Shipping Costs in Canada: A Comprehensive Overview

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.

The cost of shipping plays a crucial role in a company’s logistic strategies and budget planning. 

Yes, and it isn’t a simple line item on a budget sheet that you tend to overlook! 

If you want to maximize your profits, you have to be aware of your company’s shipping expenses.

Learning how to navigate shipping costs effectively is key. Once you do that, deciding what works best for your company will be much easier! 

What Are the Factors Affecting Canada Shipping Costs?

Many factors may affect shipping costs in Canada and understanding these gives e-commerce businesses an edge over their competitors.

How? Well, it helps your company to estimate the cost of shipping.

This results in better strategies for controlling shipping expenses. Which then helps increase profit margins and sales percentages. 

The bottom line? It allows e-commerce businesses to grow. 

Interesting, right? Well, here are some of the factors that you should consider:

1. Distance: It’s simple! The farther the destination from the origin, the higher the shipping rates will be. 
2. Weight & Dimensions: Heavier packages take up more space in the carrier’s vehicle. So, it needs more energy to transport. The more energy it needs, the higher the cost of shipping.
3. Shipping Method: Another factor to consider is the method of shipping. Of course, standard shipping will be much cheaper compared to express shipping. 
4. Delivery Speed: The urgency of delivery also plays a huge part! For example, faster delivery needs more efficient logistic arrangements. Costing a lot of money to organize! 
5. Surcharges: These are basically additional fees added to the base cost of shipping a product. One great example here is fuel surcharges! As we can see from Canada Post’s report, these fuel surcharges may increase or decrease weekly, as fuel prices change. 
6. Extra Services: It’s also important to know that other services may add up to your shipping rates. These include package tracking, insurance, signature upon delivery, and more. 

Finally, keep in mind that shipping rates may vary depending on shipping providers. So conduct a shipping cost comparison if needed.

The question is, what are your options for these shipping providers? Read on to find out! 

A Look at Your Options: Top 4 Shipping Services in Canada

There are several major shipping carriers that operate within Canada. According to Statista in 2020 the leading parcel shipping providers were Canada Post with a market share of 24%, UPS with 15%, Purolator with 10%, and FedEx Canada with 8%. 

Comparing and contrasting the different features of these shipping carriers is important. 

Moreover, pricing structures and delivery timelines are deciding factors in estimating shipping costs.  

Have a look at the table below consisting of all the important details to note:

Let your box do the talking. Make it highlight your brand’s uniqueness, creativity, and commitment to its customers. 

Canada Post

• Services Offered: Regular mail, Expedited Parcel, Xpresspost, Priority.
• Pricing Structure: Based on weight, distance, and size. Additional fees may apply for various services and surcharges.
• Delivery Timelines: Regular (2-9 days), Expedited (1-7 days), Xpresspost (1-2 days), Priority (Next day)
  
  

FedEx Canada

• Services Offered: FedEx Ground, FedEx Express, FedEx Express Freight, FedEx (LTL) Freight.
• Pricing Structure: Based on weight, distance, and size. Additional fees may apply for various services and surcharges.
• Delivery Timelines: Ground (1-7 days), Express (Next day, 2-day, 3-day)
  
  

Purolator

• Services Offered: Purolator Ground, Purolator Express.
• Pricing Structure: Based on weight, distance, and size. Fuel surcharges and other fees may apply.
• Delivery Timelines: Ground (2-5 days), Express (Next day, 2-day), SameDay (Within hours)
  
  

UPS

• Services Offered: UPS Express Critical ®, UPS Express® Early, UPS Express, UPS Express Saver®, UPS Expedited®, UPS Standard®.
• Pricing Structure: Based on weight, distance, and size. Additional fees may apply for various services and surcharges.
• Delivery Timelines: Express Critical (urgent), Express Early (1 day), Express (1 day), Express Saver® (1 day), UPS Expedited (2 days),  Standard (Schedule)

Three Ways to Calculate the Cost of Shipping in Canada

Now, navigating through shipping fees doesn’t have to feel like solving a puzzle! 

With the right tools, you can easily calculate the costs. Helping you budget better and improve your shipping strategies. 

Here are three ways to do it:

1. Online Calculators

An accessible way to get quick estimates on shipping costs is by online calculators.

Some of the reliable online calculators you can use are FedEx and Purolator. 

These user-friendly tools only need specific details to start estimating shipping costs.

Some of the information you should input are shipment origin, destination, and date. You will also need to specify the packaging and weight.

After doing that, the online calculator will already provide an estimated shipping cost. Easy, right?

But wait, as a business owner, you have to understand that these free online calculators normally give overestimated “public” prices. This means that these answers are more expensive than they should really be! 

So don’t be afraid because when you have an account, you can have as much as a 40-60% discount off the “public” price.

2. Rate Tables

There are also ready-made rate tables to make estimating shipping costs much easier.

They contain a more detailed view of shipping rates in certain regions. Rate tables base these estimates on weight, size, and destination.

Canada Post has a rate table where you can compare shipping rates for Canada and other countries.

3. Shipping Software

Finally, e-commerce businesses can opt to use shipping software. This can be a game-changer in calculating shipping fees! 

There are several popular shipping software that can help simplify your Canadian shipping cost calculations. Here are some examples:

1. ShipStation. This is a fulfillment management platform that streamlines and automates the shipping process of your company. 
2. Shippo. It offers discounted shipping rates and helps businesses track packages, schedule pickups, and print shipping labels efficiently. 
3. EasyShip. This platform helps businesses streamline the entire shipping process for companies. It also helps manage import duties, taxes, and documents.  

BONUS TIP FOR LOW RATES:

If you’re looking to get special rates with Purolator, then try to explore Buster Fetcher® Shipping Club! 

How do I calculate shipping costs?

Online calculators, rate tables, and shipping software are helpful in calculating shipping costs. All these tools consider specific factors such as package weight, size, destination, etc.; to provide an estimate accurately.

Five Strategies to Reduce Your Shipping Fees in Canada

Shipping fees take a significant chunk of the budget for many businesses. Finding ways to reduce them can help you unlock large savings! 

Your ultimate goal would be to find the most cost-effective options for your company. But, how do you do that?

Here are five strategies to help you keep these costs in check:

1. Get Various Quotes: Comparing shipping costs from different shipping companies is key. It allows you to maximize your options and choose the most cost-effective offer.
2. Negotiate Rates: This is a common practice in the industry. Shipping carriers want to partner with businesses to grow. So make use of the situation and negotiate rates to your advantage.
3. Leverage Volume Discounts: Larger retailers are the target market of shipping companies. Asking for volume discounts would be a huge factor so cut shipping costs! 
4. Optimize Packaging: This is a proven solution to lower shipping costs. Reducing dimensional weight, for example, is one way to do it! 
5. Use a Shipping Analyzing Platform: As a business, you should be able to analyze and interpret all the data involved in your operations. This is especially important if shipping is an essential part of your business. With Buster Fetcher®, you can easily analyze all these data in one well-structured dashboard and let the professionals interpret them for you. In this way, you can better prepare for negotiations with your carrier and claim refunds faster!

Wait, we got something more for you. If you want to know how to lower your next shipping invoices, you can download our 3-Step Guide and unlock greater savings! 

What are the Additional Considerations and Fees You Need to Know?

Budgeting for shipping costs isn’t an easy task. There’s more to consider than just basic shipping rates. 

Several other factors can affect your final costs. Understanding these helps businesses to avoid unexpected expenses:

1. Insurance

Shipping insurance protects your goods from various circumstances. This will apply when the product gets lost, damaged, or stolen while in transit. The owners should expect to reimburse their fees based on the declared value of the product.

2. It Elevates the Customer Experience

You also have to be aware of custom fees or duties especially if your company offers international shipping.

3. Taxes

One thing that may surprise businesses is the cost of taxes. Knowing the amount of duties and taxes to pay is a great advantage. 

The Canada Border Services Agency provided an Estimate Duty and Taxes Tool to help estimate taxes. But, it’s important to note that this only applies to goods for personal use. 

4. Fuel Surcharges

Shipping companies add these extra fees on top of the base rates to compensate for the inconsistent fuel prices on the market. It varies depending on the parcel services whether it’s domestic, USA, or international.

Being updated with the latest fuel surcharges is a worthy advantage. Here are the reports of the top shipping carriers in Canada:

• Canada Post surcharges report
• FedEx Surcharges Rates/Overview
• UPS Surcharges
• Purolator Surcharges

Canada Shipping Costs Overview: Takeaway

Understanding Canada shipping costs helps companies to get ahead of the competition. 

First, exploring strategies is important since shipping rates are more expensive in the country. It also avoids unexpected expenses along the way. 

Second, maximizing your shipping options results in effective budgeting and logistics planning. It then eventually translates into increased profitability!

Lastly, learning how to apply the most cost-effective strategy helps your company cope with the ever-changing trends of the industry. Do you want to lower your next Canada Post invoice? Optimize your shipping costs with these strategies from Buster Fetcher®! 

Oh, and guess what? You can also download our 3-Step Guide on how to lower your next shipping invoices. You’re welcome! 

References

• Fuel Surcharges on Canada Post Services
• Parcel Services Shipping in Canada - Overview
• Shipping Services - Delivery Times & Hours | FedEx Canada
• Next Day or More Expedited Shipping in Canada | Purolator
• Shipping Costs and Rates | UPS - Canada
• Calculate Shipping Rates | FedEx Canada
• Estimate Time & Cost
• Canada Post Consumer Prices
• Estimate Duty and Taxes