Online shoppers coming round to idea of paying more for shipping; freight rates set to fall

Image: Monkey Business/Shutterstock

Image: Monkey Business/Shutterstock

Online shoppers are coming round to the idea of paying more for their orders to be shipped, new research suggests.

Six in 10 (61%) of 1,000 UK shoppers questioned for Sendcloud research say that high shipping costs are the main reason for them to abandon their shopping cart – but nonetheless 65% expect that shipping costs will increase this year as a result of inflation. The amount they are willing to pay varies depending on the value of their order. Shoppers say they will pay up to £4.70 for a £15 order, £5.10 for a £50 order – up from £4.30 a year earlier – or £6.80 for a £150 order.

“Consumers have long been spoiled with free shipping, despite this being a roadblock for many online retailers. When a free shipping option exists, many consumers would quickly choose this over the paid for shipping option,” said Rob van den Heuvel, CEO and co-founder at Sendcloud.

“We now see a clear shift in consumer behaviour. Consumers are quite willing to contribute to shipping costs, although the price can be a dealbreaker. Giants like H&M are therefore increasingly charging shipping costs for small orders, and our expectation is that many online retailers will follow their example.” 

Attitudes to free and sustainable shipping options

Some 70% of UK shoppers will add an extra product to their online order in order to get shipping for free, while 77% prefer free over fast delivery – contrasted with the 23% who prefer fast delivery over free. 

But 40% believe unsustainable delivery should be more expensive, and 76% say shipping should cost less if shoppers are willing to wait longer. 

The Ecommerce Delivery Compass report questioned 9,004 respondents from nine countries including the UK via Nielsen and will be published on January 26. 

Freight rates set to fall 

Elsewhere, ParcelHero says that global freight rates will continue to fall in the first half of 2023, cutting rates for shippers, retailers and ultimately consumers.

ParcelHero head of consumer research David Jinks says: “International airfreight rates are, to be blunt, all over the place. Rates between East Asia and Europe have fallen by 30-40% compared to this time last year. UK shoppers buying goods manufactured in China may ultimately profit from this as import costs fall. However, the freight analytics platform Xeneta says China-Europe airfreight rates are still up 62% on pre-pandemic levels, despite the current drop. That means, in our view, it’s too soon to expect a dramatic fall in UK store prices.

“A lot of the turbulence hitting airfreight is based around changing conditions in China. Chinese New Year factory shutdowns always flatten demand for air cargo space in the first months of the year. In addition, China’s wholesale lifting of Covid restrictions has increased international travel, thereby increasing spare capacity. Don’t forget, 45% to 50% of the world’s air cargo is usually transported in the belly of passenger aircraft. The more international passenger flights out of China, the more this should lower rates as capacity increases.

“As far as UK exporters are concerned, in terms of Europe to the US, airfreight rates are down around 14% on January 2022, which is good news. However, these rates are still up an eye-popping 70% compared to pre-pandemic 2019. Clearly, there is room for movement here as well.”

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