During the last decade, telecommunication companies had to invest billions of dollars in their network capacity to handle the onslaught of “free” broadband data over networks that were tuned for voice calls and texts. The result of that investment was a change in their business model from unlimited data to pay-based data plans. 

As consumer commodity purchasing over the web has taken hold, traditional parcel carriers are finding their networks similarly strained by the need for additional capacity to handle bulk. In addition, the rise of ecommerce in general means more small retailers, including individual sellers, are shipping items of all kinds. The use of standard sized boxes means that items are often packaged in boxes that are larger than needed. As a result, we recently saw that some major carriers have taken a page from the freight transportation playbook and will base charges not only on weight, but on dimension by January 2015. It’s a logical move on the carriers’ part and is likely to be followed by other parcel-based carriers in time.

So how will these changes impact retailers and their customers next year? It is likely that this will have some impact on retailers, depending on what they ship. For instance, if a retailer only sells and ships guitar picks and strings, it may not have much impact at all. However, if a retailer ships a variety of lightweight items in different shapes and sizes, it could boost shipping costs enough to put a squeeze on budgets. 

For instance, dimensional pricing is based on a price for a specific weight based on box size. If you have less weight in the box for the size, you pay a surcharge. On a box that is 12x12x12, any weight below 11 pounds adds a charge. A large snow globe, 6 ½ inches high that is fragile, and therefore has packing that fits into a 12x12x12 box weighing about 5 pounds, will cost an additional $1.13 to $3.42 depending on the zone; an increase of 12 to 31%.

The Intelligent Mail Package barcode (IMpb) may also play an even more important role in shipping operations next year as parcel volumes grow for some retailers. This next generation tracking barcode for Parcels and Extra Services from the U.S. Postal Service will offer the same visibility to parcels as their private counterparts — and many times — with more competitive rates. In addition, the IMpb can help retailers reduce costs, gain greater visibility and retain control over their entire parcel spend. Full rollout of IMpb quite possibly might represent a sea of change in the domestic parcel shipping industry, as the USPS now becomes a stronger option for parcel shipping.

Using an IMpb label will allow shippers to get the best rates for packages and avoid extra fees, and provide automatic parcel insurance ($50 for Retail and Commercial Base Pricing; $100 for Commercial Plus Pricing for Priority Mail).

An IMpb compliant label also provides end-to-end tracking and package visibility, much like private express carriers. 

If you think of a package as an extension of a company’s customer service experience, the value of this new service becomes clear. IMpb provides transparency to both shippers and receivers so packages can be granularly tracked, thereby giving them greater control over the overall experience.

Flexibility Will Be Key in 2015

For retailers looking to better manage costs next year, flexibility for adjusting parcel shipping by carrier and rates will be invaluable. One way to accomplish this is by simplifying shipping operations via a single, automated multi-carrier system. These powerful, yet scalable web-based solutions can enable retailers to compare and select the most cost-effective shipment method that meets delivery requirements for every parcel shipment. They can also help optimize, integrate and automate all shipping processes while providing the highest degree of real-time visibility and control of a retailer’s operation. 

Another factor to consider — shipping matters when it comes to consumers’ buying choices. In fact, there’s now a blurred line between the decision on a shipping method and the selection of a product when it comes to the overall buying decision and customer experience. For instance, in a recent survey we conducted, nearly half of Americans (47%) are paying more attention to shipping as part of the overall shopping experience now compared to three years ago. Among those surveyed, half (49%) have also at some time abandoned their shopping cart, whether online, in store, or over the phone, due to shipping costs. The net-net — providing a variety of shipping options can help retailers make a difference in attracting and keeping shoppers. 

By investing in a multi-carrier solution now, retailers can prepare for both the busy holiday shopping season and parcel shipping changes in 2015. Flexibility to offer and choose the best options for shipping — balancing service times and costs based on actual needs — for each and every parcel can not only help deliver a satisfying customer experience for today’s consumer, it can also have a big impact on savings in 2015. 

Jim Hendrickson is Vice President and General Manager, Logistic Solutions, Pitney Bowes Inc.