The cost of overnight shipping is considerably more expensive than standard shipping. However, it’s an excellent option to offer in your online store. That’s especially true if your customers need their order by the next day. People in a time crunch will be willing to pay extra for overnight shipping. Here’s what you need to know about overnight shipping services and why they may help your eCommerce efforts.
Red Stag Fulfillment originally published this post on Feb. 25, 2020. We updated it on November 19, 2021 to reflect pricing, overnight shipping promises, carrier capabilities, and a deeper understanding of ongoing global supply chain concerns.
When does overnight shipping arrive?
Each carrier offers different overnight shipping services, with different arrival times and pricing. There are pros and cons to each one, depending on what kind of overnight service you need. It’s good to remember that overnight shipping also can be called one-day shipping, but it is different from same-day shipping.
FedEx has three levels of overnight services. The difference between the services is the guaranteed arrival time. FedEx First Overnight, which arrives by 9:30 am in most places, is substantially more expensive than the other services. The other FedEx Priority Overnight option is slightly less expensive and offers next-business-day deliveries by 10:30 am to businesses and 4:30 pm to residences. FedEx Standard Overnight is the most affordable option and will get your package to a business by 4:30 pm or a residence by 8 pm.
Note that FedEx’s overnight shipping options focus primarily on weekdays. Say you use FedEx First Overnight or FedEx Priority Overnight. Then, your package can be picked up or delivered on a Saturday in many areas, but this comes with an additional charge. Standard Overnight packages can be picked up, not delivered, on Saturday for an additional charge. FedEx overnight shipping options don’t deliver on Sundays.
UPS also has three levels of service. Next Day Air Early arrives by 8 am. Regular Next Day Air is delivered by 10 am. UPS Next Day Air Saver is cheaper than regular overnight and aims to arrive by 3 pm. Like FedEx, UPS may deliver later in some regions or locations, such as the Early option arriving by 9:30 am to Anchorage, Alaska.
These options also focus on business days, so Saturday delivery will often come with an additional cost. Unfortunately, due to the pandemic, UPS notes that some of these times are experiencing delays. For example, the Next Day Air Saver guarantee is pushed back as far as 11:59 pm on the day of delivery.
The US Postal Service has only one overnight delivery option, USPS Priority Mail Express. It has an estimated arrival time of 10:30 am. However, the Post Office does have a flat rate shipping option for overnight envelopes and boxes. That’s a service the other carriers don’t offer. USPS also notes that this service delivers seven days a week, extending its capabilities.
The Postal Service has struggled with some delivery capabilities in recent years. However, the Priority Mail Express service still offers a money-back guarantee on delivery speed.
|FedEx First Overnight||9:30 am||$$$$|
|FedEx Priority Overnight||10:30 am or 4:30 pm||$$$|
|FedEx Standard Overnight||4:30 pm or 8pm||$$|
|UPS Next Day Air Early||8:00 am||$$$$|
|UPS Next Day Air||10:00 am||$$$|
|UPS Next Day Air Saver||3:00 pm||$$|
|USPS Priority Mail Express||10:30 am||$|
*Note: Arrival times are estimates and many are occurring later due to COVID-19 concerns,
How to offer overnight shipping
Customers like to have an overnight delivery option. However, you can only offer the option of overnight shipping to your customers if you can send orders quickly. Same-day fulfillment is a necessary order fulfillment service to enable overnight shipping. If an order goes out even a day late, you’ve lost your chance to get it there overnight.
That can seem like a challenge, but overnight and expedited shipping options don’t have to eat into your bottom line. Customers who are in a hurry are often willing to pay a premium. In addition, the high cost of overnight options can make your standard shipping charges seem like a bargain if they decide they can wait.
Overnight shipping costs
FedEx’s standard overnight service typically is its cheapest. However, that service isn’t available in all ZIP codes. For more rural deliveries, you must pay the higher price for FedEx Priority Overnight.
Overnight shipping can be costly. For example, let’s look at the cost to ship a 5-pound package from Knoxville, TN, overnight to a residence in Pittsburgh, PA. We’re using this FedEx cost calculator with a shipping date of Friday, November 19, 2021.
FedEx First Overnight with a 9:30 am delivery on Saturday would be $159.11, while the Priority Overnight with a noon delivery time on Saturday is $124.32. If we were willing to wait for delivery on the following Monday, costs would drop slightly to $141.15 for First, $106.36 for Priority, and $98.89 for Standard Overnight with a delivery time of 8 pm.
Overnight shipping can get you out of a jam. If an order goes missing or a carrier loses it, you might want to ship the replacement overnight to appease an angry customer. Taking a loss on shipping is a small price to pay to avoid a negative review that could cost you future sales.
Unless you’re shipping very high-value products, these costs are prohibitive. However, there are effective ways to get your products to your customers quickly without paying for overnight shipping.
Best ways to save on overnight shipping
Customers tend to judge every eCommerce company based on Amazon. That marketplace made waves with Prime offering two-day shipping, which has become the industry standard. Now Amazon offers one-day and even same-day delivery on certain items. To avoid being left in the dust, your eCommerce business needs to deliver orders quickly.
And don’t be fooled by current supply chain concerns. While many people may express frustration that Amazon and its Prime delivery options take more than two days, they still have that expectation. That means customers still expect it from you. So, if you need to get orders delivered overnight, you’ll need to find ways to save on overnight shipping. Here are four strategies to expedite your shipping while reducing your costs.
If you send many overnight orders, you may be able to negotiate lower rates with one or more of the major carriers. Even with negotiated rates, however, overnight shipping will still be pricey. The following two strategies are more cost-effective ways to deliver your products to your customers quickly.
Ship from multiple warehouses
Amazon can offer same-day delivery because it has many, many warehouses. The distance from an Amazon warehouse to your house is probably short, especially if you live in a large city.
Most eCommerce businesses can’t emulate the Amazon model, even if they use Fulfillment by Amazon. However, even small eCommerce businesses can take advantage of faster delivery time by storing stock in more than one warehouse.
You don’t have to tie up a lot of money in extra stock to take advantage of this strategy. Red Stag Fulfillment’s two warehouses can ship to 96% of U.S. addresses in two days or less.
There is a cost to split your inventory among multiple warehouses. You’ll have to pay freight costs to ship in bulk to each location. However, freight shipping is cheaper than shipping individual orders. Reducing travel distance for customer orders may ultimately lower costs compared to using a single warehouse.
In addition, faster delivery times are an incentive for customers to buy from you. When you consider your eCommerce fulfillment options, factor in the convenience and cost savings of shipping from multiple warehouses. Someone who decides not to spend on overnight shipping may be pleased that you can also get their order delivered within three or four days.
Ship from centrally-located warehouses
Using multiple warehouses is only helpful if those warehouses are in the right locations. Many eCommerce businesses use fulfillment centers near the port where their products reach the U.S. However, shipping from a port city to customers across the country is slow and expensive.
California doesn’t always make sense for your fulfillment needs. That may seem counterintuitive. So, here’s why you may want to choose another location.
Red Stag Fulfillment put its warehouses in Knoxville, TN, and Salt Lake City, UT. Packages from these two locations can reach a substantial portion of the U.S. without traveling through many shipping zones. This means you can ship more cheaply and more quickly. If you want to offer free shipping, having multiple warehouses in central locations is necessary.
Ask for same-day order processing guarantees
Same-day order processing is essential to overnight delivery. If your fulfillment company can’t get your orders out the door the same day they are placed, you can’t ship overnight.
Carrier delivery times are only one factor in keeping customers happy. If your orders get stuck in the warehouse, you won’t be able to meet expectations for fast delivery. Make sure the fulfillment company you choose has a same-day order processing guarantee.
This order processing timing is important. That same-day guarantee is designed to process orders according to your service-level agreement. Red Stag gives you options for this order processing guarantee.
Please note that, whether you ship with another 3PL or us, order processing and delivery are two different fulfillment elements. Order processing happens by the 3PL, while delivery is from the carrier. You need both to happen quickly to meet customer needs. Paying for overnight delivery doesn’t help much if it takes your 3PL four days to process the order.
Having same-day order processing empowers your ability to offer faster shipping. These order processing guarantees are the foundation you need to get goods delivered quickly, whether you offer overnight or standard shipping options.
Where does overnight shipping fit into your fulfillment strategy?
Overnight shipping can be a desirable add-on service to offer your customers. It can be a lifesaver when you need to resolve a customer service problem. However, most eCommerce customers don’t want to pay the extra cost of sending an order overnight.
Choose multiple warehouses in central locations. That way, you’ll be able to deliver orders to your customers in one or two days. You can offer free or cheap shipping to keep customers happy. And you’ll be able to keep your fulfillment costs under control.
With it being peak season, overnight shipping is just one way to tackle the big issues may eCommerce companies face. Click the image below to read the lessons our industry learned from the end of 2020. They’ll help you have a happy holiday in 2021 and beyond.