A complete overview: understand your shipping rates

At first glance, the pricing structure might seem straightforward - but the actual shipping cost consists of many components. Even small surcharges can lead to underbudgeting and unexpected fees if overlooked.

At Shipmondo, we work every day to make the complex simple. That’s why we’ve created this overview to help you gain full insight into your shipping costs and make the best decisions for your business.

1. Base price - Weight, volume, and destination

The weight of a shipment is not necessarily the physical weight you can measure on a scale.
Physical weight is the actual weight in kilograms or grams. But some carriers use dimensional weight, calculated based on the parcel’s dimensions and a carrier-specific dimensional factor - which varies between carriers.

For example: If the physical weight is 3.9 kg but the parcel’s size is 20 * 30 * 40 / 5000 (dimensional weight - in this case UPS), the dimensional weight is 4.8 kg. Some carriers charge only by dimensional weight, while others will use the greater of the two.

2. Surcharges that can disrupt your budget

Surcharges like fuel and energy fees, seasonal surcharges, and local charges are not always included in the quoted price. These extras can fluctuate rapidly and cause unexpected price hikes.

You may also encounter fees for pickup, drop-off, rerouting to a service point, or returning uncollected shipments. Carriers typically adjust their prices once or twice a year. If your shipping volume increases, renegotiating regularly can be beneficial - just like with insurance policies.

Tip: When you book shipments using Shipmondo’s built-in carrier agreements, prices always include fuel and energy surcharges. Create a free account and book your first parcel today.

3. Pickup or drop-off

When the carrier picks up parcels directly from your location, there may be a pickup fee depending on your area. It adds convenience to your workflow - but at a cost.

Alternatively, you can drop off parcels at a terminal or service point. This is often cheaper but requires time and planning on your part.

4. Insurance and coverage

Standard insurance coverage varies from carrier to carrier. It may be based on weight or a fixed amount per shipment. If you’re sending high-value items, consider adding extra insurance. Being underinsured can be a costly mistake.

Pay close attention to the carrier’s insurance terms. Many do not cover certain product categories under their standard policies - such as used goods, jewelry, alcohol, gemstones, securities, or sometimes even electronics. Carefully review the terms if these apply to your product catalog.

5. Why time is the biggest saving

Even if you manage to push your shipping rates down, manual workflows can quickly become your most expensive cost. The time it takes to find prices, print labels, and correct errors adds up to many work hours each day.

This is where automation makes a real difference. With Shipmondo, you get:

• Automatic label printing, saving time on every shipment
• Automated customs, so you don’t have to enter data manually
• Efficient order management, collecting all orders in one place and reducing errors
• Integrations with multiple carriers, on a single platform – no need to log into multiple systems or train staff on complex setups
• Simple return handling, so you can wrap up returns quickly
• And much more

Want to learn more about what we can do for you? Explore our full feature list.