Learn why flat rate shipping works best for e-commerce, how much it costs to ship with UPS, USPS, and FedEx, and how it lowers shipping costs.
Overnight Shipping for Next-Day Delivery
In today’s post, we’re going to explain what is overnight shipping for next-day delivery. And how you can offer it to your customers.
In today’s post, we’re going to explain what is overnight shipping for next-day delivery. And how you can offer it to your customers.
These are the same strategies our partners use to offer next-day shipping to hundreds and thousands of customers. But players like UPS, DHL, and FedEx, as well.
Plus, we’ll show you how to optimize your operations using advanced tools and techniques.
So if you’re looking to generate more business from overnight shipping without racking up costs, then you’ll love this article.
Let’s get started.
What Is Overnight Shipping?
Overnight shipping is a term used to describe one-day express delivery. It guarantees that customers will receive their packages on the next business day. So it’s often synonymous with next-day shipping.
Does Overnight Shipping Really Mean Overnight?
People often ask if overnight shipping really is overnight.
The answer is:
It depends. (Mostly on the company that offers it)
You can ship overnight orders literally at night. And drop them off to customers at night.
But you can consider any delivery option that guarantees customers will receive their orders on the next business day as overnight shipping.
How Does One-Day Overnight Delivery Work?
Customers place an order on one date, usually during the day. The company schedules the drop-off for the next day and the driver transports it at night. So customers receive orders on the following day.
Typically, it takes one night and a few hours of the next day to deliver overnight shipments.
This is why many companies have a cutoff time at 7 PM. The cutoff time guarantees that the shipment will reach the customer the following day.
With most companies that offer this delivery service (including carriers, couriers, 3PL, and 4PL providers), overnight parcel delivery is available ONLY on business days.
Some companies do offer overnight shipping during the weekends. However, overnight delivery on Saturdays and Sundays is often more expensive than doing it from Monday to Friday.
For example, USPS offers overnight deliveries during the weekends. But they require an additional charge for overnight shipping on Sundays.
Some other overnight couriers, such as UPS and FedEx, provide only overnight deliveries on Saturdays in certain areas and for an extra charge.
What Is Guaranteed By Overnight Delivery?
Guaranteed overnight delivery means that each service provider will do its best to deliver the package on the next business day.
Still, this isn’t always easy to do successfully.
In such cases, the company guarantees that customers will receive a refund of the shipping fee if a package doesn’t arrive at the drop-off address at the promised time.
How Much Does Overnight Shipping Cost?
Like everything else, the cost of overnight shipping depends significantly on the company that offers it.
When it comes to carriers and couriers overnight shipping is considerably more expensive than standard delivery.
Overnight shipping with a carrier is $120 on average.
But this also depends on when the customer receives their overnight shipment:
- FedEx (by 8 AM): $148 (starts from)
- FedEx (by 12 PM): $118 (starts from)
- UPS (by 8 AM): $141 (starts from)
- UPS (by 10:30 AM): $111 (starts from)
- USPS (by 3PM): $71 (starts from)
- DHL (9 AM/10:30 AM in the US): $168 (on average)
- DHL (12 PM): $160 (on average)
- Royal Mail (by 9 AM): $51 (starts from/in UK)
- Royal Mail (on Saturday): $53 (starts from/in UK)
When it comes to companies that offer one-day delivery, the story is quite different.
With e-commerce companies and other businesses that offer this kind of service, overnight delivery can range from free overnight shipping to paid services and membership only offers.
For example, Amazon offers overnight delivery to Prime members at $2.99 per order for orders over $35. While for regular customers the price is $12.99 per order.
On the other hand, Walmart offers free overnight shipping for every order over $35.
But these companies and many others offer other faster fulfillment alternatives such as same-day delivery or even two-hour delivery (depending on the customer’s location).
So these prices can vary a LOT.
Read more about how to compete with Amazon delivery.
What Affects Overnight Delivery Cost?
Although there are a few flat rate overnight delivery options available, the cost of various overnight shipping services depends on multiple factors.
Here are five factors that affect overnight delivery prices:
#1 Delivery Time
The faster the delivery time for the package, the more you can expect to pay and vice versa:
When you choose a shipping service that guarantees arrival later in the day, the lower the shipping cost.
#2 Delivery Day
Most overnight couriers offer their services only during the business days.
However, some of them provide express overnight shipping over the weekends for an additional charge.
For example, USPS ships over the weekend, with the fact that it charges extra money for overnight deliveries on Sunday.
UPS and FedEx offer overnight shipping on Saturday, but it applies only to certain areas and it also costs more money compared to deliveries that take place during the business days.
#3 Weight Limit and Package Size
Logically, heavier shipments cost more to ship than lighter packages.
Besides weight, all major carriers use a pricing model that’s called dimensional weight (DIM) to calculate shipping costs.
DIM takes the dimensions of a package into account to set the shipping cost.
Dimensional weight is calculated by multiplying the length, width and height of a package, then dividing that number by a DIM divisor - a set number specific to each courier (although it can be the same number).
Shipping carriers set shipping rates based on whichever is greater: the actual weight of the package or its dimensional weight.
That becomes the chargeable weight that determines the overnight package cost.
All in all, the larger and the heavier a package, the more expensive it will be to ship.
#4 Delivery Address
Typically, the farther a package is shipped, the more shipping will cost.
The pricing is usually determined by shipping zones that carriers use to calculate shipping costs.
The more zones are crossed, the more money it takes.
Shipping zones measure the distance between a point of origin and its drop-off destination.
They are calculated based on where the order is shipped from. This means that two different points of origin with the same destination are calculated as two completely different zones.
In the US, these zones can range from Zone 1 to Zone 8. The higher the shipping zone, the more expensive the delivery.
#5 Carrier shipping agreements
Carriers offer discounted shipping rates for small businesses, while other discounts are based on high shipping volumes.
So, when choosing which carrier to work with, it could help to check which rate discounts might be available.
How to Offer Overnight Shipping to Customers?
When it comes to delivery options for order fulfillment or retail operation, timing really matters.
Providing fast delivery options is both necessary and crucial in today’s world of business.
While overnight package delivery service may seem financially and even logistically challenging.
With the right approach it can be a great way to drive customer loyalty, and therefore win against the competition.
Let’s see the list of things you should focus on.
# 1 Will You Use an Overnight Shipping Provider or In-House Delivery?
This debate is very much alive due to the rising impact of eCommerce.
Should retailers be outsourcing their deliveries or choose an in-house delivery method?
In-house delivery means that a company has its own delivery staff and vehicles to deliver orders to customers.
Many companies choose to go for this option because it provides the most control over the delivery process and if they can’t partner with a reliable third-party company.
The in-house delivery system has its pros and cons.
Pros: more control over the delivery process and customer experience, as well as reduced communication problems since the communication is only between the client and the seller, which also increases customer service.
Cons: high costs for buying or leasing delivery vehicles, complexity of tracking in-house delivery logistics and need for more manpower, risk of brand damage if drivers fail to provide good service.
Using overnight shipping provider or third-party delivery means outsourcing delivery logistics to another company.
This option provides more convenience because someone else is in charge of a wide range of complex logistical tasks.
This one, too, has its pros and cons.
Pros: businesses can focus more on their offerings, savings on marketing costs since lots of third-party companies also advertise their partners offerings and services, less workforce is required.
Cons: loss of control over customer experience, possible increase in miscommunication and logistical problems, decreased profitability over time since outsourced services are more expensive than doing it in-house.
# 2 Set the Latest Cut-Off Time for Overnight Shipping
Shipment cut-off times represent the latest time an overnight package can be delivered to a scheduled truck or flight for loading.
Setting later cut-off times provides more flexibility for both customers and retailers and is therefore often preferred.
# 3 Will You Enable Overnight Delivery on Saturdays and Sundays?
When planning a shipping strategy, it should be kept in mind that average order volume varies throughout the week.
There’s a higher demand for home deliveries over the weekends, due to the fact that most people don’t have to go to work on these days.
However, enabling overnight express delivery on Saturdays and Sundays can have its challenges that should be considered.
While the weekend deliveries are a great option for customers, the Western world still operates in a traditional five-day workweek, which also applies to the employees of the shipping industry.
Weekend work shifts usually cost extra, so in order to provide the same level of efficiency, companies have to cover their expenses by charging their customers more.
# 4 Determine the Delivery Zone for Overnight Shipping
Delivery zones play the integral role in online order fulfillment strategy.
As mentioned previously in this post, delivery zones are one of the main factors that affect the transportation cost.
Overnight shipping carriers utilize zones to calculate rates for services they offer.
For services that fall under the zoned category, in most cases the greater the zone the greater the shipping cost will wind up being.
Shipping zones also affect the delivery speed.
So cutting down on transit time is important because slow shipping can cause a company to lose customers.
# 5 Set the Weight Limit and Size for Overnight Packages
Besides the shipping zones, shipping cost depends on the size and weight of the overnight packages that’s being shipped.
The heavier and larger the package, the more expensive the shipment.
Usually, for anything that weighs less than one pound, there won’t be much savings.
For overnight shipments that weigh more than one pound the cost will be decreased if it’s shipped from a location closer to the destination.
How to Optimize One-Day Overnight Delivery?
You want to enhance your overnight delivery service in order to optimize eCommerce fulfillment.
Let’s see what you can do to gain some overnight shipping benefits both for your company and your customers.
# 1 Cut Costs with Forward Stocking Inventory
In order to efficiently reach as many customers as possible and to save money on shipping costs at the same time, you can use Forward Stocking Inventory.
Forward Stocking Inventory (FSI) is a process of storing goods near customers, in strategically located warehouses, which are also called forward stocking locations or field stocking locations (FSL).
This will cut your shipping cost because freight shipping to split inventory across multiple warehouses is cheaper than shipping orders individually from one centralized warehouse.
By shipping larger, less frequent shipments to these “forward” locations, efficiencies are created while delivery times for customers in a specific geographic area are significantly improved.
This is where usually a third-party logistics (3PL) comes in handy to improve fulfillment by providing strategically located warehouse facilities that many businesses can’t afford to own and operate themselves.
# 2 Raise Delivery Speed with Routing Software
Routing software can help the greater delivery efficiency, minimizing the costs to serve while improving your customer service levels and customer trust.
Route planning software uses a wide range of different parameters, including the availability of each driver, customer’s preferred delivery time, and the amount of time it takes to deliver specific products.
Advanced algorithms use this information to create efficient routes and schedules with accurate delivery times.
This also allows more deliveries to be slotted in one day.
# 3 Automate Fulfillment with Delivery Software
The rise of the eCommerce industry required new technology to support it, so now there are delivery software that allow automated shipping.
Delivery software automates shipping procedures as new orders are placed, including picking items from inventory, packing and getting packages in transit to be delivered.
The purpose of automated shipping is to automatically get new orders that need to be fulfilled and to eliminate some of the manual tasks.
Automation of delivery processes turns out to have a very positive impact on greater efficiency, which leads to greater productivity.
This all means that businesses can fulfill much more orders and process them much faster.
# 4 Continuously Optimize by Tracking KPIs
Nowadays, most companies are automating their processes and tracking key performance indicators (KPIs) mainly because of the customer experience.
Higher customer expectations are forcing companies to perform faster and with fewer mistakes. That’s why KPIs have become one of the crucial business drivers.
KPIs are also necessary for maintaining smooth operations.
For example, by tracking KPIs, managers can reduce the chances of a facility being shut down due to compliance violations.
Additionally, tracking KPIs is a must for ensuring stability and optimizing the efficiency across the whole supply chain.
When all partners work together and track KPIs, you get a system that is more efficient and profitable for everyone.
We can help you to improve overnight shipping even more: