What is Overnight Shipping? Everything You Need to Know

It’s no surprise that online shopping has become the most convenient and preferred buying method for consumers across the globe. 

With this increased popularity, eCommerce merchants also need to satisfy the changing customer needs. Consumers want absolute transparency when it comes to shipping.

In fact, a consumer report suggests that 53% of shoppers wouldn’t purchase a product if they don’t have clarity on the delivery date. 

In this age of instant gratification, one week seems too long for shoppers to get their products in hand. Especially after Amazon standardised the free two-day delivery trend by introducing the Prime subscription. 

In addition, overnight delivery is another shipping trend that is fast becoming an industry standard. While eCommerce giants can easily manage consumer expectations with next-day deliveries, it’s definitely not a cakewalk for small e-stores to offer such services. 

So let’s understand the ins and outs of overnight shipping and how you can offer it to your customers without spending a fortune on delivery costs. 

What is Overnight Shipping?

Overnight shipping refers to delivering the package to the customer on the next business day. Some other references for overnight delivery include one-day, next-day, or next-morning shipping.

It’s the second-fastest form of shipping after same-day delivery. 

Thus, overnight shipping is an ideal way to satisfy the requirements of customers that want products on an urgent basis. 

Types of Overnight Shipping

Most of the major carriers offer multiple overnight shipping options to their customers with different delivery times and shipping charges. 

However, overnight shipping can be divided into two main categories.

Priority Overnight Shipping

Yes, there are carriers that offer priority next-day shipping services. They provide these shipping choices for time-sensitive deliveries.  

Here, shipping companies differentiate their service by delivering the parcel to your customer’s doorstep in the morning time slots. 

Let’s take a look at some of the priority next-day delivery options in Australia.

FedEx offers you three priority overnight shipping choices — next-day delivery by 9:00 am, 10:00 am, and 12:00 noon.

Similarly, your local PACK & SEND Service Centre offers options to get your packages delivered before 9:00 am, 10:00 am, and 12:00 pm as a priority overnight shipping service. 

Whereas DHL offers 9:00 am and 12:00 pm next-day priority delivery options within Australia and internationally.

Thus, you can choose from multiple next-morning time slots to deliver your customers orders. 

Standard Overnight Shipping

The standard overnight delivery is a simple next-day delivery where shipping companies deliver products anytime before the end of the next business day. 

This option is more suitable for the customers who have a little less urgency and are okay to receive their product before the next-day ends. 

Advantages of Overnight Shipping

The number of online shoppers is increasing constantly worldwide. In fact, according to a consumer survey, 73% of the respondents said that they've been shopping more online since the outbreak of Covid-19.  

With such developments in the eCommerce landscape, overnight shipping can offer a multitude of benefits for your business.

Higher Customer Retention

Delivery is a critical factor for 84% of online shoppers, a survey suggests. Hence, getting your shipping processes right is inevitable for the long-term success of your e-store.   

Also, note that 24% of the customers were reported saying that they cancelled their orders due to slow delivery times. You can retain these consumers by offering expedited shipping.

Enhanced Customer Experience

According to the Oracle Retail report, 92% of consumers expect free one-day delivery from retailers. So if you satisfy your customers’ needs with overnight shipping it’ll enhance their buying experience. 

Furthermore, happy customers are likely to buy again from your site and may convert into loyal customers in the long run.  

Increased Efficiency

With overnight shipping, your order processing time — duration between customers placing the orders and they receive the products — decreases. 

This is because the next-day deliveries require you to fit all the order fulfilment tasks like picking, packing, and shipping in a limited time. It creates a sense of urgency among the warehouse workers and they work more efficiently to fulfil these urgent orders along with other regular shipments.

Thus, your overall operational efficiency increases.

Moreover, your inventory turnover also accelerates due to expedited shipping. It’s an ideal way to optimise warehousing costs. 

Acts as a Marketing Strategy

Not all eCommerce stores provide overnight shipping. So if you provide the next-day delivery service, you automatically get an edge over your competitors. 

Furthermore, you can promote it across your marketing channels to attract more customers. When you offer such options, shoppers would love to receive their ordered products earlier than standard delivery times. 

Disadvantages of Overnight Shipping

Although the benefits of overnight shipping easily make up for its limitations, you should be aware of the downsides to it. 

Here’s a couple of them.

Lack of Flexibility

Since overnight shipping requires you to wrap up all the stages of the order fulfilment process in a constrained time frame, it leaves you with little room to accommodate any last-minute rerouting or other delivery-related requests from customers. 

Some customers may perceive such incidents as poor customer support.   

Expensive for Customers

If you’re handling logistics in-house, you have to get the shipping company to transport your packages by air so that they reach their destination by the next day. Hence, the carriers charge you much more than standard shipping rates. This cost is eventually passed on to your customers. 

Thus offering overnight shipping can be an expensive service unless you’ve partnered with third-party logistics (3PL) providers. They can help you reduce your next-day delivery costs by storing your goods strategically at multiple warehouse locations in different regions.

How Does Overnight Shipping Work?

Here’s a sequence of events that take place while executing a next-day delivery.

• Customer places an order: Let’s say a customer purchases products from your site before the cut-off time during the day. It usually takes a night and a few hours of the next day before your customer receives the product. 

• Order is processed: Your warehousing team collects the items from the store shelves and packages them. Then it’s passed on to the shipping department immediately. The shipping department sorts the urgent shipments and makes them ready for pick-up. The carrier picks shipments and transports them by ground or air as required. 

• Parcel reaches the local hub: The order reaches the local or the nearest distribution hub during the night or next early morning. Then the delivery team sorts the packages according to the areas. 

• The customer receives the order: The staff delivers the order to your customer’s doorstep before the end of the day. Most carriers usually deliver products before 7:00 pm on the next business day. 

Some courier companies also offer guaranteed overnight shipping. In such cases, if they can’t deliver products as promised, they refund the shipping charges. 

How to Provide Overnight Shipping?

There’s no denying that customers love the expedited shipping options. However, you need adequate resources for providing overnight deliveries. 

Ideally, you should also plan for the same-day delivery so that even if takes longer than expected, customers have their orders in hand by the next day. But as discussed earlier, expedited deliveries come at a cost. 

While you want to delight your customers with faster shipping, you also can’t afford to let such services shrink your profit margins. 

That’s where the 3PL order fulfilment services can help. With their state-of-the-art infrastructure and logistical network, they allow you to offer overnight shipping services at affordable costs.

Moreover, they also take care of your entire order fulfilment cycle — warehousing, picking-packing, shipping, and even reverse logistics — so that you can focus more on growing your business. 

Calculating Overnight Shipping Costs

There are very few flat rate options available when it comes to next-day delivery. Most carriers calculate the overnight shipping costs on the basis of:

• Weight of the package: Some shipping companies charge according to the total weight of the shipment.
  
  
• Dimensions of the shipment: The majority of carriers base their shipping costs on the dimensions of the package. It’s called volumetric weight or dimensional weight.

• Shipping distance: The shipping distance is a major influence on the overnight delivery charges. The closer the destination, the lesser you’d pay for shipping.

• Type of service: Carriers also offer premium overnight shipping services where your customers can receive their orders the next day morning, unlike standard overnight shipping where products are delivered any time before the day ends. So premium services can cost you more. 

• Shipping volume/frequency: If you’re a frequent or high-volume shipper, carriers may offer you discounted shipping rates (also known as business rates). In such a scenario, your overnight shipping costs can be a little lower.

Here’s an illustration. 

For instance, you want to ship a package containing metal art from Sydney to Melbourne. The package weighs 5 kgs and its dimensions are 15”(H) x 8”(L) x 8”(W). 

Now let’s check the overnight delivery charges by entering the above credentials into PACK & SEND’s shipping cost calculator.

Best Ways to Reduce Overnight Shipping Costs

Since Amazon started the free two-day and overnight shipping for its Prime users, customers have started taking it as a standard service within the eCommerce industry. Thus, faster deliveries have become an essential offering for e-stores.

Moreover, if your competitors are offering overnight delivery, it hardly leaves you with any choice. In such cases, you’d have to offer expedited shipping. 

So let’s look at the ways you can offer these services at low costs. 

Enable Shipping from Multiple Warehouses

Amazon is able to offer same-day and overnight delivery because they store their inventory in multiple locations across the cities, states, and countries. 

It’s understandable that you can’t replicate the Amazon distribution model, but you can still benefit from stocking up your goods at various warehouses instead of one. 

Let’s say, your storage facility is located in Adelaide but your customers are spread across Australia. 

Besides your local warehouse, you can store your inventory in 3PL warehouses in different regions so that your orders can be fulfilled from a storage location that’s near to customers. 

This way, your orders will be delivered faster and your overall shipping costs will be lower. And the volume of orders can make up for the 3PL warehousing costs.  

Negotiate Rates

Another way to bring down your overnight shipping costs is to negotiate the rates with your carrier. However, this is possible only if you’re shipping with them frequently. Alternatively, you can check for the corporate or business rates. 

Locate Warehouses at Central Locations

When you choose your warehousing locations in multiple regions, ensure that the facility is located in or near the most populated regions. 

For example, one strategy may be to use five warehousing locations across the Sydney, Brisbane, Melbourne, Adelaide & Perth. 

Another option is to use dozens of Micro-fulfilment facilities, not only in major capital cities but also in regional and remote cities that traditionally suffered longer delivery timeframes due to the vast transport distances.  

Historically this would have been near impossible to do, however PACK & SEND is pioneering this fulfilment model for online retailers in Australia.

Ensure that you Secure Guarantees for Delivery Times

Be careful while committing guaranteed next-day deliveries to your customers. 

Ideally, you should commit overnight shipping only if there’s a guarantee from your carrier or fulfilment service provider. It’s because the next-day delivery requires that your fulfilment partner starts processing the order as soon as it’s logged on your system. 

So if your 3PL service provider can get the shipment out of the warehouse on the same day, then only the carrier can deliver it to the customer the next day. 

Hence, make sure that such guarantees if any, are specified in the Service Level Agreement (SLA) because if you charge the customer for next-day delivery and for whatever reason they don’t receive the parcel as committed, you’ll have to refund the shipping costs to them. 

Now imagine, if that happens frequently, your overnight delivery costs can shoot through the roof. So ensure you partner with the fulfilment service that guarantees next-day delivery. 

Conclusion

With the ever-evolving eCommerce landscape and consumer needs, faster deliveries are sure to add great value to your customer’s experience. Moreover, it also helps you optimise your inventory and warehouse operations.

So there’s no question whether you should offer overnight shipping or not. The idea is to offer the next-day deliveries without overspending on shipping costs.

Hence, you need to find ways to store your inventory at multiple strategic locations and find the right order fulfilment partner that can help you offer overnight shipping at affordable costs.

Frequently Asked Questions (FAQs)

Does overnight shipping work on weekends?

Overnight shipping usually aims at delivering orders on the next business day. During peak periods some carriers may also deliver on weekends, however this is usually at their discretion, not a standard year-round offering.  Some carriers offer overnight deliveries on weekends (typically at extra costs). 

How much is it for overnight shipping?

Overnight shipping costs depends on the factors such as:

• Shipping destination
  
  
• Weight of the package
  
  
• Dimensions of the package
  
  
• Contents of the package
  
  
• Frequency and volume of shipments

Is overnight shipping really overnight?

Yes, overnight shipping is literally completed on the next business day after the order is placed. 

What time do overnight packages arrive?

Overnight packages arrive before the end of the next business day. Usually, carriers keep a cut-off time anywhere between 5:00 pm to 7:00 pm for the next-day deliveries.

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