The rapidly growing global e-commerce market has drastically increased the number of packages moving business-to-business (B2B) and business-to-consumer (B2C). In 2022, Canada’s retail e-commerce revenue was about $79 billion Canadian dollars ($58 billion USD), and researchers predict double that amount in the next five years.
Small-package shipping has become the primary way businesses keep up with the expectation of one- to two-day shipping that retail e-commerce companies like Amazon have established as the norm. In this article, you’ll discover how small parcel shipping works, how it differs from freight shipping, and how it fits into your shipping strategy.
What Is Small-Parcel Shipping, and How Does It Work?
Small-parcel shipping is the best option for fast, one- to two-day shipping of small packages going directly to the customer. It involves picking items from a warehouse or other storage facility, packing them in the appropriate packaging, and giving the parcel to a carrier for delivery. The packages are generally less than 70 pounds and small enough for one person to carry.
Carriers or local courier services typically handle last-mile delivery for small-to-medium businesses that have in-house fulfillment or use demand forecasting to forward-stock items in warehouses around the country. Forward-stocking items is a strategic way for companies to cut delivery time to one or two days, no matter where the customer is.
In Canada, 78% of transportation and logistics companies believe last-mile delivery is the least efficient process of the supply chain. E-commerce companies continue to expand, and other businesses are shifting focus from brick-and-mortar stores to online shopping.
E-commerce companies address last-mile delivery inefficiency with various strategies, such as incorporating package pick-up services and adding more fulfillment centers across the country. As online shopping grows, small parcel shipping strategies constantly evolve.
Freight vs. Small-Parcel Shipping: How Are They Different?
Freight shipping is for moving large amounts of product or oversized packages, usually on pallets or in containers, to one place. The shipment process is more lengthy and complex, sometimes involving several modes of transportation like plane, ship, rail, and truck. The increased complexity of freight shipping means higher costs for businesses compared to small package delivery.
With small-parcel shipping, individual packages go to many different addresses via smaller delivery trucks or vans that carry up to 100 parcels at a time. These carriers make multiple stops to drop off packages, while freight shipments generally go directly to the customer.
Typically, freight includes any shipment that weighs over 150 pounds and has dimensions larger than 30” x 30” x 30”. Packages below that weight and size are better off going through small-parcel shipping services. However, some carriers will accept packages over 150 pounds if you pay the extra shipping cost.
Small-parcel shipping is best in the following circumstances:
- Multiple packages are going to numerous addresses
- Your business or location doesn’t support freight trucks
- The shipment is going to a residential address
- You or the package’s receiver need live shipment tracking
Types of Transportation for Small-Package Shipping
You’re likely familiar with the final stretch of a small-package delivery if you’re one of Canada’s 27.6 million online shoppers. Before the parcels end up in a delivery van, they sometimes have to travel via other modes of transportation to get to their destination.
The following are the most common modes of transportation for small-parcel shipping:
- Ground is the leading delivery type for packages from small to medium businesses and can involve ground or air transportation. Ground shipping is more affordable and delivers within one to five business days, while air shipping is best for next-day delivery. Depending on the location, carriers like the post office can do next-day shipping with priority mail services.
- Ocean allows companies to ship their products globally, usually involving bulky freight in large quantities. Businesses often choose to ship over the ocean instead of air because the cost is significantly lower.
- Air is the fastest mode of transportation and the most expensive of all shipping options.
While transportation over air and ocean is more common for freight, international shipping services can handle the shipment of smaller packages overseas. The carriers work with businesses to deliver their products within a particular timeframe, and a shorter delivery time typically means a higher cost.
The Advantages of Small-Parcel Shipping
Small-parcel shipping might not be suitable for massive B2B shipments, but many companies rely on this smaller-scale shipping method for several reasons, including:
- Shipment Tracking: Businesses that send tons of packages domestically and internationally need to be able to track the progress of their shipments. Carriers use innovative shipping software to follow packages every step of the way and send communication to the recipients about their orders. Tracking cuts down on undeliverables, lost shipments, and returns.
- Cost: Small-parcel shipping is cheaper than freight, even with a higher volume of packages. Some carriers even offer bulk discounts for small-package shipping. The typical cost to ship a small package can range from $4 to $100, depending on the weight, travel distance, and delivery speed.
- Eco-friendly Shipping: Zero-waste packaging is becoming more popular among consumers, and small package shipping makes it easier to make fulfillment as environmentally friendly as possible. Minimizing the amount of packaging in their shipments also allows businesses to avoid extra costs associated with higher dimensional weight (DIM).
As the world continues to trend towards online shopping, companies will have to continue adapting their shipping strategies to meet consumer demands. Because of companies like Amazon and other giant e-retailers, shoppers have come to expect fast, efficient shipping. To keep up with customer expectations, many businesses turn to third-party logistics companies like Encore Deliveries to get the job done.
At Encore Deliveries, we have the cutting-edge resources needed for efficient small-package shipping, including climate-controlled warehouses across the country, order processing for same-day deliveries, shipping labels with barcodes for tracking, and advanced inventory management. You can depend on our highly qualified team to deliver your products exactly when your customer needs them.
Get in touch today to inquire about our flexible delivery services.