With your delivery costs having an impact on both your profit margins and customer satisfaction, it’s crucial that you’re aware of the best and cheapest courier service for your business.
Here’s the thing; while each shipping courier will base their delivery costs on various different factors, including the weight and dimensions of a package, delivery requirements – same-day, next-day, chosen-day or standard – as well as insurance and tracking options, the good news is that many of them will be able to negotiate better rates, depending on your business needs and the number of parcels you dispatch.
With that in mind, we have listed each of the UK’s leading courier services and detailed which ones are the cheapest and best value for domestic UK deliveries, depending on your needs and requirements.
Royal Mail not only offers a wide range of shipping services, but as the UK’s national postal service it is also a highly trusted choice for many online retailers.
That’s not all though.
When it comes to getting the best value delivery prices, Royal Mail is one of the most cost-effective solutions for smaller and lighter weight parcels.
Below, you will find the Royal Mail price list for small parcels weighing less than 1kg (remember prices are exempt from VAT), however for an exact quote based on your business needs, visit Royal Mail’s Price Finder here.
For a small parcel weighing between 1kg and 2kg, you can expect to pay around the same rate as that above for 2nd class delivery. For 1st class delivery, however, the price increases to £5.50 (or £5.45 if you pay online). Similarly, prices for a medium sized parcel up to 2kg start from £5.05. Items heavier than 2kg do incur heftier charges, starting from £13.75.
It is worth remembering that unlike other couriers, Royal Mail’s delivery rates are exempt from VAT, which is something you should keep in mind when comparing prices.
Royal Mail also offers £20 cover as standard for lost or damaged goods, although if the product you’re shipping is worth more, you may want to pay for extra cover. There is an additional charge for proof of delivery and/or tracking, so if this is something you rely on you will need to factor this in.
With regards to parcel collection, if your annual spend with Royal Mail is greater than £15,000 you will be eligible for free collection from your business premises, at a time that is mutually agreed by your business and the courier.
If, however, your annual spend is less than £15,000, there will be an annual fee incurred for this service, starting from £246 for Saturday collection (time allocated by Royal Mail), right up to £1,792 for weekday collection at a time chosen by you.
You can see the Royal Mail's prices for alternative collection times below.
UK businesses can also take advantage of Royal Mail’s business rates, by signing up for a Royal Mail Online Business Account (OBA).
While you can read all about the advantages of OBA here, a few notable ones include huge time savings, easier payment methods and access to tailored reports.
As a popular courier service, Hermes delivery costs are fairly straightforward and just like Royal Mail, they tend to be more cost-effective for businesses sending lighter weight packages.
It's worth noting that there is a 15kg and/or 1.2m parcel limit when using this courier service.
Hermes is currently in the process of transitioning from a weight-only pricing model, to a combination of weight and size (as shown below). Sellers are also given two options for their delivery when using Hermes and can either choose to drop their parcel(s) to a local collection point and benefit from a reduced rate, or alternatively opt for courier collection.
You can see Hermes parcel prices for each option below.
While Hermes includes up to £20 free cover as standard, there are certain items that it won’t provide compensation for should the item get lost, damaged or delivered late. You can view the full list here.
If your product is worth over £20, the cost for additional cover starts at as little as £0.30 for cover up to £30, right through to £10.50 for cover up to £300.
Additionally, if you send more than 150 parcels per week with Hermes, you may qualify for a Hermes Business Account. As an account holder you will benefit from more flexible pricing, 48-hour fully tracked parcel delivery, dedicated account management and free van collection.
Unlike both Royal Mail and Hermes, DPD is often a better fit for businesses shipping higher value and/or larger parcels/consignments. DPD pride themselves on their time-critical service, so it may be an ideal option if you are offering your customers a range of delivery options and specific time slots.
To give you an example, DPD’s express delivery service, expresspak, offers guaranteed next-day delivery, next-day delivery by 10.30am, next-day delivery by 12pm, as well as Saturday and Sunday delivery, each of which are often a huge selling point to customers.
Another great thing about DPD is its excellent customer service.
In fact, its interactive notifications service Predict puts your customers’ minds at ease by giving them a one-hour time slot on the day of delivery – a service which is free to all customers. All prices further include parcel tracking and proof of delivery.
By using DPD, your customers will also benefit from flexible delivery choices, with the option to have their parcel delivered to either a business or residential address, or alternatively a local DPD Pickup point.
Although DPD may not be the cheapest courier service on the market, they do offer good value for money based on the additional services it includes.
For more information about DPD prices, take a look at th company's tariff guide.
Another courier service, DPD Local (previously Interlink Express), uses the same technology and services as its sister company DPD, however it focuses on providing a more local courier service for sellers shipping smaller volumes.
Along with DPD, DPD Local is the only other courier provider in the UK to offer next-day delivery as standard, making it another great option if you give your customers a choice of delivery options.
As you can see from the services and prices listed below, DPD Local offer drop-off services – of which there are over 2,500 across the UK – with prices starting from £5.99 (ex. VAT) for items up to 5kg in weight, or from £7.49 (ex. VAT) for door to door next-day delivery.
For those using the Drop Off Service, the price remains the same (£5.99 ex. VAT), for all parcels up to 10kg and 0.6m in length, width and height. There is a slight increase, however, on parcels over 5kg on the courier collection rates listed above.
Part of the Royal Mail Group, Parcelforce, tends to be more cost-effective when shipping heavier or larger parcels.
Unlike Royal Mail, which offers 1st class (next day delivery) and 2nd class (around 3 working days) delivery options, Parcelforce’s delivery options are more specific, enabling you to choose between next day delivery, two-day delivery, next day delivery by noon, next day delivery by 10am, or next day delivery by 9am.
Each of the courier service's delivery options have a 30kg weight limit for individual parcels, as well as a limit of up to 1.5m length. It’s also worth mentioning that the length and width combined should not exceed 3m.
If your parcel is between 1.5m and 2.5m, or has a combined length and width of 5m, you will be able to use express48large. All prices also include collection, although you can save on these rates by opting to drop your parcels off at either your local Post Office branch or one of their 54 depots.
All services additionally provide free parcel tracking, as well as cover against loss or damage, and a refund if the delivery is late. If you are using express9, express10 or expressAM, you will be refunded 100% of the delivery cost if your parcel is delivered later than the stated time and you will also be covered for up to £200.
With express24 you will receive £100 cover and a 50% refund if Parcelforce fail to deliver the next working day and with express48 you will receive £100 cover and a 25% refund if they fail to deliver within 2 working days.
It’s worth noting that if you send more than one parcel within the UK per week, you could save even more on your rates with a Parcelforce Worldwide account.
This offers a range of benefits including up to 45% off standard prices, dedicated account management, as well as payment options to suit your needs. These options specifically include Parcelforce Paygo, which allows you to pay online for each delivery either upfront or at the end of the day, or alternatively you can set up a credit account and choose whether you’d prefer to be billed weekly or monthly.
While the images above show Parcelforce's prices for UK services, for an exact quote based on your needs, take a look at Parcelforce’s shipping calculator.
LEARN MORE: How to secure even cheaper shipping rates
Yodel is also amongst the UK's cheapest delivery services and is suitable for any seller shipping products under 25kg and less than 120cm in length.
The company offers a range of services, including YodelDirect, which offers free doorstep collection and is the most popular service used by Yodel’s ‘Frequent Senders’ – sellers shipping less than 5,000 parcels a year. Prices for this option start at £7.49 (inclusive of VAT).
Yodel also offers a multi-parcel pricing option, which offers reduced rates to sellers sending multiple parcels from the same collection address.
While you can see how this works below, do be aware that these prices are based on an average rate per parcel and it may work out cheaper or more expensive depending on your specific requirements.
Yodel also offers business accounts to sellers shipping a larger number of parcels per year. If you ship between 5,000 and 49,999 parcels per year, you may benefit from a small to medium business account, which offers great services and prices, account management, business tools and a customer experience dashboard.
If you send over 50,000 parcels annually, you can benefit from the same as above, as well as a personal account director and an executive sponsor who is dedicated to understanding the needs of your business.
Unlike the other courier services we have listed, DHL’s delivery rates are determined by one of seven different box/envelope sizes.
That’s not all though.
DHL also offers three different delivery options; DHL Service Point, DHLitNow and DHL by Phone.
DHL Service Point allows you to drop your parcels off at various local high street retailers or retail parks, including WHSmith, Staples, Safestore and Robert Dyas. This is a great option if you are looking to keep costs at a minimum, with prices starting from £7.95.
Alternatively, you can opt to use DHLitNow, which gives you the option to book online to arrange a collection from your home or office. You will also have the option to select pre 9:00 or 12:00 deliveries, as well as insurance services.
The other option you have is to use DHL By Phone, where you can arrange for a collection by calling the customer service line. If you are sending parcels over 70kg, you will be required to use this service.
While you are not required to register for an account, regardless of which service you use, it’s worth noting that there are benefits to doing so, particularly if you send parcels regularly. More specifically, you could benefit from discounted rates when you send multiple shipments per month.
Each of DHL's services also offers next working day delivery, fast and secure parcel delivery, door-to-door delivery, free tracking by text, phone or online, and a signature on delivery (where available).
Get a quote and compare DHL’s courier services and DHL prices by visiting the company's website.
CollectPlus is another cost-effective courier service available to online sellers, with prices starting from as little as £3.99 (inclusive of VAT). What’s more, it offers £50 free cover as standard and free tracking on all parcels.
Do keep in mind, however, that CollectPlus only offers a drop off service and not courier collection, although with over 7,000 Collect+ stores across the UK it may still be a convenient option for your business.
It may also be a great option for startups, as they offer in-store label printing for 30p.
While there’s no option for next-day delivery, they do offer Economy Service (3-5 working days) and Standard Service (2 working days) and will dispatch parcels up to 10kg.
Best practices for securing cheaper shipping rates
Negotiate better rates
Here's the important part. None of the prices shown above are set in stone, especially for businesses who send parcels on a regular basis.
In fact, the vast majority of courier services will be flexible to meet your needs and may be able to offer substantial discounts when you are dispatching a large quantity of parcels.
In our experience, shipping couriers such as Yodel will offer even better rates for customers who can be flexible with their requirements. As an example, businesses who can tailor their shipping arrangements to meet Yodel’s needs are offered even better shipping prices.
Although that's just one example, it is something worth discussing with your account manager, regardless of which provider you use.
Consider the use of a shipping aggregator
Shipping aggregators such as Parcelhub, Parcel Station, GFS and Parcel2Go can offer huge savings on your deliveries, simply by passing on the reduced rates that they are able to secure by using these couriers on a regular basis. They can also easily compare courier prices to make sure you're getting the best shipping rates for your business.
Look at using multiple couriers
As reflected in the prices above, different couriers will be more cost-effective for businesses shipping certain parcel types – lighter-weight goods, heavier goods, smaller parcels, longer parcels etc.
Now while you can of course secure cheaper costs when you are shipping a higher number of goods, you may actually save more by using a combination of couriers if you are selling products of different weights and dimensions. If this is the case, this is an option that is definitely worth exploring.
For more examples on how you can reduce your delivery costs, have a read of this.
Explore your opportunities with an inventory management system
For example, some systems provide a way to easily calculate the cheapest courier service for each order being sent, based on a variety of elements, such as size, dimensions, cost of order and so on.
Advanced inventory management solutions should also provide a business rules engine so that you can automate even more of your shipping and fulfilment processes, along with customised functionality for enterprise businesses.
Look beyond initial cost
Be mindful that the cheapest option may not always be the best for your business and you should always take into consideration the reviews of other online sellers, as well as the overall level of service they offer.
So, there we have it. A list of not only the cheapest, but also the most-effective delivery services in the UK, depending on your needs and requirements.
We'd love to hear your experiences on how you've cut back on shipping costs or which courier services you've found to be the best value for your business, so leave a comment below.