It’s that time of year again when the legacy national carriers tell us what’s on their holiday wish list for the coming year. News from FedEx is that they’ll be covering costs by an average 5.9%-6.9% increase in ground and home delivery rates for 2024. That’s on top of rate increases of 6.9% in 2023, 5.9% in 2022, and 4.9% in 2021.
Most online retailers offer a ground shipping option. It can be slow, taking as many as five days from end-to-end, but it has been considered an “affordable” way to offer consumers a free shipping option on a minimum purchase or as a loyalty program perk. That “affordable” option is becoming less affordable each year. At the same time, consumers have become accustomed to free shipping, and a majority will not convert their shopping carts without a free shipping option.
For ecommerce brands, the demand for “free shipping” combined with rapidly rising shipping costs puts a squeeze on margins and creates a dilemma—do you take the margin hit and absorb the increased costs, or risk passing the cost along to the consumer in the form of higher prices or higher minimums for free shipping? Perhaps more importantly, how sustainable is this over the long term?
Luckily for ecommerce brands, the major carriers no longer enjoy a monopoly in most major metro areas. Shipping providers like AxleHire bring a viable alternative—faster delivery at lower rates—in the places where most of your customers live. Consider giving yourself a gift this holiday season and breaking away from the major carriers.
Check out our in-depth analysis of major carriers pricing here for or more information.
