Those who run online shops or frequently send gifts are likely concerned about shipping fees from delivery companies.
Which of the major Japanese carriers, such as Japan Post, Sagawa Express, or Yamato Transport, is the cheapest?
How much cheaper do shipping fees become if you sign a contract with a delivery company?
In this article, we would like to introduce the market rates based on our company’s experience contracting with various businesses.
Please note that specific company names and exact figures are withheld in this blog, so we hope you will understand this simply as how the system works.
For Individual Parcel Delivery, the Top Three Major Companies Offer the Lowest Rates
Among delivery companies in Japan, Yamato Transport, Sagawa Express, and Japan Post are the big three, ordered by shipment volume.
With Yamato Transport handling just over 40%, Sagawa Express just under 30%, and Japan Post slightly over 20%, approximately 95% of all parcel deliveries in Japan are handled by these three companies.
Therefore, when comparing rates for individual parcels, one of these three companies will almost certainly offer the lowest price.
Which of the Three Companies is the Cheapest?
When comparing prices among the three companies, Japan Post’s Yu-Pack will probably give you the lowest rates.
However, to be honest, there is not a huge difference, so for small lots, there is no problem using any delivery company.
In fact, our company has contracts with all three companies, and we regularly receive shipping fee estimates, but the details are mostly the same across the board.
Regarding quality, while there are slight variations in strengths and weaknesses such as delivery speed and damage rates, the services are of almost the same quality.
Track Record and Relationships are the Keys to Lowering Shipping Fees
Under these circumstances, getting a discount on shipping fees is actually very simple.
While obtaining competitive quotes from these three companies is one way to get a slight discount, the most effective factor is nothing other than your track record of how many packages you ship per year.
For example, if someone ships only 10 packages a month, no matter how much they negotiate shipping rates, they will likely only be able to secure a discount of a few yen per package.
As a rough estimate, the relationship between volume and price (for all sizes, based on the national average) is as follows.
Based on our experience, the threshold for a significant reduction in shipping fees is whether or not you exceed 50,000 packages per year.
For reference, the lowest rate per package our company received in past contracts was 325 yen.
We have heard stories of companies that managed to secure a contract for 280 yen.
However, in recent years, it seems that almost no company provides an estimate below 350 yen.
Therefore, a standard shipping fee of around 800 yen dropping to about 350 yen with a cheap company contract is considered the absolute limit for shipping rates!
Use a Fulfillment Company if You Want Lower Shipping Fees Even for a Single Package
Exceeding an annual shipping volume of 50,000 packages is actually quite a high hurdle.
Therefore, the method we recommend for reducing shipping fees is to use a fulfillment company.
Since fulfillment companies manage products from various businesses together, they hold shipping contracts based on volumes of over 50,000 packages in most cases.
As a result, you can ship your products using rates based on a 50,000-package volume, even for a single shipment.
If you were to ship products yourself, you would incur an 800 yen shipping fee, plus the costs for creating shipping labels and delivery slips, cardboard boxes, cushioning materials, and labor.
With a fulfillment company, the logic is that it will be considerably cheaper than doing it yourself, as it only costs a heavily discounted shipping fee plus a handling fee of about 100 yen.
In fact, the fulfillment service provided by our company starts from 500 yen per shipment, including all expenses such as shipping fees.
In conclusion, if your volume is under 10,000 packages per year, it is highly likely that using a forwarding fulfillment company will be more cost-effective.
Palette Shipping and Chartered Shipping Options
If you have a certain volume of goods, and your main focus is business-to-business rather than business-to-consumer, there are options different from individual parcel delivery.
These methods include using a consolidated truck service where rates are based on pallets or weight rather than the number of packages, and chartering a single truck exclusively for your transport.
Palette Shipping
Palette shipping is handled by mid-sized transport companies rather than the three major companies.
Although pricing is generally calculated per kilogram, there are also flat rates per pallet.
A single pallet costs around 8,000 yen, so if you are loading 20 or more small boxes onto a pallet, this method will likely offer better cost performance.
Chartered Shipping
Chartered shipping is supported by a large number of small and medium-sized transport companies.
You can choose the vehicle size according to the volume, such as an Akabou truck for up to 350 kg, or a 1-ton, 2-ton, or 4-ton truck. It is possible to charter a vehicle and driver starting from a few thousand yen.
The cost depends on the distance, but even for long distances, it usually stays under 100,000 yen, making it the most cost-effective shipping method!