The Complete Guide to Small Parcel Shipping

Have you started a business but are struggling to keep shipping costs low?

Depending on the shipping carrier you choose, the cost of small parcel shipping can make or break your small business.

Luckily, partnering with a 3PL like ShipBob takes the guesswork out of small parcel shipping. 

With ShipBob, you’re given access to a variety of carrier options, plus the tools you need to optimize your shipping strategy.

In this article, you will learn how small parcel shipping works, its benefits, and how ShipBob can help you automate the shipping process.

What is small parcel shipping and how does it work?

Small parcel shipping refers to sending an individual small package through a shipping carrier.

Generally speaking, any handheld package less than 70 pounds is considered a small parcel. 

From a consumer’s standpoint, think about a time you’ve ordered a package from an online retailer and had it delivered right to you — maybe it was a loaf of banana bread, maybe it was the brand new PlayStation 5 (if so, we’re jealous). If you could pick it up without making an appointment with your chiropractor afterwards, it was a small parcel shipment!

With small parcel shipping, you pack finished goods together in a box, envelope, or poly mailer, then hand it off to the shipping carrier of your choice. From there, the carrier transports it through its networks and takes care of the last-mile delivery for you.

Depending on the kind of package you’re sending, you’ll likely get better rates with certain carriers over others. 

For instance, USPS offers the best rates for smaller, lightweight packages under 1 lb., while UPS now offers competitive rates for ground shipping, and FedEx is typically the most expensive out of all three options (in part because they specialize in business deliveries and niche shipments, such as sending frozen food packages).

How are small parcel and freight shipping different?

Small parcel refers to sending individual packages under 70 lbs., whereas freight shipping is used for shipping multiple or oversized packages on pallets or large containers. 

Unless it’s an B2B shipment, your customers probably aren’t ordering hundreds of the same package to the same exact address. Since customers are located all over the place, you’ll be sending individual packages to a variety of different destinations via small parcel shipping most of the time.

You really only need to consider freight shipping if you’re sending tons of packages on pallets, or if you’re in the business of sending oversized items, like furniture.

Generally speaking, any shipment larger than 30” x 30” x 30” or that weighs over 150 lbs. is considered freight and shipments falling below these dimensions are usually cheaper to ship through small parcel services.

Why are companies using small parcel shipping?

Ecommerce businesses rely on small parcel shipping for a variety of reasons.

Here are three of the biggest benefits.

1. It’s easier to track

When you’re sending tons of small parcels all over the country (or the world), you may assume that keeping track of them would be like trying to keep tabs on a ton of marbles rolling down a hill. But it’s actually the opposite — especially with the right technology. 

Most shipping softwares designed for ecommerce use shipping APIs to connect with leading carriers to make it easy to track hundreds of small parcel shipments.

For instance, ShipBob ships small parcel packages for over 5,000 brands, and makes it easy for merchants to track orders from the ShipBob dashboard.

In addition to sending confirmation emails to your customers as soon as their orders ship, ShipBob also allows you to filter orders by tracking status, search for specific orders, and edit shipping details when customers accidentally make typos when entering their addresses (trust us, this happens a lot!).

Better tracking for your small parcel shipments leads to fewer undeliverable or lost shipments, fewer errors, and fewer returns, all of which ultimately combine to reduce shipping costs.

“ShipBob’s advanced software helps us quickly understand shipping costs and how to improve shipping times and costs by being closer to where our customers are.”

Andrea Lisbona, Founder & CEO of Touchland

2. It’s cheaper than freight shipping

Small parcel shipping is often cheaper than freight, since packages are shipped in poly mailers or other types of lightweight packaging.

For high-volume orders, you can make shipping even more affordable by partnering with a 3PL company, and taking advantage of their capacity to secure bulk discounts (e.g., USPS’s commercial pricing) for small parcel shipments. 

ShipBob is one example of a 3PL provider that has entered into “economies of scale” agreements with leading carriers.

Since ShipBob injects such a high number of small parcels into carriers’ networks, their customers get to take advantage of specially-discounted rates that they would not have access to otherwise.

“Working with ShipBob has been great. Being able to take advantage of USPS’s Media Mail shipping rates through ShipBob has helped out a ton.”

Lee Nania, Founder of SubSubmarine

3. It’s better for the environment

As the ecommerce industry continues to grow globally, eco-friendly shipping and zero-waste shipping are becoming more important to consumers as time goes on — and thank goodness. After all, there are roughly 165 billion packages shipped every year in the US, and the cardboard for these packages amounts to 1 billion trees!

Luckily, 3PLs are building strategies to help brands implement carbon-neutral shipping solutions throughout their networks and across hundreds of small parcel shipments.

For instance, ShipBob offers an integration and partnership with Pachama to give merchants the option to make their ecommerce fulfillment operations as eco-friendly as possible.

But for small parcel shipments to stay eco-friendly (and cost-effective!), there are some things your brand should consider.

First, while you always have the option to use eco-friendly packaging to reduce waste, the most important thing to be cautious of is dimensional weight (DIM).

DIM is a pricing technique used by carriers that calculates the amount of space a package takes up. 

Sometimes, a lighter package can actually take up more room than a heavier one based on the DIM weight, which is computed by multiplying length x width x height, and dividing that number by a DIM divisor set by each carrier.

The more you minimize the amount of packaging used, the more money you’ll save while simultaneously reducing your carbon footprint.

“Our business is built on sustainability and we aim to provide our customers with carbon-neutral products from our natural sources to their front door. That is why we work with ShipBob to offset carbon emissions from our ecommerce supply chain.

Minimize upfront investment and maximize positive impact on the planet by utilizing the simplest way to incorporate sustainability into your brand’s operations, carbon offsetting.”

Fannar Jonsson, Quality and Environment Manager at Blue Lagoon Skincare

What are the best small parcel shipping carriers?

The three major carriers in the US are USPS, UPS, and FedEx

While the three primary US carriers handle small parcel shipments for domestic shipments in the US, they each specialize in different areas of the industry and offer different levels of pricing to their customers. 

No single carrier is better than the others, per se; rather, it all depends on what your business needs.

Regional parcel carriers are also viable options for small parcel shipping. If your customers are mostly clustered in one region of the country, regional carriers can offer competitive rates and delivery times that are quicker than larger carriers could provide. 

Since regional carriers solely focus on serving one specific area rather than on a nationwide network, some regional carriers even offer same-day delivery.

To give you an example of the different carrier options available, we’ve listed five different carriers below (all partners of ShipBob) and their small parcel shipments options. 

 

Carrier Pricing Shipping Options
USPS $4+
  • Full tracking
  • Overnight delivery
  • Ground service
  • Limited insurance for Priority Mail packages
  • Cheapest for lightweight shipments under 1 lb. 
  • Also offers flat-rate shipping.
UPS $7+
  • Full tracking
  • Overnight delivery
  • 2-day delivery
  • All services come with carrier liability 
  • Fastest ground service of all the carriers
FedEx $16+
  • Full tracking
  • Overnight delivery
  • 2-day delivery
  • Ground service
  • Business deliveries and niche shipments (e.g. frozen food)
CDL Last Mile Solutions $15+
  • Full tracking
  • Overnight delivery
  • Same-day delivery
  • Late-night delivery
  • Services the Northeast and Mid-Atlantic regions of the US
OnTrac $15+
  • Full tracking
  • Overnight delivery
  • 2-day delivery
  • Late-night delivery
  • Services Western region of the US
Lone Star Overnight (LSO) $10+
  • Full tracking
  • Overnight delivery
  • Ground shipping for the Texas region.
United Delivery Service (UDS) $10+
  • Full tracking
  • Next-day and same day delivery for the Midwest region.

How ShipBob helps you with small parcel shipping

“We need to deliver quickly and inexpensively. Since switching to ShipBob from our previous 3PL, our fulfillment cost on comparable orders went down by 25%.”

Michael Peters, VP of E-Commerce Operations at TB12

As simple as small parcel shipping is, the process itself can get complicated.

There are so many carriers out there, offering different areas of expertise. If you’re trying to find the best options for your small business, it’s easy to feel overwhelmed and confused.

That’s where ShipBob comes in.

By trusting ShipBob with your logistics needs — including warehousing, order fulfillment, and shipping — you take the guesswork out of finding your best shipping options, and give experts the power to help you save money and time. 

ShipBob’s best-in-class technology does the legwork for you by “rate shopping” in real time between the regional and major carriers (domestic and international) that ShipBob partners with. In addition, ShipBob negotiates discounted bulk shipping rates that you can pass on to your customers.

The best part? ShipBob also offers a 2-Day Express Shipping Program, which enables 2-day shipping for all of your customers in the continental US. 

Whether you store inventory in one fulfillment center location or several, opting into ShipBob’s Express Program allows you to ship to all zip codes within the continental US in 2 days, which delights customers and often increases conversion rates and AOV.

“ShipBob’s 2-Day Express Shipping increased our AOV by 97% — from $75 to $148. And we were able to scale our business from $300,000 in sales per year to over $1.1M.”

Ryan Casas, COO of iloveplum

With ShipBob on board to handle your small parcel shipping, you can finally focus on doing what you do best: growing your business.  

Small parcel FAQs

Here are the most frequently asked questions about small parcel shipping.

What is small parcel shipping?

Small parcel shipping refers to individual packages weighing less than 70 pounds that shippers send through regular carriers. It’s often a more affordable option, since items are shipped in lightweight packaging and via ground.

How big is a small parcel?

While small parcels vary in size, we generally define them as any handheld package weighing less than 70 pounds, and any package with dimensions less than 30″ x 30″ x 30”. This said, different shipping carriers have different size limits for the parcels they accept into their networks. For instance, the maximum dimensions for shipping with USPS are smaller than what UPS and Fedex allow for.

How much does it costs to post a small parcel?

The cost to ship a small parcel can range anywhere from $4 to well over $100, depending on how much your package weighs, the distance it needs to travel, and how soon you need the package to arrive. For instance, it will be cheaper to ship a small parcel if it’s on the lighter side, and if you don’t need it to arrive right away.