How to Manage Shipping Costs Amid Inflation

Smarter Shipping in a World of Rising Prices

Inflation has been hitting hard over the past few years. Prices are rising for food, gas, goods, and especially shipping. Ecommerce businesses are feeling the pressure. Whether you're shipping from the United States or overseas, your bottom line is affected by higher shipping rates, labor costs, fuel prices, and more.

These inflationary pressures don’t just impact one part of the supply chain—they touch everything. The global shipping industry, affected by geopolitical tensions in the Middle East, problems in the Suez Canal, and labor shortages, has seen a significant impact on both transit times and freight rates.

But here’s the good news: even in this tough inflationary environment, there are smart ways to manage and reduce your total shipping costs. Let’s break it down.

Understanding the Problem: Why Shipping Is So Expensive Right Now

Inflation and Its Effects

When we talk about inflation, we mean the general percentage increase in prices over time. It’s measured by the Consumer Price Index (CPI), and in recent years, inflation has gone up sharply in the United States and around the world.

That’s because of several things happening at once:

• Fuel costs have risen due to global demand, oil prices, and energy costs.
• Labor costs have increased due to shortages in the freight transport and manufacturing sector.
• Food prices, raw materials, and input prices are higher than they were last year.
• Geopolitical tensions, like the Houthi rebel attacks in the Red Sea, have disrupted global trade routes, forcing ships to take longer routes around the Cape of Good Hope.
• Supply chain disruptions caused by events in the Suez Canal, COVID-19, or natural disasters have added delays and additional costs.

All of these issues create a ripple effect. As freight rates and transportation costs go up, businesses face higher operational costs and smaller profit margins. These costs often lead to pass-through increases—which means the end consumer pays more.

In recent reports, industry experts have warned that this trend may continue into the coming year, especially during peak seasons like the holidays.

What This Means for Ecommerce Shipping

If you run an online store, this means one thing: you can’t afford to ignore shipping costs anymore.

Shipping now plays a significant role in your pricing, your profits, and your customer satisfaction. As consumer prices go up and market conditions shift, your ability to adapt will decide whether you maintain your competitive edge or fall behind.

This is where effective cost management strategies make all the difference.

8 Smart Ways to Manage Shipping Costs

1. Stop Using Just One Carrier

Many businesses still ship through a single carrier. That worked in the past. But in today’s high inflation, depending on just one option makes you vulnerable to cost increases, delays, and limited coverage.

Better Option:

FirstMile connects you to a nationwide network of delivery options. Using our system, your shipment is automatically routed to the best-performing partner for that order—based on ZIP Code, package size, and lead time. This helps you avoid higher shipping costs and reduce delays caused by freight demand or weather disruptions.

2. Use Real Data, Not Guesswork

Are your packages going to rural areas? Are you shipping mostly under 1 lb? These details matter more than ever. To manage increased costs, you need to use real data to make decisions.

With FirstMile:

We use advanced technology to review your shipments in real time. Our system compares fuel surcharges, zone distances, and carrier performance across the country. We also monitor economic indicators to adjust routing based on real-world performance.

This means your shipments avoid delays and additional costs, especially during times of economic uncertainty or changes in monetary policy.

3. Take Advantage of Zone-Skipping

Zone-skipping lets you move packages in bulk to a hub closer to the final destination. This can lower your freight transport costs significantly—especially for long-distance shipping.

Why it Works:

Shipping from Utah to Georgia? FirstMile helps you skip zones by transporting your packages to Atlanta first. From there, regional delivery partners take over. This reduces fuel consumption, cuts freight rates, and keeps delivery times steady—even during busy seasons.

Zone-skipping has been a game-changer for clients dealing with cost increases from national carriers.

4. Optimize Return Costs

Many businesses lose money on returns. Why? Because they pay for return labels that customers never use.

FirstMile’s Return Solution:

With Xparcel Returns, you’re only charged when a customer actually uses a label. You can also offer a QR code option that doesn’t require the customer to print anything. This saves on paper, shipping fees, and unnecessary operational costs.

It’s a smart solution for Ecommerce companies trying to avoid higher prices without sacrificing the customer experience.

5. Avoid Billing Errors

Shipping invoices can be confusing, especially when working with multiple partners. Many companies get overbilled and don’t realize it.

The Fix:

Our Audit Queue scans every shipment and invoice for errors before you ever see it. If something’s wrong, we hold it for review. That means fewer surprises and cleaner accounting.

Accurate billing helps your sales teams, accountants, and financial planners focus on growth, not chasing credits.

6. Match Delivery Speed with Consumer Demand

Not every customer needs their package overnight. But many businesses still pay for fast shipping on every order, just to be safe. That adds up fast—especially when fuel prices, input prices, and import costs are all rising.

FirstMile’s Service Levels:

• Priority: 1–3 days
• Expedited: 2–5 days
• Ground: 3–8 days

Let us help you align transit times with consumer demand and market conditions. Most shoppers are happy to wait a few extra days if it means free or low-cost shipping.

7. Plan for USPS Changes and Global Disruptions

The global economy is facing new challenges every month. The Bureau of Labor Statistics reported shipping prices are up across all major sectors. In addition, USPS has changed how it handles light parcels, and freight demand continues to rise across the board.

On top of that, the Suez Canal and Red Sea remain unstable due to geopolitical tensions, especially with the Houthi rebels targeting commercial vessels. This has forced many shipping lines to take a longer route, which increases fuel costs and lead times across global supply chains.

What FirstMile Does:

We adapt in real time. Whether you’re shipping across the U.S. or globally, we adjust routing based on recent reports, weather, fuel markets, and policy changes. You don’t need to worry about rerouting—we’ve got it covered.

8. Simplify Everything

In times of economic stress, the last thing you need is more complexity. FirstMile gives you:

• One label for all shipments
• One daily pickup
• One invoice
• One point of contact for all support

This cuts time, cuts mistakes, and improves visibility over your shipping industry operations. It also supports better financial planning, even during periods of high inflation or declining economic growth.

Final Thoughts: Inflation Isn’t Going Away—But It Doesn’t Have to Win

Inflation may be a challenge, but it doesn’t have to control your business. Ecommerce brands and 3PLs can still succeed in this economic environment by using smarter tools and taking a proactive approach to shipping.

FirstMile helps you do exactly that—with efficient shipping, transparent pricing, and the flexibility to navigate whatever comes next.

In today’s world, success isn’t just about selling products. It’s about delivering them efficiently, reliably, and at low costs—no matter what the market demand or global economy throws your way.

If you want to:

• Save on transportation costs
• Protect your profit margins
• Improve customer experience
• Adapt to rising interest rates and inflation rates

Then it’s time to rethink your shipping strategy.

Let FirstMile be your partner in smarter, stronger, and more scalable shipping.