It may be a surprise for you to know that commercial and residential shipping costs are fundamentally different. Using an office address is more economical than using a home address. In this article, you will learn: What are residential shipping, commercial shipping, and the difference between the two shipping types. We will also address how logistics companies differentiate between commercial and residential addresses.

What is Residential Shipping?

Residential shipping is the process involving the shipment of packages to a residential address. Like shipping a product to a customer’s home address instead of shipping it directly to their place of business. Residential shipments are generally more expensive than commercial shipments since they include a residential fee on top of the transportation cost.

What is Commercial shipping?

Commercial shipping is a term used to describe the shipping of products to a business or commercial address. Commercial addresses are easier to ship than residential addresses, therefore shipping is less expensive.

Why do residential deliveries cost more?

There are several reasons why Residential shipping is more expensive than Commercial shipping, including the fact that shipments have to be delivered to a spread-out area and also they have to go door-to-door, resulting in more gas consumption and wear on vehicles.

Furthermore, if the shipments are large and bulky in nature then they have to use bigger trucks. Since the residential roads are narrower than the commercial roads they are difficult to maneuver, which requires time and consumes more fuel. 

Whereas commercial deliveries are easy to ship Because most addresses are clustered in commercial areas, it is simpler to ship couriers to numerous addresses at the same time. When you receive orders to a commercial apartment, your delivery provider can combine all of the goods that need to be delivered to the department's offices into a compact vehicle in one go. 

Finally, residential deliveries may require multiple stops — say, at a door and then upstairs — which is very time-consuming and difficult for couriers.

How do shipping companies differentiate between commercial and residential addresses?

If you’re a residential shipping customer, your freight is determined by the distance weight or zone it travels to reach its destination. There is a base fee for residential rates, and additional fees for zone travel, based on the zone the package reaches. This is because commercial addresses are located at closer distances to each other than residential addresses.

Shipping is a complex part of business, so it’s important to be aware of how your products are being shipped to customers. There are many different shipping options available for business, some more cost-effective than others. 

If you need more assistance regarding shipping then our expert team is ready to help you. Contact us at sales@sbsexpedited.com or call us at 1 855 811 0727.