What is the difference between residential and commercial shipping?

August 17, 2023 Joe Jordan

What is the difference between residential and commercial shipping

Navigating the world of shipping can be confusing, especially when it comes to understanding the disparities between residential and commercial shipping services. In this blog, we break down the key dissimilarities, pricing factors, and essential considerations to help you make informed shipping decisions for your business or personal needs.

What Is Commercial Shipping?

Commercial shipping refers to transporting goods and merchandise on a large scale, typically for business purposes. It involves moving products from manufacturers, suppliers, or distributors to wholesalers, retailers, or end consumers.

Unlike residential shipping, which caters to individual customers and smaller quantities, commercial shipping deals with bulk shipments and often involves contracts between businesses and shipping carriers.

Examples of commercial shipping include:

  • Distributing products from a manufacturing facility to regional warehouses.
  • Transporting goods from wholesalers to retail stores.
  • Shipping raw materials to factories for production purposes.
  • Delivering bulk orders to corporate clients or businesses.

Commercial shipping services encompass a wide range of solutions designed to cater to businesses' logistics and transportation needs. Some examples of commercial shipping services include:

  • Freight Shipping - Transportation of large and heavy cargo using various modes, such as trucking, rail, ocean, or air freight.
  • LTL (Less Than Truckload) Shipping - Consolidating smaller shipments from multiple businesses into a single truckload, reducing costs for each company.
  • Fulfillment Services - Warehousing, order processing, and shipping solutions for e-commerce businesses to manage their inventory and shipping operations efficiently.
  • Temperature-Controlled Shipping - Transporting goods that require specific temperature conditions, like pharmaceuticals, food, or medical supplies.
  • Expedited Shipping - Providing faster delivery options for time-sensitive shipments.

These are just a few examples of the diverse range of commercial shipping services available to businesses to effectively facilitate their supply chain management and meet their customers' demands.

What Are Commercial Packages?

Commercial packages are parcels or shipments that businesses send to other businesses or customers as part of their commercial operations. These packages typically contain products, goods, or documents related to business transactions.

Commercial packages differ from residential packages, which are addressed to individual consumers. Businesses often use commercial shipping services to handle these packages, ensuring efficient and cost-effective delivery to meet their operational needs and maintain a smooth supply chain.

What Is Commercial Delivery?

Commercial delivery refers to transporting goods and products on a business-to-business (B2B) or business-to-customer (B2C) basis. It involves the shipment of items from one commercial entity to another, supporting business operations, supply chains, and meeting customers' demands efficiently.

What Does Residential Shipping Mean?

Residential shipping pertains to delivering packages and goods directly to individual customers' homes or residential addresses. It involves shipping products from businesses or retailers to consumers for personal use or consumption.

Unlike commercial shipping, which deals with bulk shipments for businesses, residential shipping focuses on smaller quantities and individual customers, ensuring that products reach their intended recipients in a residential setting.

Examples include:

  • Online Shopping - When customers order products from e-commerce websites, the packages are delivered to their residential addresses.
  • Subscription Boxes - Monthly subscription services deliver curated packages of goods directly to customers' homes.
  • Gift Deliveries - Sending gifts or presents to friends or family members at their residential locations.

What Is the Difference Between Commercial and Residential Shipping?

Below is a table detailing the differences between commercial and residential shipping services.


Commercial Shipping

Residential Shipping


Businesses and Customers

Individual Customers

Package Size

Often Large and Bulk Shipments

Smaller, Individual Packages

Delivery Address

Business Addresses or Warehouses

Residential Addresses

Shipping Purpose

Business-to-Business (B2B) or Business-to-Customer (B2C)

Personal Use or Consumption

Shipping Volume

High Volume and Bulk Shipments

Lower Volume and Individual Shipments

Shipping Services

Specialized Freight, Supply Chain Management, Fulfillment Services, etc.

Standard Parcel Delivery Services

Frequency of Shipments

Frequent and Regular Shipments

Occasional and Non-Regular Shipments

Cost Factors

Negotiated Rates, Contract-Based Pricing

Distance, Weight, and Standard Pricing


How Shipsigma Can Help With Commercial Shipping Costs

ShipSigma is a leader in parcel shipping contract optimization. We have saved over 300 companies an average of 25.2% in shipping costs. Using AI and our proprietary processes, we help you save on commercial shipping without changing carriers or service levels. Contact us today and unlock significant cost savings for your business!

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