances consume more fuel and require more handling.

Tip: Consider using fulfillment centers or warehouses that are closer to your main customer bases to reduce shipping distances and costs. For example, if most of your customers are in a specific region, see if you can store inventory in a nearby location. This way, you can shorten delivery routes and save on shipping expenses with your shipping provider.

Delivery speed

Why it matters: Expedited shipping options like overnight delivery are pricier due to the additional resources required. Faster delivery services need priority handling, often involving air transport and special routing, which adds to the cost.

Tip: Offer a range of shipping options to balance cost and delivery speed for your customers. Encourage customers to choose slower, more economical options when their order isn't urgent.

Shipping methods

Why it matters: Ground shipping is generally cheaper than air or sea, but the best choice depends on how quickly your products need to reach customers. Each method has its own cost structure, with air being the fastest and most expensive, sea being cost-effective for large shipments, and ground being ideal for domestic deliveries.

Tip: Focus on selecting the delivery speed and service that best fits your business needs. This simplifies the decision-making process by letting you prioritize what’s most important — delivery date and cost. FedEx offers options that balance speed and budget, so you can choose the right service for you.

Destination type

Why it matters: Shipping to residential areas usually costs more due to extra handling and delivery challenges. Remote or rural areas might also incur higher charges because they are harder to reach and less frequently serviced.

Tip: Offer incentives for customers to ship to commercial addresses or local pick-up points to reduce costs.

Shipping provider discounts

Why it matters: Discounts from shipping providers can significantly reduce your overall shipping costs. These discounts can come from digital tools, increased usage, or loyalty programs.

Tip: Consolidate your shipments with one provider to qualify for higher discounts. Take advantage of FedEx’s account opening discount and FedEx Rewards to maximize your savings.

Customs duties

Why it matters: International shipping can involve customs duties and taxes, which vary by country and can add to your overall shipping costs. With FedEx, the cost of processing customs paperwork is included in the shipping quote, so customers only need to focus on government-imposed fees, like taxes. However, if customers request special handling (e.g., using their own broker), additional fees may apply.

Tip: Research and understand these fees ahead of time to avoid surprises and incorporate them into your pricing for international customers.

Fuel surcharges

Why it matters: These surcharges fluctuate with fuel prices, impacting your overall shipping cost. Carriers adjust these fees based on the current cost of fuel to cover the additional expense.

Tip: While these surcharges are influenced by external factors, staying informed about fuel price trends can help you better plan your shipping budget. Building this into your logistics strategy allows you to navigate price fluctuations more effectively.

Handling services

Why it matters: Handling services, like multiple delivery attempts, customs clearance, and special handling (e.g., forklifts or trucks), can impact shipping costs. These are often necessary for end-to-end shipping.

Tip: Choose a provider that offers comprehensive handling services to ensure smooth and reliable deliveries. FedEx offers efficient customs clearance and flexible delivery options, which helps you avoid unexpected additional charges.