Why Does Residential Shipping Cost More than Commercial Shipping?

Posted by Blue Bell Shipping on April 12th, 2021

Residential deliveries (or pickups) are services where a carrier delivering a shipment to a residence, including home businesses or businesses in residential areas. Unlike commercial deliveries, they are small apartments, single-family homes, etc. and when sent in trucks they take more time and will have to pay attention to road restrictions, more pedestrian traffic, etc. There might be few areas where there are restrictions for entry of vehicles to pass.

Residential shipments usually include an additional surcharge over the cost of transportation which makes it even more expensive. At times, when the recipient is not present, the courier service would have to bring back the package to the warehouse which incurs additional cost to the courier service.

In commercial shipping, the order is delivered to a business address which could be a retail store, factory, etc. Commercial shipping is less complex than residential shipping and comparatively much cheaper.  The business is located in highly dense areas where there are many deliveries. This drives the carrier cost down because there is always a person available in commercial places to receive the package. The package is delivered on the first attempt and won't have to return the package to a hub.

Online shopping has become a new trend. Consumers have started ordering online everything that they can. The rise of online shopping has also made consumers expect more on shipping. Nowadays, consumers are expecting free shipping on most of the products that are low in cost to be delivered with zero shipping cost. This has become the biggest challenge for online sellers because offering low rates can ruin the margins and ultimately profits. To earn more profits, you will have to raise the shipping cost. Most of the shipping carriers use the last–mile delivery when they need to deliver to a residential address. This is the cost of delivering the parcel over the last leg of its journey to the customer. As it directly picks the parcel from the distribution center and delivers it to the customer's preferred address. This is one of the main reasons why shipping costs can add up in last-mile delivery.

From the size of your shipment to the distance, it has to travel – several different factors affect the shipping price. Here are few factors that influence residential shipping to be more expensive than commercial shipping:

• Package dimensions is a pricing technique that affects the size and dimensions of a particular item to determine its final shipping costs.
• Package weight plays a huge role in calculating shipping costs. This is the net weight of the item, or how heavy the product is.
• Shipment speed is how fast you can deliver the parcel to the consumer. For short transit times, usually, the cost is more for shipping.
• The target destination will help to calculate the shipping cost from the item’s point of origin.
• You also need to consider custom duty and other taxes when shipping to other countries.
• Delivery surcharges are extra costs that could sometimes come with e-commerce courier shipping.

Blue Bell Shipping is the leading logistics and shipping company in UAE specializing in innovative shipping management solutions. They provide cost-effective shipping services in Dubai and ensure that customers are satisfied with their service and the goods are managed properly. Get in touch with them for a hassle-free logistic experience.