Webinar summary: "Parcel delivery: understanding pricing structures and avoiding pitfalls"

This summary contains key information from our webinar on 27 March 2025, dedicated to small parcel transport and hosted by Benjamin Mazingue-Desailly. With a Master's degree in Finance, Benjamin has been working in the transport sector for over 20 years, focusing on a results-oriented operational approach. Here, he provides concrete insights into understanding your service providers' pricing structures and concepts such as volumetric weight rules, fuel indexation and surcharges. >> To view the recording of the webinar (duration: 30 minutes), click here.

Transport: a challenge for every business

As the final stage in your sales process, transport is a key link in operational efficiency, both with your suppliers and customers and internally within your business. It has an impact on:

• profitability
• customer satisfaction
• internal logistics and coordination.

Today we are going to focus on small parcels weighing less than 30 kg. Mainly transported by road but also by air (particularly outside Europe), delivery can be:

• Without guaranteed delivery time (DPD, GLS, Colissimo)
• With guaranteed delivery time (UPS, FEDEX, DHL)
• To a pick-up point (Mondial Relay).

Breakdown of transport costs

These are based on three pillars:

1. transport, with a price list by destination and weight bracket and a rate adapted to irregular flows according to weight and destination
2. fuel indexation, following the 2006 law to protect carriers against fluctuations at the pump. Its calculation is defined when the contract is signed and must be mentioned at the bottom of the invoice. It is generally reviewed monthly for small parcels but can also be quarterly.
3. Various surcharges: for areas that are difficult to access or in residential areas, guaranteed delivery times or weekend deliveries, during busy periods (September to January).

Transport with or without guaranteed delivery time

Transport without guaranteed delivery time (delivery mainly in Europe):

• Maximum weight per parcel: 30 kg
• No volumetric weight rule (VWR)
• The volume of the parcel may be limited

Transportation with guaranteed delivery time (international delivery specialists):

• Maximum weight per parcel: 70 kg
• Application of volumetric weight rule (VWR)
• Weight and size limits

Please note: excess charges may make the cost prohibitive in this category.

Understanding the volumetric weight rule

This "theoretical" weight is based on the volume of the parcel: it reflects the space it will occupy in the delivery vehicle. The carrier will use the higher of the volumetric weight and the actual weight of your parcel.Let's imagine two parcels with a similar actual weight: if one contains lead, it will be charged at its actual weight. But if it contains feathers, the volumetric weight will be taken into account.Hence the need to optimise your packaging!

The taxable weight rule for small parcels:

There is no universal rule, but the common rule is that 1 m³ = 200 kg.The volumetric weight of a parcel is calculated using the following formula: Length x Height x Width (in cm) ÷ 5000.Why divide by 5000? Because it is a simpler conversion for calculating volumetric weight.Example with two parcels of similar weight but different dimensions:

• PACKAGE 1:

Actual weight: 3 kgDimensions: length = 40 cm, width = 30 cm, height = 25 cmVolumetric weight: (40 x 30 x 25) ÷ 5,000 = 6 kg👉 Billing will be based on the volumetric weight = 6 kg

• PACKAGE 2:

Actual weight: 3 kgDimensions: length = 32 cm, width = 25 cm, height = 15 cmVolumetric weight: (32 x 25 x 15) ÷ 5,000 = 2.4 kg👉 Billing will be based on the actual weight = 3 kgIf we add the regulatory fuel indexation and surcharges: Actual weight 3 kgParcel 1Parcel 2Dimensions40 x 30 x 2530 x 25 x 15Volumetric weight6 kg2.4 kgTaxable Weight6 kg3 kgStandard delivery€28.62€23.87Signature required€1.35€1.35Delivery to residential area€5€5Saturday delivery€40€40Fuel surcharge applicable(28.62 + 5 + 40) x 20.25% = €14.90(23.87 + 5 + 40) x 20.25% = €13.90TOTAL€89.87€84.16Difference+ 7% For parcels per day (200/month) = additional cost of £14,000/year💡 Tips:

• Optimise your parcel volume: empty space is expensive
• Define a shipping policy: delivery times, insurance, etc.
• Adapt to your business and your needs

Закључно

Whether you have a B2B, B2C or both approach, the good news is that everything can be optimised!You can reduce your costs and improve your deliveries thanks to:

• A good understanding of the market
• The right levers
• Tailored support

Take action with the experts at ERA Group!