E-retailers, including Amazon.com and Wal-Mart, slashing international shipping costs by an average of 24% to 57% by repackaging items into smaller packages, finds study
December 13, 2011
According to a study by shipping services company Bongo International LLC, a group of 16 e-retailers slashed their international shipping costs by an average savings of 24% to 57% by repackaging items into smaller packages, Internet Retailer reported on De. 12.
The study involved a group of 16 retailers, including Amazon.com Inc., Macy’s Inc. and Walmart Stores Inc., and examined over 5,000 packages that were ordered online and then sent to customers around the world.
After the customers made their purchases, their orders were sent to an international distribution center located in the United States. Under a Bongo International service provided at the distribution center, the orders were often repackaged into smaller packages, which lowered the final shipping by an average savings of 24% to 57%.
Across all of industries considered in the study, shipping costs were reduced by an average of 32%.
Shipping costs, which are set by carrier companies, are measured in one of two ways: the actual weight of the package, or the package’s dimensional weight, which is based upon a calculation involving the package’s weight and volume.
According to Bongo, domestic and international dimensional weights are calculated differently. The formula for domestic dimensional weight is length times weight times height divided by 166, while the formula for international dimensional weight is length times weight time height divided by 139.
While the difference between a package’s actual weight and dimensional weight are typically negligible when it comes to domestic shipping, the lower denominator used in the international formula means that an international package’s dimensional weight is often much higher than its actual weight.
The primary source of this article is Internet Retailer, Chicago, Illinois, on Dec. 12, 2011.