How Small Business Owners Can Save Time and Money on Ground Shipping

Instead of eating into profits using expensive air-delivery services, how can retailers send cargo more cost-effectively?

Online retail sales in the United States continue to climb. While that active market offers great opportunities for small businesses and independent online retailers, increased competition makes it harder for small- to medium-sized businesses to stay competitive with online giants. One of the main areas where small businesses lose money is shipping costs.

Homes are roughly three times as expensive to deliver to as business addresses, which leaves retailers struggling, as most consumers now expect free shipping in line with what global e-retail giants offer. For many businesses, shipping is one of the largest expenses, often second only to marketing.

So how can retailers send cargo more cost-effectively? Here are three tips for saving money shipping with ground transportation.

1. Use online load boards

Online load boards are a step in the right direction in terms of "sharing economy" freight services. Put simply, these platforms allow brokers and individual transport owners to post their routes in advance to fill up any extra space available for the journey. While these boards won't solve the home-delivery dilemma, they can reduce costs by shipping inter-state in a shared transport, then paying a local delivery service for the final-leg home delivery.

Using a load board lets shippers move overflow freight by matching their load with empty carriers traveling from their base area to a desired destination. This is particularly useful for companies that don't have a consistent group of carriers, or that don't ship frequently, such as a shop that does most of its business in-store but also offers online retail.

On well-traveled routes, load boards let retailers shop around for the best price by contacting a number of carriers at once. Be aware that many freight brokers also use these services, so you'll likely receive offers from brokers too. Note that not all load boards are free, and in shipping you tend to get what you pay for, so cheaper sourcing can mean slower delivery and added risk in security and insurance.

2. Keep an eye on off-peak delivery

Despite traffic congestion, fuel consumption, and transportation costs being higher during peak hours, most land carriers still only haul during the day. In many cities, the overwhelming majority of deliveries are made between early morning and early evening, when demand and prices are highest.

Off-peak deliveries (OPD) have been trialed in cities like Chicago, New York, and Toronto, with promising results. These programs reduced congestion and showed considerable savings in both travel time and overall trip cost. Studies of OPD have found:

1. Travel-time savings for all highway users of roughly 3 to 5 minutes per trip.
2. Off-peak delivery estimated to be 30 to 40 percent cheaper for carriers (and therefore shippers) than regular daytime deliveries.
3. Carriers that switch to off-hours saving roughly 48 minutes in travel time per delivery tour and 1 to 3 hours in total service time per tour.

When contracting carriers for individual trips, ask about their policy on off-peak delivery and try to negotiate lower prices for trips made in off-peak hours. For companies with regular land deliveries, it may be worth privately contracting a driver or using an on-demand shipping service that delivers during off-hours.

3. Use freight auction sites

Auction-style freight platforms work like an eBay of the freight industry. They feature large networks of trucking companies and owner-operators who bid for ground-shipping jobs posted on the platform; the lowest bidder wins the contract to haul the freight.

The benefit for retailers is that they can post a job and wait for carriers to bid each other down to get the best deal. As with load boards, this means sending freight with unknown drivers, which increases risk, but compared to premium courier prices, the trade-off may be worth it.

As the retail market continues to grow, shipping will only become more of a cost for small businesses using traditional channels. It's up to thrifty business owners to assess all the options available so their goods arrive on time and in perfect condition, without breaking the bank.