Rising Parcel Shipping Costs in 2022: How to Cut Your Shipping Expenses

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November 21, 2022
Parcel shipping costs have been rising since 2020. Find out some ways you can save yourself and your company time and money. Read about it now!
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Parcel shipping costs have been rising since 2020. We’ve all seen inflation on the consumer end, whether we’re checking out online or paying at the gas pump. And skyrocketing freight rates have made headlines. Today, we’re going to focus on the impact of the increasing cost of shipping on your business and what you can do about it.

But don’t lose hope—while we’re going to explore climbing shipment costs in this article, we’ll also chat about what your business can do to make shipping more efficient.

First, let’s look at the stats to see exactly how much parcel shipping postage costs have grown from 2020 to 2022.

In this post, we’ll cover:

  • Parcel Shipment Costs: 2020 - 2022
  • The Cost of Erroneous Shipping
  • How Address Autocomplete and Validation Help
  • Start Reducing Shipping Costs Today

Parcel Shipment Costs: 2020 - 2022

The following table shows retail shipping options and prices for the United States Postal Service (USPS), United Parcel Service (UPS), and FedEx since 2020. Pay close attention to the UPS shipping rates. That’s what we’re going to use for our example later to provide a visual of what this means for your business.

Note: In general, zone 2 ships to the next city over, and zone 8 ships across the United States.

Shipping Method202020212022
USPS Small Flat-Rate Priority Mail Box$8.30$8.45$10.40
USPS Medium Flat-Rate Priority Mail Box$15.05$15.50$17.05
USPS Large Flat-Rate Priority Mail Box$21.10$21.90$22.45
USPS Padded Flat-Rate Priority Mail Envelope$8.40$8.55$10.60
UPS Ground - 5 pounds, zone 2$9.67$10.46$11.24
UPS Ground - 5 pounds, zone 8$14.97$16.02$17.13
UPS Ground - 10 pounds, zone 8$18.55$19.57$20.84
FedEx Ground - 5 pounds, zone 2$9.87$10.46$11.24
FedEx Fround - 10 pounds, zone 2$11.41$11.92$12.69
FedEx Ground - 5 pounds, zone 8$14.97$16.02$17.13
FedEx Ground - 10 pounds, zone 8$18.55$19.57$20.84
Table source: “Then and Now: How Expensive Is Freight and Parcel Shipping?”

As you can see from the shipping carriers table, shipping costs have been steadily increasing for USPS, UPS, and FedEx for the last few years. From 2021 to 2022, UPS and FedEx rate increases were in the 6 - 7% range and are predicted to continue rising.

That means the shipping prices—and consequences—of shipping label mistakes at your business are on their way up too.

The Cost of Erroneous Shipping

Here’s a chart we created to show the estimated business expense of erroneous shipping in 2020, 2021, and 2022.

Rising cost of parcel shipping graph

On this chart, we looked at the number of packages shipped to wrong addresses using UPS Ground, 10 pounds, zone 8.

Each package delivery to the wrong destination costs your business even more in 2022 compared to 2021 and 2020. Let’s look at an example.

Say you’re a retailer with customers who make errors at the eCommerce checkout form 5% of the time. If your company ships one million packages a year, that’s 50,000 mistakes—and 50,000 packages shipped to wrong locations.

In 2020, having 50,000 shipping mistakes wasted an estimated $927,500. And in 2021, 50,000 shipping mistakes wasted an estimated $978,500. But in 2022, those 50,000 shipping mistakes now waste an estimated $1,042,000. That’s over a million dollars in money wasted shipping packages to wrong addresses.

Plus, these costs are estimated before factoring in the additional cost to reship or replace the packages. Add the extra employee time used up by the shipping debacle and the angry customers, and you have a huge mess that goes beyond the warehouse—yikes.

Now, more than ever, you don’t want to waste money shipping packages to wrong addresses.

So, what’s the solution?

Make sure your customer addresses are correct—the first time.

How Address Autocomplete and Validation Help

Address autocomplete and address validation make it easy to collect the correct addresses from customers. By using both, you’ll reduce shipping postage costs, lost packages, returned mail—and angry customers—to make shipping more efficient.

Here’s the scoop.

Address Autocomplete

Address autocomplete is an address form feature that suggests valid street addresses to your customers as they type their address into a form, like the one at checkout. This reduces keystrokes and mistakes. As a result, addresses can be entered quickly and accurately.

The Smarty US Address Autocomplete and International Address Autocomplete APIs prevent customers from entering misspelled, invalid, incomplete, and fake addresses at checkout. Ensuring that only valid addresses can be entered will greatly reduce erroneous shipping.

The Address Autocomplete APIs also keep poor data out of your company’s database. Even when future parcel shipping costs increase, at least you won’t cut into your profits by sending packages to invalid addresses.

Address Validation

Address validation—also known as address verification—is the process of checking your customer’s mailing address against an address database. If the address entered matches an address in the official database, then the address “validates.” Any non-matching addresses are marked as “invalid.”

So, address validation determines whether an address is not only real, but also spelled and formatted correctly, listed in the official mailing address database, and registered with the USPS.

Smarty provides lightning-fast Address Validation APIs for the United States and international addresses.

Maybe you’re thinking: “These tools sound great, but my database is already full of bad addresses. Is it too late to fix the mess?”

Don’t despair—Smarty Address Validation will clean up dirty addresses that already exist in your system.

Here’s how it works:

First, address parsing breaks down the address into its components: city, state, and ZIP Code. Next, address standardization formats the mailing address so that it matches the standard address format specified by the governing postal authority. This includes correcting misspelled words, adding missing data (like the Zip Code or street suffix), and ensuring proper abbreviations are used (like “St” and “Ave” and “OH”). Last, validation looks for an address’s twin in the official address database. If it finds a match, the address is valid.

Now, your addresses are accurate. If you’re not breathing a sigh of relief yet, you certainly will when you stop wasting money on shipping mistakes.

Start Reducing Shipping Costs Today

Every dollar—and package—counts. But despite the rising cost of parcel delivery options, address autocomplete and address verification will help. It’s time to make shipping more efficient and avoid unnecessary expenses.

Want to try Smarty Address Autocomplete or Address Verification? Sign up for a free account today.

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