Guide to B2B Parcel Shipping
In this guide we will explain parcel shipping for businesses. From what it is, to how much it costs and what you should be aware of in terms of regulations, packaging and much more practical information.
If you are done with that, our network of couriers and other logistics companies can help you answer all your specific questions.
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Basics to B2B Parcel Shipping
Defining Parcel vs. Bulk Freight
Parcel shipping refers to the transportation of individual packages, typically weighing less than 150 pounds and with dimensions smaller than 108 inches in combined length and girth. In contrast, bulk freight involves shipping large quantities of goods, often on pallets or in containers, utilizing different transportation modes and logistics processes.
Common Types of B2B Parcels
B2B parcels encompass a wide range of goods, including:
- Manufacturing components: Parts, sub-assemblies, and raw materials.
- Retail merchandise: Finished goods destined for stores or fulfillment centers.
- Medical supplies: Pharmaceuticals, equipment, and devices.
- Office supplies: Stationery, electronics, and furniture.
- Repair parts: Components needed for maintenance and repair.
Market Trends in B2B Parcel Delivery
The B2B parcel delivery market is experiencing a significant transformation following the post-pandemic volume decline and inflation-driven cost pressures. While e-commerce drove rapid capacity scaling during COVID-19, the current landscape shows stagnating volumes combined with persistent high customer expectations for faster delivery times and flexible solutions. The industry faces intensified competition from both traditional carriers and new entrants, including large e-commerce players like Amazon becoming delivery competitors themselves.
As highlighted in a recent Accenture report, logistics players are increasingly integrating vertically to offer end-to-end solutions. This vertical integration trend emerges amid a "perfect storm" of overcapacity, margin pressure, and the need for sustainable fleet investments. In response, successful logistics players are adopting focused strategies: either optimizing core delivery operations for cost efficiency, specializing in specific value chain segments like parcel lockers, or developing new revenue models with superior customer service. The need to digitize operations and offer innovative delivery solutions remains crucial, though companies are now being more selective in their strategic investments rather than trying to compete on all fronts.
Volume Characteristics
B2B parcel shipments often involve higher volumes compared to B2C shipments, with businesses regularly sending out multiple parcels to various destinations. This requires efficient logistics management and the ability to handle large-scale operations.
Parcel Classifications and Specifications
Weight Limits and Restrictions
Parcel carriers impose weight limits for individual packages, which typically range from 70 to 150 pounds. Shipments exceeding these limits may require alternative transportation methods or be subject to additional fees.
Dimensional Considerations:
Carriers also have size restrictions for parcels, often expressed as maximum length, width, and height. Parcels exceeding these dimensions may be considered oversized and subject to surcharges.
Special Handling Categories:
Certain goods require special handling due to their fragile nature, temperature sensitivity, or hazardous properties. Carriers offer specialized services for handling these goods, such as temperature-controlled transportation or hazmat shipping.
Multi-Piece Shipment Handling:
For shipments consisting of multiple parcels going to the same destination, carriers offer options for consolidated shipping, which can streamline the process and reduce costs.
Packaging Solutions
Standardized Packaging Options:
Carriers offer standardized packaging options, such as boxes and envelopes, designed to meet their specific size and weight requirements. Utilizing these options can simplify the packaging process and ensure compliance with carrier guidelines.
Custom Packaging Requirements:
For goods with unique shapes or fragility, custom packaging may be necessary to ensure adequate protection during transit. This may involve designing and manufacturing bespoke packaging solutions tailored to the specific needs of the goods being shipped.
Labeling and Identification Systems:
Proper labeling is crucial for efficient parcel handling and tracking. Carriers require specific labels containing information such as the sender's and recipient's addresses, tracking numbers, and any special handling instructions.
Sustainable Packaging Choices:
As awareness of environmental issues grows, businesses are increasingly opting for sustainable packaging materials, such as recycled cardboard or biodegradable fillers. This can help reduce the environmental footprint of B2B parcel shipping.
Key Trends:
- Mail revenue share declined dramatically from 57% to 29% (-28%)
- Parcel services grew significantly from 17% to 36% (+19%)
- Logistics services increased from 7% to 17% (+10%)
- Financial services remained relatively stable around 12-14%
Parcel Consolidation Strategies
Bundle Shipping Options:
Bundle shipping involves combining multiple smaller parcels into a single larger shipment, which can reduce shipping costs and streamline the delivery process.
Zone Skipping:
Zone skipping involves consolidating parcels destined for the same geographic zone and shipping them to a central hub within that zone, where they are then sorted and delivered to their final destinations. This can reduce transit times and shipping costs by minimizing the number of zones the parcels traverse.
Cross-docking for Parcels:
Cross-docking involves transferring parcels directly from inbound trucks to outbound trucks without intermediate storage, reducing handling time and storage costs.
Multi-Location Consolidation:
For businesses with multiple shipping locations, consolidating parcels from different locations into a single shipment can reduce overall shipping costs and simplify logistics management.
Service Levels and Delivery Options
Express Delivery Services:
Express delivery services offer guaranteed delivery within a specified timeframe, often within 24 to 48 hours. These services are ideal for time-sensitive shipments or those requiring expedited delivery.
Standard Delivery Options:
Standard delivery options offer more economical shipping solutions with longer delivery times, typically ranging from 3 to 7 business days.
Same-Day/Next-Day Considerations:
For urgent shipments, same-day or next-day delivery options are available, providing the fastest possible delivery times. However, these services come at a premium cost.
Time-Definite Delivery:
Time-definite delivery services offer guaranteed delivery within a specific time window on a designated day, providing businesses with precise control over their delivery schedules.
Cost Optimization for Parcel Shipping
Rate Structures for Parcels:
Parcel carriers use various rate structures based on factors such as weight, dimensions, distance, and service level. Understanding these structures is crucial for optimizing shipping costs.
Volume-Based Pricing:
Carriers often offer discounted rates for high-volume shippers, providing incentives for businesses with significant shipping needs.
Multi-Carrier Strategies:
Utilizing multiple carriers can allow businesses to leverage the strengths of different carriers and negotiate more favorable rates.
Dimensional Weight Pricing:
Dimensional weight pricing takes into account the volume of a parcel in addition to its weight, particularly relevant for lightweight but bulky shipments.
Accessorial Charges:
Carriers may charge additional fees for services such as residential delivery, fuel surcharges, or signature requirements. Understanding these charges is essential for accurate cost calculations.
Technology for Parcel Management
Parcel Shipping Software:
Parcel shipping software automates various tasks associated with shipping, such as label generation, tracking, and reporting.
Scanning and Tracking Systems:
Scanning and tracking systems enable real-time visibility into the location and status of parcels throughout the delivery process.
Label Generation Systems:
Label generation systems automate the creation of shipping labels, ensuring accuracy and compliance with carrier requirements.
POD (Proof of Delivery) Solutions:
POD solutions provide electronic confirmation of delivery, including signatures or GPS coordinates, offering verifiable proof of successful delivery.
Last-Mile Operations
Delivery Point Options:
Businesses can choose from various delivery point options, including residential addresses, commercial addresses, or alternative delivery points such as lockers or retail stores.
Urban Delivery Solutions:
Urban delivery presents unique challenges, such as traffic congestion and limited parking. Carriers are developing innovative solutions to address these challenges, such as using cargo bikes or electric vehicles for last-mile delivery.
Rural Delivery Considerations:
Rural delivery involves longer distances and may require specialized vehicles or delivery methods to reach remote areas.
Alternative Delivery Points:
Alternative delivery points, such as lockers or retail stores, offer convenient and secure options for recipients to pick up their parcels at their own convenience.
Quality Control for Parcels
Damage Prevention:
Proper packaging and handling procedures are essential for preventing damage to parcels during transit.
Parcel Tracking and Monitoring:
Real-time tracking and monitoring systems enable businesses to identify potential delivery issues and take proactive measures to resolve them.
Returns Management:
Efficient returns management processes are crucial for handling customer returns, including reverse logistics and processing refunds or replacements.
Claims Handling for Parcels:
In the event of damage or loss, businesses need to have a clear process for filing claims with carriers and resolving any disputes.
Carrier Network Management
Parcel Carrier Selection:
Choosing the right parcel carrier depends on various factors such as service levels, pricing, geographic coverage, and specific business needs.
Service Level Agreements:
SLAs define the performance standards expected from carriers, including delivery times, tracking capabilities, and claims handling procedures.
Performance Tracking:
Regularly monitoring carrier performance against agreed-upon SLAs is essential for ensuring service quality and identifying areas for improvement.
Multi-Carrier Management:
Effectively managing relationships with multiple carriers requires sophisticated tools and processes to optimize carrier selection, track performance, and negotiate rates.
Compliance and Documentation
Shipping Labels:
Accurate and compliant shipping labels are mandatory for all parcel shipments, containing essential information such as addresses, tracking numbers, and barcodes.
Commercial Documentation:
Depending on the nature of the goods and destination, various commercial documents, such as invoices or packing lists, may be required for international shipments.
Cross-Border Requirements:
International shipments are subject to customs regulations and may require additional documentation, such as certificates of origin or import licenses.
Digital Documentation:
Digital documentation is becoming increasingly prevalent in B2B parcel shipping, offering benefits such as increased efficiency, reduced errors, and improved traceability.
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