Then and Now: How Expensive Is Freight and Parcel Shipping? – Stonemaier Games

Then and Now: How Expensive Is Freight and Parcel Shipping?

Freight shipping has been extremely volatile over the last 30+ months. Today I’m bringing in an industry expert in shipping, Fulfillrite, following their extremely generous $2000 donation match as part of our recent charity auction.

Here’s Brandon for detailed thoughts and data about how freight and parcel shipping costs have changed over the last 30+ months. Thank you, Brandon!

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If you’ve backed – or run – any Kickstarter campaigns lately, you probably know that freight and shipping is really expensive right now. After all, since when does freight shipping even make the news in the first place? It’s supposed to be an invisible industry that quietly stocks our stores when we’re not looking. But between the slowdowns and the high prices, anyone who’s reading the news has become a bit of a logistics expert lately!

Sure, the cost of everything is going up, as the inflation rate has been between 8 and 9% for the better part of the year. But paying $100 for a cheap hotel room and $4 for a gallon of gasoline is nothing compared to the 400% increase in container shipping rates.

So exactly how expensive is it to fulfill a Kickstarter campaign right now? Here are some concrete facts and figures.

The cost of freight shipping, 2020-2022

First, to answer that question, you must break apart Kickstarter fulfillment into two parts: freight shipping and parcel shipping. Freight shipping is the process of sending games in bulk from the manufacturer to the fulfillment center. Parcel shipping is the process of sending out individual games to individual backers.

The easiest way to track the cost of freight shipping is to look at the price to rent space in a container to be shipped by sea. It just happens this is also how most board games are shipped from manufacturers to fulfillment centers.

A standard shipping container is 8 ½ x 9 ½ x 40 feet long. But there are also containers that are only 20 feet. Some really big Kickstarter campaigns need multiple 40-foot containers to ship inventory. Most only need part of a container. But the overall price to rent space in a container determines how much a Kickstarter creator pays to get their games from one part of the world to another.

This chart shows 20′ container rates over the last 30+ months:

overall average for 20′ container ocean freight

As you can tell from this 20′ container chart, average freight container rates have skyrocketed. In July 2020, a container rate cost an average of $1,995. One year later, in July 2021, it was $9,330. It even broke $10,000 for a short period of time – an over fivefold increase.

Rates are starting to go back to normal, though, with the (not charted) 20′ rate at the time of writing being around $3,500. Economic indicators seem to suggest that freight rates will continue to fall, but we’ll only know for sure in a few months.

Now at this point you may say, “wait, weren’t some creators complaining of containers costing upwards of $30,000?” Yes – for many routes, that was absolutely an issue. The stats above come from the Drewry World Container Index, which averages a bunch of common sea shipping routes. Most of those routes are shorter and cheaper than shipping from China to the US, as is common with board game manufacturing.

For what it’s worth, I ran a quote on October 12, 2022 for a 40’ container from Shanghai to the port of New York and New Jersey for $8,600 – about 2.5x what the index was on that day. Jamey, on the other hand, has paid as much as $33,000 for a container from China to Chicago – a little over 3x the index rate at the time he received that quote.

[JAMEY: I talked to Brandon about this after seeing the 20′ chart; we typically ship 40′ containers from Shenzhen to St. Louis, Calgary, Australia, and the UK. For those US shipments, we saw them climb up to $33,000 in early 2022, and they’ve steadily decreased down to just under $20,000 recently, which is still around 5x higher than they were pre-pandemic.]

Long story short, the quote you end up with is going to vary heavily based on when you pull the quote, where the goods are coming from, and where they’re going.

The cost of parcel shipping, 2020-2022

The other cost of shipping – parcel shipping – has increased at a relatively slow pace. In fact, the increases in parcel shipping costs have generally been lower than inflation. UPS and FedEx have kept rate increases in the 6-7% range between 2021 and 2022. Unfortunately, most USPS rates – especially flat rate boxes – have gone up by double digits in the same time frame, ranging from 10-24% increases.

Here’s a chart so you can compare apples to apples. As a general rule, zone 2 shipping means “the next city over” and zone 8 shipping means “across the USA.” USPS flat-rate boxes are limited only by size, and do not consider the weight of the items to be shipped or how far they have to go.

2020 2021 2022
USPS Small Flat-Rate Box $8.30 $8.45 $10.40
USPS Medium Flat-Rate Box $15.05 $15.50 $17.05
USPS Large Flat-Rate Box $21.10 $21.90 $22.45
USPS Padded Rate Envelope $8.40 $8.55 $10.60
UPS Ground – 5 pounds, zone 2 $9.67 $10.46 $11.24
UPS Ground – 10 pounds, zone 2 $11.41 $11.92 $12.69
UPS Ground – 5 pounds, zone 8 $14.97 $16.02 $17.13
UPS Ground – 10 pounds, zone 8 $18.55 $19.57 $20.84
FedEx Ground – 5 pounds, zone 2 $9.87 $10.46 $11.24
FedEx Ground – 10 pounds, zone 2 $11.41 $11.92 $12.69
FedEx Ground – 5 pounds, zone 8 $14.97 $16.02 $17.13
FedEx Ground – 10 pounds, zone 8 $18.55 $19.57 $20.84

There is one more wrinkle to consider here. For the purposes of this article, I’m comparing retail prices. That is what you would pay if you walked into the post office or UPS/FedEx store and asked to ship your game in the cheapest possible way.

If you ship a lot of packages, though, you will likely pay less per package shipped. Order fulfillment centers, in particular, get deeply discounted postage. However, some of those discounts – particularly for the USPS – are about to be dramatically curtailed. For now, it makes more sense to pay attention to UPS/FedEx rates to get a sense of where the shipping industry is going.

Reasons for hope

Amid the stark increases in prices, I would like to leave you with some empirically sound reasons for hope. First, container shipping prices have been falling dramatically for months and signs indicate they are likely to continue doing so. They may even approach pre-pandemic prices soon, which would be a huge relief for Kickstarter creators.

Additionally, while the USPS is raising its rates by a lot, UPS and FedEx remain very competitive options for shipping. They have even been raising their rates at a pace slower than inflation. That means that the act of shipping games out to individual backers should still remain within reach.

Want to make crowdfunding less stressful? Letting a fulfillment company ship rewards for you is a great way to do that. If you want to learn more about how that works, request a quote from Fulfillrite today.

Brandon Rollins is Director of Marketing at Fulfillrite. His main areas of expertise are online marketing and supply chain management. He also runs Pangea Marketing Agency and writes for Weird Marketing Tales.

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13 Comments on “Then and Now: How Expensive Is Freight and Parcel Shipping?

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  1. Hello Jamey,

    I’m doing research on parcel shipping on other projects, including reading up on your blog of course, and I’m finding mixed messages about calculating shipping after vs a flat rate. I assume calculating shipping after is due to shifting costs, and the publisher wants to not back themselves in a corner between the campaign and the shipments? But there’s also a divide between calculating shipping after and others saying that’s not ok. Some of those are planning pricing like $5 shipping for anyone in the US which, I have to assume, needs to be subsidized somehow because that’d be a significant loss per the list here on parcel shipping. Why is it so taboo? Sorry if you’ve already covered this and I somehow missed it in a post here.

    Assuming there’s a valid reason for it, the other question I have is: For small publishers, are people generally ok paying $10 flat rate for shipping? That would cover those costs, since I don’t know how/who to subsidize shipping and I’ll only be going domestic for this project. But I worry given the small product (card games).

    1. Thanks for posting this here, Paul. I’m not so sure that it’s actually taboo at all–rather, it’s more of a trend that creators have found that backers are okay with paying shipping after the project based on approximate rates stated during the campaign. It gives the creators flexibility based on their final box weights/sizes, and backers don’t seem to mind as long as the costs are close to the estimates.

      That said, flat rate doesn’t actually make sense, even for backers. Different regions have different shipping costs, and backers know that–they expect to be charged based on their regions costs (though they do appreciate when those shipping fees are subsidized by the creator).

      I would generally suggest not going domestic only (wherever domestic may be for you). That is sure to frustrate backers around the world even more than paying high shipping fees–at least then they have a choice.

      1. Thanks for your reply Jamey. I should preface that I’m VERY new to most of this, but of course learning about and getting into this “hobby” is getting addicting.

        Here are followup questions:
        – How do people cover all needs (testing, VAT, etc) in, say, the EU? Where is the info on all of that in one location? I feel like it’s hard to find clarity on that and so I thought keeping it domestic would be a manageable option and I don’t want to get in over my head, but of course I’d like to ship worldwide or at least to the EU without it overwhelming my costs.
        – How is someone supposed to subsidize shipping if they do it themselves? I assume them that I would HAVE to go with a fulfillment company? I realize fulfilling myself (and a team of helpers) is a recipe for disaster, but as a fiscally conservative person doing a hobby project, it worries me to try and bite off more than I can chew and get but hard in the process.

        I’ll of course look elsewhere in your blog about this. Just thought I’d clarify where I’m thinking and why.

          1. Paul: Subsidizing shipping just means that you charge customers less than the actual amount of shipping. For example, we have heavy packages that cost $18 to ship sometimes, but we charge customers $14 instead. We “lose” $4, but we only do that because (a) the sale is still profitable and because (b) it helps make the shipping cost more palatable to the customer.

          2. Thanks for clarifying (below) Jamey. I thought there was some company/org that helped subsidize, but that term makes sense now. All the best, and thanks again for the fantastic resource!

  2. […] products when purchased by themselves. We still have very tight margins on many products, and the huge freight shipping costs over the last few years haven’t helped, but the formula has made a significant […]

  3. Great article, very interesting. I have a couple questions since I know virtually nothing on the topic. How many games does that $8,600 container 40-foot container hold, assuming it is a “normal” size box (e.g., Wingspan or Viticulture)? And how much have the costs at fulfillment centers increased to take those pallets of games that arrive and turn them into packages that are ready for UPS/Fedex to pick up and deliver to customers? When everything is factored in, is the cost of getting a game from the manufacturer to the customer less now than a year ago or is the drop in freight wiped out by the other increases?

    1. Jeff: I should note that I haven’t seen an $8600 container in the last 2 years–I wish I had some of those! :) Wingspan has a fairly standard box size (296x296x70mm), and on pallets, 5292 of them fit into a 40′ container.

      As for labor costs at fulfillment centers, I haven’t seen any increases (if they’re happening, they’re very small).

      That’s a good question about the overall freight plus parcel shipping costs per unit. I would say it’s a little cheaper right now than a year ago, and definitely cheaper than anything shipped from China from December ’21 through May ’22.

  4. Really interesting background into the subject from a real expert for a chance!

    I see some people demanding money back from kickstarters because the shipping is dropping. What I do wonder, when is the price that a publisher pays for the shipping fixed? Is this at the time of getting the quote or closer to when the games gets shipped?

    1. Thanks for sharing, Aarnt–I hadn’t heard of people making such demands, though I can see why people might be inclined to ask that of any publisher that has ever increased shipping costs after the initial campaign (based on the logic that it should work both ways). Freight shipping costs are locked when the container is booked; parcel shipping is probably the actual postage cost when the packages are shipped (though, as you can see in Brandon’s chart, parcel shipping increases are marginal).

      1. I expected it to be it like that. I mostly saw those demands/comments with a campaign from a certain company that makes ‘cool mini’s’.

        But those are the kind of people that want money back when the prices drop but don’t want to pay extra when the prices increase.

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