UK postal service fees to rise in 2024, hitting SMEs hardest

In 2024, postal and courier pick-up and delivery service charges in the UK have seen significant increases, driven by changes from key providers.

This month, USP will introduce a 10 per cent increase in charges for large parcels and additional handling fees. Parcelforce has also increased its rates, citing rising fuel costs and labour market volatility as primary reasons. These changes are impacting businesses that rely heavily on affordable shipping options.

Steve Zammit, CEO of Interparcel, highlighted the importance of efficient packing and shipping strategies for small and medium-sized enterprises (SMEs). "Mistakes that lead to surcharges can significantly increase the original shipping price by up to 150 per cent," Zammit noted. "A courier charge might initially be £10, but something done during the manufacturing process could add a surcharge for special or manual handling ranging from £12 to £70, depending on the weight and any special handling requirements."

Zammit identified several costly packing mistakes that businesses should avoid to mitigate the impact of these increased charges. Among these, he emphasised the importance of adhering to dimensional and weight limits set by couriers. "Many products sourced overseas, from countries like China, Vietnam, Taiwan, or Hong Kong, need to be packaged correctly upon manufacture to avoid repackaging later," he said. "Couriers often have weight limits, such as 20-22 kilograms per parcel. For items over 32 kilograms, it typically includes palletisation and forklift handling, which adds further complications and costs."

The need to ask specific questions about product dimensions and weight during the ordering process was also highlighted. "When placing overseas orders, it's important to ask questions upfront about the dimensions and weight of the products. Some couriers impose surcharges for items over certain lengths—105 centimetres is often the maximum before surcharges apply, though this varies by courier. In some cases, the product can be unscrewed or packed more compactly to avoid these surcharges," he explained.

Zammit further stressed the necessity of conducting packaging research during the sourcing phase. "The most common mistake SMEs make, especially if they are not manufacturing the product themselves, is failing to conduct thorough research in the sourcing phase," he said. He advised striking a balance between adequate packaging for customer satisfaction and keeping shipping costs under control.

Several additional packing mistakes were identified, including neglecting to handle packaging and product tagging at the manufacturing stage. "Do as much of the packaging and tagging at the manufacturing stage rather than leaving it until the shipping process, which can become labour-intensive once the products arrive," Zammit suggested. He highlighted the importance of understanding the market to design packages that align with customer expectations while controlling costs.

Another significant issue involves packing items that require special handling. Zammit cautioned, "If one of the dimensions—length, width, or height—falls outside the automation limits of some courier companies, the item may need to be handled manually. In some cases, an item that's too thin or too light, like one under 250 grams, might not be suitable for automated handling and will incur a manual handling surcharge."

Improper weight distribution within parcels can also lead to additional fees. "Uneven weight distribution may result in the parcel being manually handled and incurring a surcharge. For unusually shaped items, it's often best to have a custom box made. Although this might cost more initially, it ensures the item is packaged correctly, reducing the likelihood of surcharges, damage, or returns," Zammit advised.

Zammit additionally discussed the impact of volumetric weight on shipping costs. "One key factor is the difference between actual weight and volumetric weight. If you're not using a flat-rate package, couriers will charge you based on the higher of two figures. For example, a one-kilogram item in a large box may have a volumetric weight of five kilograms, and you'll be charged based on that higher figure," he explained.

Finally, Zammit highlighted the necessity of reassessing packing and shipping processes during key business changes. "It's always wise to reassess what you're doing with packaging and shipping costs at key times of the year. For example, if you're adding new product lines to your eCommerce store, consider how that impacts your shipping. If customers buy multiple items, the shipping characteristics can change," he noted.