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Cost Saving

Fuel Surcharges and Rising Delivery Costs: 9 Ways UK Businesses Can Save Money on Shipping

Fuel surcharges, annual carrier price increases and rising operating costs are all pushing delivery bills up. You cannot control the price of diesel, but you can control a lot of what you pay. Here are nine practical ways to save money on shipping.

1. Understand what you are actually paying

Many carriers add a fuel surcharge on top of the base carriage rate, usually a percentage that is reviewed regularly and can change from month to month. Add in residential or remote area surcharges, delivery attempts and other extras, and your real cost per parcel can look very different from the headline rate. Start by pulling three months of invoices and calculating the real average cost per parcel by service.

2. Check your volumetric weight

Carriers charge on the greater of actual weight and volumetric weight, so a light but bulky parcel can cost more than you expect. Our volumetric weight calculator shows how your parcels will be charged. Even a small reduction in box size can drop a parcel into a cheaper price band.

3. Right-size your packaging

Oversized boxes cost you three times: more material, more void fill and a higher carrier charge. Review your most common orders and match box sizes to them. A small range of well-chosen cartons usually works better than one size for everything.

4. Use the right service for each parcel

Not every parcel needs next-day delivery. Where speed does not matter, a slower service is cheaper. Where it does, pay for it. A fulfilment partner with several carriers can choose the best service for each order, which is the idea behind multi-carrier selection.

5. Do not rely on one carrier

A single carrier knows you have nowhere else to go. Having more than one option gives you leverage at renewal time and a way to move volume when prices or service slip. DespatchLab lets us compare and route across carriers including Royal Mail, DPD, DHL, InPost, UKMail and more.

6. Consolidate collections and shipments

Several small collections a day cost more than one planned collection. Agree a fixed collection time and batch your despatches where you can. For businesses sending regular same-day work, planned runs are cheaper than booking one-off urgent jobs each time.

7. Reduce failed deliveries and returns

Every failed delivery or return is paid for twice. Accurate addresses, delivery notifications and clear product information all reduce the volume of parcels that go wrong. Make it easy for customers to give you correct delivery details at checkout.

8. Review your fulfilment costs, not just carriage

Delivery is only part of the picture: storage, picking, packing, materials and returns all add up. Our guides to reducing fulfilment costs and hidden 3PL fees walk through where margin is usually lost.

9. Compare quotes on the whole job

If you have not benchmarked your delivery costs in a year or two, now is the time. Ask for itemised pricing so you can compare like with like. For fulfilment, a 3PL with shared carrier rates can sometimes beat what a smaller business can negotiate on its own, though the right answer depends on your volumes.

Want a second opinion on your costs? Send us a recent invoice or your typical parcel profile and we will tell you honestly where we think you could save. Request a quote or call 0116 444 0444.

Frequently asked questions

What is a fuel surcharge?
A fuel surcharge is an extra percentage a carrier adds to its base delivery rate to cover changing fuel costs. It is normally reviewed regularly, so it can go up or down over time.
How can I reduce my delivery costs quickly?
Check your volumetric weights, right-size your packaging, use the right service level for each parcel and compare quotes. These changes can often be made without any new software.
Is outsourcing fulfilment cheaper than shipping myself?
It can be, particularly once you factor in your own time, space and the carrier rates a 3PL can offer, but it depends on your volumes and products. Ask for itemised pricing and compare the total cost.
Why is my parcel charged more than its actual weight?
Carriers charge for the larger of actual weight and volumetric weight, which is based on the parcel's dimensions. Large, light parcels are often charged on volume.
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