A Step-By-Step Process of Domestic Shipping in Australia

Understanding the stages of domestic shipping is a crucial strategic advantage for businesses. 

The primary means for shipping companies to compete is on cost – on how they charge, or at least the perception of how they charge. For businesses, it pays to understand what influences these charges, and whether a stated cost saving actually equates to real value and better outcomes, or just paying less upfront while incurring bigger problems down the line.

Read on to be able to make more informed decisions, streamline your logistics, and give your business a sustainable platform to grow from.

Contents:

Stages of domestic freight shipping in Australia

Pre-shipment preparations

Pickup and initial handling

Transportation

Delivery and post-delivery

Shipping costs and pricing

Summary

Stages of domestic freight shipping in Australia

There are 5 main stages of domestic shipping in Australia:

• Pre-shipment preparations
• Pickup and initial handling
• In-transit processes
• Delivery
• Post-delivery

1. Pre-shipment preparations

Effective pre-shipment preparations are the foundation of any successful fulfilment. These steps ensure compliance, minimise risk, and set the stage for efficient transportation of goods.

Regulatory compliance and documentation

The first step involves researching shipping regulations to avoid legal issues and delays. This involves adhering to guidelines set by authorities like the National Heavy Vehicle Regulator (NHVR). 

If in doubt, business operators should always refer back to NHVR guidelines. For instance, NHVR mandates specific requirements for heavy vehicle operations, which if not adhered to, can lead to significant penalties.

Learn more about The importance of compliance in freight shipping.

Packaging and labelling

The second step focuses on packaging and labelling goods correctly to reduce damage-related losses and ensure safe delivery. The use of dimensional or cubic weight by major couriers like Australia Post and FedEx has a strong bearing on shipping costs, so size and weight matters. 

Consider the most suitable packaging materials, especially for bulky yet lightweight items that might incur higher costs due to their size alone.

Choosing the right shipping partner

Selecting the right carrier is critical. Your choice depends on various factors, like the nature of goods, destination, and budget constraints. For example, a business requiring fast delivery across long distances might prefer air freight, whereas road transport could be more economical for shorter distances. Carriers like Toll, FedEx, and DHL offer different services tailored to diverse shipping needs.

2. Pickup and initial handling

The pickup and initial handling stage is extremely important, comprising several intricate steps to ensure goods are accurately transferred from the sender to the shipping carrier.

Scheduling the pickup

This involves coordinating with the carrier to establish a suitable time and date. Scheduling the pickup requires clear communication between sender and carrier to ensure timing lines up with schedules. Efficient scheduling reduces waiting times and potential delays, contributing to a smoother overall process.

Preparing goods for transit

Preparing goods for transit means ensuring that items are packed securely and ready for handling by the carrier. This includes double-checking packaging for durability, ensuring labels are correctly placed and visible, and that any special handling instructions are clearly indicated. For example, fragile or volatile items need to be marked accordingly, and if goods require temperature control, this should be noted in advance.

Initial inspection and loading

During pickup, an initial inspection is often conducted by the carrier to ensure that the goods match the shipping documentation and are in acceptable condition for transit. This is also the stage where goods are loaded into the vehicle. It’s important that loading is done carefully to avoid damage and optimise the use of space. This step is about ensuring that goods are not only secure but also arranged in a way that allows for simple unloading at the destination.

Documentation handover and confirmation

The final step in this stage is the handover of shipping documents to the carrier and confirmation of pickup. This typically includes a bill of lading or a shipping label that outlines the details of the shipment, which is important as it legally transfers responsibility for the goods to the carrier. A confirmation of pickup, often provided electronically, serves as a record and can be used for tracking the shipment’s progress.

Need help managing your freight handling? Check out our Tips For Optimising Your Freight Management Process.

3. Transportation

In-transit processes of domestic shipping in Australia ensure that goods can arrive on time. This stage involves strategic route planning and leveraging technology for real-time tracking.

Route planning and management

1. Analysing Routes and Modes of Transportation. The first step is selecting the most efficient routes and modes of transportation. Factors such as distance, cargo type, and delivery deadlines are considered. For example, coastal shipping is an effective option for long-distance transportation across Australia, offering cost savings compared to road freight, especially for large or heavy shipments.
2. Carrier Coordination and Scheduling. Once the route and mode are selected, coordination with carriers for scheduling transit is crucial. This includes negotiating timelines and understanding the carrier’s capacity and route specifics. For instance, coordinating with rail services for cross-country transportation or with trucking companies for shorter, regional deliveries.
3. Contingency Planning. Effective route planning also involves contingency planning for potential disruptions like weather conditions, traffic, or logistical delays in order to minimise the impact on delivery schedules.

Real-time tracking and updates

1. Implementing Tracking. Technology plays a crucial role in tracking and optimising bands around ensuring timely deliveries.” The use of GPS tracking, RFID tags, and other sensor-based technologies allows for real-time monitoring of shipments.
2. Data Analysis for Optimisation. Continuous analysis of data collected from tracking technologies helps optimise routes and predict potential delays. GPS data can be used to reroute shipments in real time to avoid traffic congestion or road closures.
3. Communication with Stakeholders. Keeping all stakeholders informed with real-time updates is essential. This could involve automated systems sending alerts to customers about the location and estimated time of arrival of their shipments, thereby enhancing transparency and trust.
4. Feedback Integration for Future Improvements. The final step involves integrating feedback from the tracking system into future planning. This could mean adjusting routes, changing transportation modes, or improving packaging based on the data collected during transit.

Want to know more about how freight is shipped? Check out our ultimate guide.

4. Delivery and post-delivery

The delivery and post-delivery stages are critical in the shipping process, directly impacting customer satisfaction and retention. This phase requires careful management of last mile delivery and efficient post-delivery services.

Last mile delivery

The last mile is crucial for customer satisfaction. Körber’s 2023 State of Shipping and Returns survey reveals that 70% of consumers have changed their view of a brand following a delayed online order.

1. Planning and Optimising Delivery Routes. The last mile delivery starts with planning and optimising delivery routes. This involves determining the most efficient paths to reach the customer, considering factors like traffic, delivery windows, and geographic challenges. For example, urban deliveries might require different routing strategies compared to rural areas due to traffic and accessibility.
2. Using Local Distribution Centres. By storing goods closer to the end customer, delivery times can be shortened, directly impacting customer satisfaction.
3. Customer Communication and Real-Time Updates. Keeping the customer informed with real-time updates on delivery status is key. The ‘last mile’ of delivery is where the customer is. That’s where the person who’s going to make buying decisions is spending the money – and, therefore, the biggest influencer of customer satisfaction.
4. Efficient Delivery Execution. The actual delivery execution must be efficient and considerate of the customer’s needs, including preferences for delivery times and handling instructions.

Discover how delivery management software can optimise your last mile delivery and streamline the shipping process.

Post-delivery services

1. 1. Handling Returns and Exchanges. Effective management of returns and exchanges is the first step in post-delivery services. This includes a straightforward and customer-friendly process for handling returns, which can significantly enhance customer satisfaction and loyalty.
   2. Gathering Customer Feedback. Gathering and analysing customer feedback after delivery is crucial. While most customers have no interest in interacting with a brand once their item has been delivered, any feedback you can get will provide valuable insights and highlight areas for improvement.
   3. Continuous Improvement and Relationship Building. The final step is around taking this customer feedback and seeing how it can be actioned to improve your delivery and post-delivery services. This includes building and maintaining a positive relationship with the customer, encouraging repeat business and brand loyalty.

Shipping costs and pricing

So, what are the factors that directly influence shipping costs, strategies for cost savings, and the intricacies of shipping pricing structures?

1. Factors influencing shipping costs

• Distance and Route. Naturally, the distance between the shipping origin and destination, as well as the chosen route, significantly impact costs. Longer distances and routes with higher operational costs (like those crossing remote areas) typically incur higher charges.
• Weight and Volume of Shipments. Based on dimensional weight pricing adopted by major couriers, both the physical weight and volume of the shipment affect the cost. Bulky or heavy items typically cost more to ship.
• Type of Goods. Special goods like perishables, fragile items, or hazardous materials may require special handling, adding to the cost.
• Mode of Transportation. Different modes (road, rail, air, coastal shipping) have varying cost implications. For example, air freight is usually more expensive than road or rail.
• Fuel Prices. Fluctuations in fuel prices directly impact shipping costs, especially for long-distance road and air freight.
• Carrier Selection. Different carriers offer varied pricing structures. Some may offer more competitive rates for certain types of shipments or routes.

2. Cost-saving strategies and discounts

• Consolidation of Shipments. Combining smaller shipments into one larger shipment can reduce costs significantly.
• Negotiating with Carriers. Building long-term relationships with carriers can lead to better rates and discounts.
• Flexible Shipping Schedules. Being flexible with shipping times can allow businesses to take advantage of lower rates during off-peak periods.
• Using Local Distribution Centers. Using local distribution centres for last mile deliveries can reduce transportation costs.
• Regular Cost Audits and Carrier Performance Reviews. Regularly reviewing shipping costs and carrier performance can help identify areas for cost reduction.

3. Understanding shipping pricing structures

• Base Rates and Minimum Charges. Carriers typically have base rates for different shipping services, along with minimum charges that apply regardless of shipment size.
• Surcharges and Additional Fees. Additional fees like fuel surcharges, handling fees for special goods, and residential delivery charges can add to the overall cost.
• Volume Discounts and Contract Rates. Businesses shipping in large volumes can often negotiate volume discounts or contract-specific rates.
• Dynamic Pricing Models. Some carriers use dynamic pricing models where rates fluctuate based on demand, capacity, and other market factors.
• Understanding the Total Cost of Ownership (TCO). It’s important for businesses to consider the TCO, which includes not just the direct shipping costs, but also indirect costs like inventory carrying costs, returns processing, and customer service related to shipping.

Summary

The competitive edge in freight management often boils down to how cost-effectively a company can manage each stage. The more you know about the big picture and the granular factors that shape it, the better equipped your business will be to optimise your overall shipping process while maintaining customer satisfaction.

See how MachShip can help you optimise each stage of your shipping process today.