Shipping Cost Savings Secrets: Expert Tips for Businesses in Canada

Authored by Matt Lessard

Since 2001, Matt Lessard has started numerous projects, from an E-commerce SaaS to an online store shipping to over 80 countries. Creator of Buster Fetcher®, a technology reducing shipping costs. Passionate about personal development and business growth.

If you own or manage a company in Canada, you’ve probably noticed that it’s indeed more expensive to ship a package in this country compared to the US. Right?

Believe me, we’ve handled packages from thousands of businesses across Canada and the US. And that’s exactly the same thing we’ve concluded.
In fact, a study claims that the leading cause of frustration for 42% of Canadian consumers is high shipping costs! 

This statistic further highlights the ultimate challenge that most Canadian companies face — shipping.

So, with this in mind, how can you save more on your shipping expenses? 

Well, today may be your lucky day because Buster Fetcher® gathered five expert tips to help you, and your business, save tens to hundreds of thousands of dollars in shipping costs!

And hey, these aren’t ordinary tips that you can find anywhere! These proven and tested tips are supported by incomparable knowledge and experience from analyzing millions of packages.

With the help of these tips, I’m sure that your business will be able to optimize its shipping procedures perfectly and maximize your profits. 

So, what are we waiting for? Make sure to read until the end!

1. Measure to Improve: Understand Your Shipping Costs

Did you know that every year, major carriers like Canada Post, FedEx, UPS, and Purolator hike their shipping rates? 

That’s right. These price hikes average about 5% and are due to various factors such as service level and weight. As a business owner, this is definitely a frustrating situation. 

Why? Well, to give you an idea, let me introduce you to a successful businessman. His name is Tim! He operates a Canadian e-commerce company that sells baby products.

Just like most businessmen, Tim feels helpless whenever he receives expensive invoices from his shipping carrier. He thinks that there’s nothing else he can do but let out a sigh, shake his head, and pay for the expensive shipping costs anyway.

Do you know why Tim feels helpless? It’s because he doesn’t understand the factors that make his shipping costs so expensive. He only accepts the fact that he has to pay for them and never really dives deeper into what he can change and improve.

But if you want maximum profitability and savings for your business, that’s exactly what you have to do — measure the components that make up your total shipping costs.

Examine surcharges, additional insurance, and anything that might add unnecessary costs to your shipping expenses. And from there, analyze, remove, and improve what you can!

Oh, and make sure to read until the end because I will show you the two best methods on how to measure the shipping expenses of your business. And not only that, you’ll also discover what Tim did to maximize his savings!

2. Don't Get Drowned by Surcharges

Ah, surcharges. Did you know that these additional expenses have the power to double your shipping costs? Yes, it is that serious.

Believe me, a base shipping cost of $6 can easily turn into $12 real quick! 

If you add in specific surcharges such as fuel surcharges, volumetric equivalence, and peak season surcharges, it’s not impossible. 

So to give you an idea, here are some of the most common surcharges to look out for! 

• Fuel Surcharges: To compensate for the fluctuating prices of fuel, shipping carriers usually impose fuel surcharges. As of now, Canada Post’s fuel surcharge for domestic services is at 27.5%.
  
• Volumetric Equivalence: When you ship a package, the cost isn’t just based on the product’s weight alone. It’s also affected by how much space it takes up! So if you’re shipping a big but lightweight package, you might end up paying more because it will occupy a large space in the cargo truck or plane.
  
  Basically — Volumetric Equivalence helps to ensure that shipping costs are fairly distributed because it considers both the size and weight of your package. So make sure to optimize your packaging because it can potentially reduce shipping costs by up to 10%!
  
  
• Peak Season Surcharges: When you plan to ship packages during the peak season, such as holidays, additional costs may also be incurred. So plan accordingly!
  
  
• Residential Surcharges: Carriers impose extra costs when delivering packages to residential areas. Take note — these are addresses that are expected to have less population and less demand compared to others.
  
  

Canada Post

• Services Offered: Unlike our competitors, Canada Post does not apply additional surcharges such as extended area surcharges or surcharges for delivery to residential areas, which can add significantly to the final cost of shipping
• Cost: N/A
  

FedEx 

• Services Offered
  • For FedEx Ground:
    The scope of a customer's volume shall be determined by FedEx in its sole discretion. The Demand — Residential Delivery Charge will be assessed in addition to the customer’s Residential Delivery Charge. Any contracted discount the customer may have on the Residential Delivery Charge will not apply to the Demand — Residential Delivery Charge. For invoicing purposes, this charge will be combined with the customer’s Residential Delivery Charge.
    
   
  • For FedEx Express:
    The scope of a customer's volume shall be determined by FedEx in its sole discretion. The Demand — Residential Delivery Charge will be assessed in addition to the customer’s Residential Delivery Charge. Any contracted discount the customer may have on the Residential Delivery Charge will not apply to the Demand — Residential Delivery Charge. For invoicing purposes, this charge will be combined with the customer’s Residential Delivery Charge.
• Cost: 
  
  • For FedEx Ground: $1.00 - $2.00 per package
    
  • For FedEx Express: $1.50 - $2.50 per shipment

UPS

• Services Offered: A surcharge will apply to any delivery to, or a UPS On-Call Pickup request from, a location that is a home, including a business operating out of a home.

• Cost: $4.40 per delivery shipment or pickup request

• Exception: $110 per UPS Worldwide Express Freight shipment. 

Purolator

• Services Offered: An additional charge will be applied when the destination point is deemed by Purolator to be in an area that is primarily residential or is of a low business (commercial) density. This charge does not apply to Purolator Express® Evening or Purolator Ground® Evening shipments.
• Cost: $4.45 per shipment
  
  

Interested in learning how Purolator and Canada Post compare in more details? Read our comparison here.

3. Are You Overpaying on Insurance?

A lot of people say that it’s better to be safe than sorry. But if you ask me — it doesn’t work like that all the time. Especially when you’re bound to lose lots of money! 

We had this one client who decided to pay additional insurance coverage for his products. You know, to be safe just in case something bad happens. 

So after analyzing his shipping profile, we discovered a pattern that truly shocked us — he systematically paid $20,000 worth of insurance coverage in just one year! 

When we asked him how many times he was able to claim refunds for damages, you know what he said? Only twice. Just twice! 

Sigh. That’s a lot of wasted money right there. Here’s what he did after that — he stopped availing of the additional insurance and just relied on the basic $0 to $100 insurance that already comes with the package. 

And voila! Just like that, we can say that he already saved $20,000 for the year. So if in case you’re wondering:

• Canada Post’s services such as Priority™, Xpresspost™, and Expedited Parcel™ include up to $100 liability coverage against loss, damage, or COD service failure. So make sure to declare your insurance! 

• Hey, if you’re uncomfortable with removing the additional insurance coverage for your products, there’s another option. Third-party insurance providers are also available and can sometimes offer more competitive rates.

4. Get What's Yours: Refunds & Claims

In the world of business, every dollar counts. It’s important to maximize your savings and profits as much as possible, so make sure that you’re not leaving money on the table! 

• Late Deliveries: This is where we, Buster Fetcher®, made a name for ourselves. The thing is — most carriers offer guaranteed services. They will promise to deliver your packages to the right customers, in one piece, and on time. If they fail to do any of those, especially the last one, you’re entitled to claim your well-deserved refunds! 

• Insurance Claims: When a package is lost or damaged, some businesses would just accept its fate and re-ship it to avoid bad customer reviews. But hey, you can also claim refunds for these cases if the shipping service you’re using comes with free insurance coverage! 

• Unused Shipping Labels: If you thought that you could generate shipping labels and simply throw them away when you don’t need them, you’ve got it all wrong. Remember this — if you’ve generated a shipping label and it appears on your manifest, you’re required to pay for it.

  And be careful because if these unused shipping labels pile up, it might definitely cost you a lot of money!

  But hey, the good news is that there are ways to avoid this problem. Just check out Buster Fetcher’s article Unveiling Hidden Costs: How Unshipped Shipping Labels Could Be Draining Your Business's Budget to learn more! 

• Review your Invoices: Ah, and last but not least — Make sure to review your invoices regularly! Regular shipping audits can help you identify overcharges and service failures.

   

  Let’s face it, nobody’s perfect. Either you or one of your employees can make mistakes and overlook potential saving opportunities for your business. Conducting regular shipping audits can help you avoid these mistakes!

5. Train Your Team Right

We all know that newly hired employees often make careless mistakes, right? They will commit a lot of errors and overlook some important details along the way. But that’s normal! 

There’s always a learning curve where they will struggle to understand the services of different shipping carriers, what dimensions and weights to declare, and such. 

For example, your team will also handle the crucial task of sending the manifest every day. Doing this wrong could cause a lot of problems and unexpected costs for your company, so beware! 

So one of the best things you can do for your company is to invest in the training, knowledge, and expertise of your team. 

I know that it’ll cost you some money in the beginning but trust me, you will enjoy the fruits of your investment in the long run! 

The Two Best Methods to Measure Shipping Expenses

• Manual Method: Now, there’s no doubt that this is absolutely one of the most effective ways to unlock saving opportunities for your business. The only problem? It takes a lot of time!

   

  So basically, what you need to do is carefully gather and review all of your shipping invoices for the past 6 months. Then, you can analyze, compare, and identify patterns that can potentially help you gain some savings.

  
  

  It helps if you can organize all these records in one file like a spreadsheet using MS Excel or Google Sheets for better tracking.

  
  

• Advanced Method: Of course, we don’t want you to spend hours or maybe days manually analyzing all your invoices for the past 6 months.

  
  

  We know that for business owners like you, time is gold. And speaking of gold, we’re giving you the key to the treasure chest. Yes, here comes the Buster Fetcher® Analysis and Comparison Report!

  
  

  This comprehensive report contains lots of valuable insights, data, and observations based on your shipping profile.

  
  

  It gives you a clearer picture of your company’s shipping operations which in turn allows you to identify areas you can optimize to increase your savings.

Oh, and remember Tim? He chose to optimize his shipping by purchasing the Buster Fetcher® Analysis and Comparison Report. And guess what? It was one of the best decisions of his life!

Cutting Down on Shipping Costs: Conclusion

So, what do you think? By learning these five tips and practices, you’ve already increased the chances of your business saving lots of money. 

But hey, I just want to remind you that there's absolutely a better and more efficient way to do it. And it’s by subscribing to Buster Fetcher®! 

We care about you and your business. And we don’t want you to spend hours or maybe days of your precious time going through the tedious process of identifying saving opportunities. 

So we’ll do it for you! You can always subscribe to our services for free. And you’ll only need to pay a percentage once we’ve secured your refunds. 

See? No matter where you look at it, it’s definitely a win-win situation for your business. 

So, what are you waiting for? Partnering with us would be one of the best decisions of your life! 

References

• The Era of Expensive Parcel Delivery is Over in Canada as Sendle Brings Affordable, 100% Carbon-Neutral Shipping to Small Businesses
• How to Reduce Shipping Costs for Small Businesses [11 Tips]
• Fuel Surcharges on Canada Post Services
• How Packaging Optimization Can Reduce Freight Costs
• Parcel Services Shipping in Canada - Coverage Options
• Shipping Management System Development ☑️ A Detailed Overview
• Parcel and Freight Invoice Auditing - A Complete Guide | FreightPOP