The Top Shipping Industry Challenges and How To Address Them

Are shipping challenges hurting your operations?

You’re not alone.

Ecommerce brands have to navigate various shipping industry challenges and changes, from rate changes to delivery disruptions. The right tools can help you future-proof your business to reduce costs, grow your operations, and keep your customers happy. 

From carrier diversification strategies that give you more control over each delivery by letting you choose the right carrier service for each order to automated rate comparison tools that let you compare carriers’ real-time shipping costs, learn how ShipStation API solves shipping challenges.

Top Shipping Industry Challenges

Whether your business averages 1,000 or 10,000 shipments per month, shipping orders has its fair share of obstacles. Are you prepared for potential service disruptions? Have you accounted for seasonal pricing changes and surcharges? The shipping ecosystem is always changing, and understanding these challenges helps you anticipate setbacks and manage costs effectively.

Shipping Disruptions

Shipments can be delayed due to supply chain issues, natural disasters, human or technological errors, and even shifting political landscapes. Your business may be able to prepare for some setbacks by monitoring market changes and potential weather risks, but many shipping disruptions are unpredictable. 

Dynamic Pricing and Rate Changes

Most carriers use dynamic pricing models that fluctuate rates based on real-time variables, including:

• Shipping speed
• Shipping demand
• Market changes
• Shipment volume
• Distance and fuel
• Other operational costs

These factors can cause your shipment costs to vary across orders and different periods. They can also cause your most profitable carrier to change overnight, which means you might not know if you’re getting the best available rate.

Holiday Surcharges

Carriers implement seasonal and holiday surcharges due to the massive increases in shipments. The surcharges tend to increase every year, with some carriers charging holiday rates as early as September in 2024. This means you must account for higher seasonal costs for at least four months per year. 

Service Changes

Carriers may also change other aspects of their services, such as shortening or extending their delivery periods. Some carriers may also make behind-the-scenes operational changes that affect the quality of shipments without you noticing, resulting in lost, delayed, or damaged packages, and your customers might attribute these issues to your business instead of the carrier.

These service changes may require you to evaluate your shipping strategy to maintain quality and profitability. However, switching carriers can be time-consuming without easy access to other carriers’ rates, and it requires you to pay constant attention to the ever-changing shipping landscape. 

Navigating the Carrier Ecosystem With Modernized Solutions

Once you know the most significant shipping industry challenges your business faces, you can take steps to prepare for them and reduce your costs. Adopting tools, strategies, and solutions gives you control over the ever-changing ecosystem so that these challenges don’t slow you down. With ShipStation API, you can compare different carriers, find the most affordable rates, and optimize costs to simplify shipping.

Multi-Carrier Strategies

Many businesses mitigate their shipping costs and increase flexibility by using multiple carriers for their services rather than just one. Carrier diversification strategies empower you to choose the ideal carrier based on price changes, carrier-specific disruptions, and each order’s unique delivery needs. 

You can also offer additional shipping options for your consumers based on which carriers you work with. For example, you could use a less expensive carrier for standard deliveries but use specialized carriers for international orders, holiday deliveries, or heavy and oversized packages. 

These strategies avoid the risk of one carrier monopolizing your shipping services. Rather than leaving your prices up to the whims of another company, you can strategically change carriers based on what’s best for your customers, which helps build customer loyalty. 

Rate Comparison Tools

The only way to know you’re getting the best rates from carriers is to compare the rates, but trying to do this manually eats up time. Shipping Rates API helps you select the most affordable shipping carrier based on your carrier specifications and each order’s unique needs. This lets you save money on every delivery without making the customer wait for you to decide on a carrier.

Cost-Optimization Techniques

You can save even more on shipping using the following cost-optimization techniques:

• Consolidated shipping: Order consolidation combines packages sent to nearby areas into a single shipment that’s unconsolidated later, such as at a distribution facility. For example, if you ship five orders to Orlando, you could package them together to reduce the cost of shipping five individual items with separate labels. 
• Effective packaging strategies: Customizing your packaging solutions or having a wide variety of available packaging options helps minimize the size and cost of each package. You can also save money by knowing different carriers’ dimension specifications and keeping your shipments within these limits.
• Negotiating with carriers: You may be able to negotiate lower shipping costs by contacting each carrier, especially when shipping in high volume. ShipStation API makes this a breeze with pre-negotiated shipping rates and discounts of up to 89%, so you know you’re getting the best price.
• Financial incentives: Using eco-friendly packaging materials and shipping practices can open you up to tax rebates and other financial incentives, such as Green Ship programs.

Discover How ShipStation API Solves Shipping Challenges

ShipStation API gives you effortless control over your shipment process so you can tackle the most common shipping industry challenges and scale your business. Save time and money as you scale your business by working with multiple carriers, automating shipments with rate comparison features, and monitoring updates with ShipStation API tracking. Get started today to learn how ShipStation API solves shipping challenges and minimizes your final costs.