Total Retail: Free Shipping Still Wins Shoppers, But Retailers Are Paying More for It
Free shipping still drives holiday conversion, but in a new piece for Total Retail, Ship.com President and COO Kyle Henzel lays out why it's getting harder to afford. Rising diesel prices, weekly fuel surcharge swings, tariffs, and dimensional pricing are all stacking on top of each other, and Henzel points to industry data suggesting retailers could collectively spend billions more subsidizing free shipping this holiday season.
His argument isn't to cut free shipping, it's to stop treating it as a single blanket policy. A lightweight order shipping a short distance and a bulky, low-margin item crossing several zones don't cost the same to fulfill, so Henzel walks through how retailers can model thresholds around actual profitability, use delivery speed rather than price as the lever, cut avoidable fulfillment costs, and track performance at the order level instead of guessing. Heading into 2026, he argues the retailers who come out ahead won't be the ones promising free shipping on everything, they'll be the ones who know exactly what that promise costs and when it's worth it.
