Online customers care about delivery times. Studies have shown that consider same-day delivery one of their top three concerns. Slow shipping speeds can cause a customer to cancel an order and seek out a site with a faster fulfillment process.
As Amazon has normalized the expectation for , your eCommerce business should consider the benefits of an overnight shipping option. Offering this desirable service comes with additional expenses and logistics. However, nearly 90% of eCommerce customers are willing to pay more for the factor that matters the most to them.
In this guide to overnight shipping, we discuss:
- Overnight shipping and its benefits for an eCommerce business
- How much does overnight shipping cost, and what factors influence your business’s logistics
- Strategies for how to cost-effectively integrate overnight shipping into your fulfillment process
Define Overnight Shipping
Overnight shipping or overnight mail is an offer that carriers can make with businesses to have their merchandise delivered to customers by the next business day. To offer this service, carriers provide cutoff times and exceptions, which vary depending on their needs.
For example, merchandise may have to be ordered before a certain time of day to guarantee an overnight delivery (for instance, “Order in the next 2 hours to receive the item by tomorrow”). Amazon uses this daily cutoff to give carriers a chance to fulfill their orders and entice hesitant customers to meet the deadline.
Weekend orders may also take longer, depending on the carrier’s needs. Though it says “overnight,” communicating that term’s limits and the real delivery date with customers is essential.
Benefits of Overnight Shipping
Adding overnight shipping to your fulfillment strategy comes with several benefits. With eCommerce sales predicted to top $500 billion by 2022, these benefits can provide an exponentially greater competitive edge.
Increased Conversions
Studies have shown that 19% of customers abandon a cart due to slow delivery times. Offering overnight shipping can accommodate these shoppers’ needs and increase conversions by preventing cart abandonment at the source.
Increase Basket Size
Since customer behavior is a factor in an eCommerce business’s profits, your buyers’ psychology can be part of your fulfillment strategy.
Overnight shipping is still a luxury in the eCommerce world. To pay for it, customer assessment studies have shown that customers will feel motivated to add more items to their cart to increase the perceived value of those overnight package costs.
This is why many sites impose a minimum purchase limit on orders viable for overnight shipping. They hope to encourage this behavior.
Upstage Your Competition
The eCommerce titans—right now, they’re Amazon, Walmart, and eBay—offer overnight shipping options. However, due to the expense and logistics involved, many businesses forgo this option—only about 50% of online retailers offer same-to-next-day delivery options. These businesses could be members of your competition.
To upstage competition in your market, offering overnight shipping despite the additional overnight delivery charges can attract customers looking for the fastest available delivery method.
Increase Customer Value
“Customer value” describes how much each customer is worth to an eCommerce business throughout their relationship. An unsatisfied customer is worth the cost of the one purchase they make (or less). However, a customer satisfied with an overnight delivery can become a long-term buyer.
For an eCommerce company competing in a crowded marketplace, establishing this credibility and consumer confidence increases conversions and the lifetime value of each customer that converts.
Overnight Shipping Timeline
To fully understand what overnight shipping looks like, consider this timeline of events leading to a successful overnight delivery:
- An order comes in before the “order within” window expires. Your fulfillment team begins downloading and packing the order to meet the courier’s overnight delivery window deadline.
- Your carrier processes your order after it is picked up at your warehouse or delivered to the post office. This entails scanning, sorting, and routing the delivery.
- The package travels to the delivery hub closest to the customer. Depending on how far away it is, air shipping may be required to meet the overnight deadline, which can increase costs and change timelines.
- After being processed at the delivery hub, the customer receives their merchandise the next business day.
This timeline is the ideal situation. To determine how much this strategy will cost to fulfill consistently, consider this breakdown of the expenses an eCommerce business must shoulder to offer overnight shipping.
Overnight Shipping Cost
Your business can calculate overnight shipping costs per carrier to get a basic idea of the total operating expenses you can expect. Subsequently, the major factors influencing overnight shipping costs can be broken down into categories (see “Cost Factors” below).
Cost by Carrier
We break down the costs and shipping procedures by the carrier to give you a better idea of which service will most benefit your fulfillment process for next-day shipping.
UPS
UPS offers three options for overnight shipping. They are called:
- UPS Next Day Air Early
- UPS Next Day Air
- UPS Next Day Air Saver
The main difference between them is the cost and expected delivery times. Air Early offers the quickest delivery (by 8 AM the next business day) but the highest prices. Air guarantees delivery by 10:30 AM. Air Saver costs the least and delivers by 3 PM.
FedEx
FedEx also offers three shipping options for overnight orders:
- FedEx First Overnight
- FedEx Priority Overnight
- FedEx Standard Overnight
First Overnight guarantees delivery between 8 AM and 2 PM for remote delivery locations. Priority Overnight offers 10:30 AM deliveries or by 5 PM for remote areas. Standard Overnight, the cheapest method, offers deliveries by 3 PM the following afternoon.
USPS
USPS offers overnight shipping as a service called Priority Mail Express. This guaranteed overnight delivery is the best option for light packages, with prices starting at $24.70 for 10:30 AM deliveries.
Which Service Should I Use?
Aside from using a calculator with the carrier directly, shipping costs can be approximated using the main factors that increase the cost of overnight shipping.
Cost Factors
Aside from using a calculator with the carrier directly, shipping costs can be approximated using the main factors that increase the cost of overnight shipping.
Box Dimensions
The size of the package being delivered directly impacts the costs of shipping it overnight. The smaller the box by dimensions (LxWxH), the cheaper the delivery.
Box Weight
This applies to the box’s weight as well. Most carriers set a package limit, above which the overnight delivery costs increase. Weigh the fully packed items for which you intend to offer overnight shipping.
Shipping Discounts
Many carriers offer shipping rates at a discount with merchants that frequently use them. Third-party fulfillment companies often have relationships with carriers that they can use to secure discounted shipping rates for their client’s businesses.
These services receive the lowest shipping rates due to the extent of their production and their ongoing relationship with the carrier.
Shipping Distance
The product’s location and the delivery hub near the end customer heavily impact the shipping cost. Carriers use shipping zones to calculate these prices, which you can also do to plan your expenses.
Shipping Time
As mentioned, overnight delivery can occur at any time during the next business day. Depending on how early it needs to be, shipping costs can go up.
How to Save on Overnight Shipping
Assuming the dimensions of the products and the shipping distance cannot be changed, here are some strategies to keep your business’s overnight mail costs to a minimum:
Warehouse Location
Proper warehousing is a key factor in optimizing the overnight shipping process. By stocking warehouses closer to customers, businesses can save shipping time and expenses.
Warehouses located away from the coast can be advantageous. They may be farther from the ports. However, the real crunch regarding deliveries is not from the port to the warehouse but from the warehouse to the customer.
ECommerce businesses can refine their entire fulfillment process by using warehouses within reach of many shipping zones at once.
Warehouse Number
Multiple warehouses can save a business time and money by bringing more orders closer to customers. Of course, using multiple warehouses means shipping the products to separate storage locations.
However, freight shipping to warehouse locations can be cheaper than shipping individual orders if enough product is moved at once. While your business could never match Amazon’s fulfillment network alone, managing multiple warehouses can still result in a cheaper fulfillment process.
Negotiation
Negotiation can help you save on overnight shipping costs in several ways. One is a simple price negotiation. You can decrease the price when choosing the carrier to manage your overnight fulfillment process.
A guarantee of overnight delivery can also be negotiated. Since your promise to deliver your customers’ products overnight depends on your carrier’s ability, this guarantee is vital to any successful overnight delivery strategy.
How to Manage an Overnight Shipping Strategy
Managing the costs and logistics of overnight shipping can strain your fulfillment process. However, the offer can resolve a customer service issue and give your customers a unique, attractive option for items they want in a hurry.
A third-party fulfillment service can use its carrier connections and knowledge of order fulfillment to find the most cost-effective shipping methods for overnight deliveries. This gives your business the freedom to offer customers better deals and increase conversions by using overnight shipping as leverage and increasing the lifetime value of the customers who convert.
FAQs
What are the benefits of overnight shipping?
Overnight shipping increases conversions by reducing cart abandonment, increases basket size as customers are motivated to add more items, helps businesses upstage competition by offering fast delivery, and enhances customer satisfaction, which boosts long-term customer value.
What is the most cost-effective shipping method?
For light packages (under 70 pounds), USPS offers the most cost-effective overnight shipping option through its Priority Mail Express service. Depending on the customer’s location, UPS and FedEx may offer more cost-efficient options for heavier packages.
What does the shipping method overnight mean?
Overnight shipping means the package will be delivered to the customer by the next business day, provided the order is placed before a specific cutoff time. Delivery times and costs can vary depending on the carrier and the location.
Who is better for overnight shipping?
USPS, UPS, and FedEx all offer reliable overnight shipping options. USPS is typically more affordable for light packages, while UPS and FedEx are better for heavier or more time-sensitive shipments.
What is the most economical way to overnight a package?
The most economical overnight shipping method depends on the package size and weight. USPS Priority Mail Express is the cheapest for light packages, while UPS and FedEx may offer better rates for heavier shipments or those that need to travel long distances.
Which is cheaper, UPS or FedEx, to send a letter overnight?
FedEx’s Standard Overnight option is often more affordable than UPS Next Day Air Saver for a standard letter. However, rates may vary depending on the exact delivery location.
Who has the cheapest overnight fees?
USPS typically offers the cheapest rates for overnight shipping of light packages through Priority Mail Express. For heavier packages, rates from UPS and FedEx may vary depending on distance and delivery speed.
Is it better to overnight with USPS or FedEx?
It depends on the package size and weight. USPS offers cheaper rates for lighter packages and letters. FedEx may be a better option for heavier packages or when earlier delivery is required.