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Smart WarehousingJan 29, 2024 10:00:00 AM3 min read

How Do Shipping Labels Work?


While shipping labels may seem like a minute detail in the e-commerce world, they are integral to inbound and outbound logistics. Moreover, they are a fundamental driver of customer satisfaction and profitability for your business. Shipping labels serve as a vital source of information within your supply chain, ensuring workers, as well as your technology, can track pertinent details surrounding your packages (think: origins and destinations).


Without accurate, clear shipping labels, you run the risk of orders being lost or mishandled. The result? A negative customer experience—something that can quickly damage your brand’s reputation, customer loyalty, and revenue. In this post, we’ll discuss the ins and outs of shipping labels and how a third-party logistics (3PL) provider can help optimize your shipping process. 

What Are Shipping Labels?

During transportation, shipping labels communicate crucial information to a carrier about a package’s destination. Standard shipping labels include the following details:

  • Recipient Details: This includes name, address, and phone number—information pertinent for delivery and in case contact is needed. 
  • Sender Address: This ensures the parcel can be returned if needed, and lends to a positive brand experience. 
  • Tracking Number: Typically in the form of a barcode, the carrier can capture a shipment’s progress while in transit. 
  • Package Weight: This ensures three things: shipping rates are calculated correctly, weight restrictions are considered during transportation, and packages are loaded onto trucks as efficiently as possible. 
  • Shipping Method: Provides the carrier with insight into whether the package requires expedited shipping or special handling. 
  • Payment: This shows if the postage has been paid. 

Importance of Shipping Labels

Shipping labels play a pivotal role in ensuring packages move correctly from point A to point B. Without an accurate shipping label, you risk packages becoming lost, being delayed in transit, or being delivered to the wrong address. The result? A poor customer experience. And consumers love voicing their experiences. From negative reviews on Google to unsavory social media posts, a less-than-steller delivery can damage your brand's reputation and cost you repeat business. Think of it this way: Even if you’re selling the finest items on the planet, that doesn’t matter if they never arrive!

Best Practices for Using Shipping Labels

While shipping labels may seem straightforward, there are some important considerations to keep in mind to keep yourself out of a sticky situation. Let’s explore best practices for smart shipping label use. 


1. Navigating Your Unique Shipping Requirements

Efficiently and accurately generating shipping labels requires a clear understanding of your company’s shipping needs. From rules and regulations to fragile, perishable, and hazardous materials, how goods are shipped should always be considered. Your 3PL partner can serve as a valuable resource for understanding where and when to display special instructions, which can save you time and dollars, and improve the customer experience. 


2. Double-Check for Accuracy

Implementing a system to ensure information is displayed correctly is crucial for avoiding delays and ensuring orders are delivered to the right address. We can’t understate the importance of accuracy. Packages landing on the wrong doorstep can lead to a lack of trust for your customers, as well as extra costs for your company when you need to ship a replacement!


3. Prepare Your Budget

Shipping costs should be forecasted and woven into your business’s budgeting conversations to ensure you have the capital in place to keep operations moving seamlessly. Factors like weight, size, and destination all influence the cost of a package. And, the reality is, without a strategic partnership in place, shipping can carry a fairly lofty price tag. 


4. Partner With a 3PL

By aligning with a reputable 3PL, your business will reap a multitude of benefits, including cost-effective shipping rates—all thanks to the 3PL’s established network of carrier relationships and bulk discount rates. Your 3PL provider will also have the ability to integrate with your current technology stack to process orders efficiently, automate label creation, and provide real-time tracking data. By outsourcing your fulfillment needs, you can hand off the labor-intensive burden of packing and shipping orders and focus your attention on scaling your business. 

Get SMART About Your Shipping

Streamlining your shipping process provides numerous benefits—from ensuring your supply chain runs as efficiently as possible to enhancing your customer experience. Here at Smart Warehousing, we can take care of creating accurate shipping labels for your packages, sparing you the hassle and stress. We do all the heavy lifting, including order fulfillment, inventory management, and transportation, allowing your business to focus on core competencies like scaling and customer service. To learn more about how our team can create a custom solution to fit your unique needs, contact us today.