Parcel shipping

When an ecommerce company needs to deliver smaller, individually boxed items, parcel shipping is an economical strategy. While parcels can vary in size, the term is most commonly used for packages that weigh 150 lbs. or less and are shipped to a single customer or recipient. Learn more about how parcel shipping works and how direct-to-consumer brands can use it.

What is parcel shipping and delivery?

Parcel shipping, also referred to as parcel delivery, involves transporting individual packages under 150 lbs. Most large shipping companies, such as UPS, USPS, FedEx, and DHL, have a parcel category that requires the package to be a certain weight or dimension to qualify for parcel shipping rates. Parcel shipping is a very common choice for small businesses and direct-to-consumer enterprises, as most individually sold items are sent through parcel shipments.

Parcel shipments tend to offer easy tracking to residential addresses. Unlike freight shipments, parcel deliveries are not palletized. Parcels can be shipped locally, domestically, or internationally, and they are typically light and suitable for being handled by postal carriers.

Every second, the four largest shipping companies in the United States deliver 700 parcels. The volume of parcel shipping is expected to reach 40 billion pieces annually by 2027.


What is a parcel versus a package?

A package can refer to anything that's packed, including boxes and items of any size. A parcel, on the other hand, is a package that fits the specific shipping company guidelines to be eligible for parcel shipment treatment and rates. Packages could be shipped with freight shipping or less-than-truckload (LTL) shipping when they are too large to be handled via parcel shipping. Business-to-business (B2B) shipments, sometimes called wholesale shipments, are more commonly sent by freight carriers.

In general, parcels are 108 inches or less in length and less than 165 inches in length and width combined. Larger or heavier packages are typically sent by LTL shipping or by freight, even if they contain a single item destined for a residential address. For example, a furniture retailer may use LTL delivery. 

Freight shipping is generally more cost-effective for shipping large quantities of items to a single recipient. Parcel shipping is typically the better choice for sending individual items to a large number of customers and other recipients.


How does parcel shipping work?

The parcel delivery process begins for most customer-facing businesses when the consumer places an order. From there, the business or their 3PL will ensure the parcel is ready to go out with the carrier service they have chosen.[4]

Parcel preparation

When the order comes in, the fulfillment center will pick and pack the order. Preparing a package for shipment is a key part of the parcel delivery process because each business will have proper standards for securing the items using dunnage and packaging instructions. In addition, having organized merchandise and a team that can pick and pack items quickly and easily is important; this cuts down significantly on mispicks and customer complaints.

Parcel collection

The fulfillment center will add a shipping label to the package and hand it over to the shipping carrier. Businesses most commonly select a vendor for parcel shipping that provides an advantageous combination of shipping rates and speedy delivery.

Transportation to distribution hubs

The shipping carrier will take the package to the local courier depot for further sorting. The parcel will travel through various hubs until it arrives at the final depot that is closest to its destination for last-mile delivery.

Last-mile delivery

The parcel will be placed on a delivery route designed to maximize the ease of delivery while cutting down on wasted mileage and energy.


What are the benefits of parcel shipping?

Parcel shipping is a fast and affordable shipping method for ecommerce fulfillment.

Designed for small individual packages

The eligibility requirements for parcel delivery are easily met by most direct-to-consumer products.

Speedy delivery

Parcel shipping is designed to deliver packages quickly while maximizing efficiency—a key requirement for ecommerce retailers that need to satisfy customers’ delivery expectations without breaking the bank with shipping fees.

Direct residential delivery

Palletized or freight shipments require bulk shipments to another business. Parcel delivery, on the other hand, makes ecommerce run with individualized deliveries.

Ease of tracking

Customers and vendors can easily track the package throughout the parcel shipping process through track and trace. Packages are scanned along each step of the journey, providing greater certainty and satisfaction.

Cost savings

In some cases, parcel shipping can be a more economical alternative to freight shipping or LTL shipping. Specific types of parcel shipping, like flat-rate shipping and ground shipping, can be more economical for products of a certain size and weight.


How to save on parcel shipping

There are multiple ways that companies can help to cut their parcel shipping costs. For example, businesses should use the most efficient packaging possible to reduce the parcel’s dimensional weight and achieve lower billable rates.

Some vendors may offer flat-rate shipping options that cut costs for many parcels. If you outsource your fulfillment operations, you’ll also benefit from the 3PL’s negotiated carrier rates.

What is the cheapest way to send a parcel?

In general, you can always save by packaging more efficiently and in smaller boxes and envelopes that still provide sufficient room for your goods. Compare prices across carriers and shipping methods to make sure that you are getting the best deal.

Slower shipping options are usually less expensive than express options; you may be able to offer customers free or reduced-price shipping with these choices. The right carrier may vary depending on the size of your packages; while USPS will typically offer better rates for First Class Mail, Priority Mail, and Media Mail, parcels over 5 lbs. often receive better rates from UPS.




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Finding the right shipping carrier and setting up an efficient parcel shipping system can be a tedious and overwhelming process for an ecommerce business. We can help to simplify parcel delivery and all of your logistics. Contact Airhouse to speak with one of our fulfillment experts and learn more about how we can help you to get better parcel shipment rates and a better customer experience.

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