Major carriers have updated their rate structures for 2026. Small business owners should understand how those changes will impact the cost of goods sold (COGS) for their ongoing budgets. Financial advisors can learn how shipping fees affect entrepreneurs and help small business owners find supportive resources during challenging economic times.
The Current Profit Margin Crisis
Any established profit margin strategy includes the latest shipping costs when businesses depend on product orders. Major carriers routinely adjust their fees to keep pace with industry fluctuations. UPS and FedEx recently established a 5.9% average rate increase for 2026, affecting global companies.
The pricing jump puts shipping fees at the center of the COGS for businesses. While entrepreneurs may have previously prioritized packaging and labor costs, financial advisors should encourage them to pay close attention to shipping rates. They will affect pricing for large packages and residential shipments, increasing operational costs in the long term.
Fluctuating customer demand will also affect how small business owners manage higher shipping fees. According to Purolator’s Lindsey Martin, VP of Marketing, “Economic, socio-economic and labour market disruptions can also lead to demand rise and fall throughout the year. Port strikes, significant weather events, such as fires and flooding, and interest rate fluctuations can all add disruptions to businesses and consumers alike.”
Hidden Fees Hurting Small Business Owners
Entrepreneurs cover numerous costs when shipping products. They must pay for delivery types and potential address corrections. If their products require specialized handling, additional surcharges will apply.
Fuel surcharges also help shipping companies manage the increasing cost of gas. Commercial consumers paid 5% more for gas in 2025 compared to 2020. Shipping costs could rise if the fossil fuel industry remains turbulent. As small business owners talk with financial advisors about their shipping expenses and strategies, monitoring the gas industry is a crucial factor to consider.
Choosing shipping partners based on their fleet usage could help fuel concerns. Purolator is a freight, package and logistics provider that uses electric and alternative fuel delivery fleets. Clients get smaller carbon footprints and worry less about fossil fuel prices. Switching to a partner with similar fleet standards could help small business owners enjoy long-term reduced shipping costs.
How to Reduce Shipping Costs
Financial advisors can also help small business owners better manage their shipping expenses. They only need proven strategies. Refining how they approach shipping arrangements could benefit small business margins across industries.
Schedule Shipping Cost Audits
Reflecting on quarterly shipping expenses with accounting software is helpful for small business owners. Financial advisors can schedule one of three review strategies to analyze shipping fees specifically. If prices are trending upward, their ongoing budget strategies can shift to accommodate the increase.
Adjust Multi-Year Financial Models
Modeling likely financial outcomes is a foundational service for businesses of all sizes. Adjusting them to changing shipping costs is crucial. Small businesses contribute 39% of value added in the business economy, but not if they are making operational decisions based on inaccurate models.
Financial advisors can recommend that small business owners factor carrier rate changes into three-year financial models. The pricing may change within that time, but the shorter-term modeling results are easier to update. They’ll become more accurate with annual updates than long-term models with less frequent adjustments.
Negotiate Contracts Annually
Many entrepreneurs are too busy to negotiate every contract annually. Financial experts could help secure better shipping costs for small businesses by negotiating carrier contracts each year. Autorenewing could lock in consolidation strategies or pricing that does not reflect current company needs.
Business owners can also use the meetings to discuss better ways to manage costs. They might request that the carrier switch their packaging materials or fleet usage strategies. Given that 29% of businesses face supply chain issues, scheduling negotiations could help reduce costs and give entrepreneurs more resources to invest in other aspects of their companies.
Consider a Reverse Logistics Strategy
Businesses moving products from manufacturers to consumers have a standard supply chain logistics flow. While that’s a successful way to conduct business, people may need to try more creative strategies. Optimizing the company budget with a reverse logistics perspective might simplify costs as carriers raise prices.
A reverse strategy moves backward from the consumer, including additional potential fees, like charges for returned items. Purolator found that optimized reverse logistics recover up to 65% of the original value of returned items. Reducing costs related to returns could save small business owners much-needed funding.
Manage COGS More Easily
Achieving reduced shipping costs is achievable. Company owners can manage their budgets more effectively with a serious capital restructuring after updates such as a 5.9% price hike from major carriers. Financial advisors can talk with small business owners to adjust brand-specific strategies and connect them with helpful resources as needed.
