March 27, 2025

How Do Shipping Labels Work? A Detailed Guide

In this article, we’ll cover the importance of shipping labels, what information they contain, how to create them, and how partnering with a third-party logistics (3PL) provider like Daguer Logistics can simplify the shipping process for your e-commerce business.

Introduction

Shipping labels may seem like a minor detail in e-commerce logistics, but they play a crucial role in ensuring accurate, timely, and efficient deliveries. Without proper shipping labels, orders can be misrouted, lost, or delayed, leading to dissatisfied customers and potential revenue loss for businesses.

What is a Shipping Label?

A shipping label is a piece of documentation affixed to a package that provides key details about the shipment, including the destination, origin, carrier information, and handling instructions. Shipping labels help logistics providers and shipping carriers track, sort, and deliver parcels accurately and efficiently.

Shipping labels vary based on the carrier (e.g., USPS, FedEx, UPS, DHL), but they all contain similar core information that enables smooth delivery operations.

Why Are Shipping Labels Important?

Shipping labels are vital because they ensure that packages reach the right destination while enabling tracking at every stage of the delivery process. A well-labeled shipment helps businesses:

· Reduce delivery errors by ensuring accurate recipient information.

· Minimize transit delays caused by incorrect or incomplete address details.

· Enhance customer experience through real-time tracking updates.

· Maintain supply chain efficiency by facilitating quick sorting and routing.

Without a properly formatted and placed shipping label, a package may face misrouting, additional transit time, or even complete loss.

 

 

Understanding Shipping Labels

A shipping label consists of several key components, each serving a crucial function in the shipping process. Below is a breakdown of the typical elements found on a shipping label:

1. Recipient Name and Address

· Specifies the name, street address, city, postal code, and country of the recipient.

· A contact phone number may also be included for carrier communication.

2. Sender (Return) Address

· Identifies the original shipper in case the package needs to be returned.

· Helps maintain brand identity and reassures customers about the sender’s authenticity 

3. Tracking Number and Barcode

· A unique tracking number allows the package to be monitored in transit.

· Barcodes are scanned at different checkpoints for automated tracking.

4. Carrier Information

· Displays the carrier handling the shipment (e.g., UPS, FedEx, DHL, USPS).

· Includes service type (e.g., Standard, Expedited, Overnight).

5. Package Weight and Dimensions

· Carriers use this information to calculate shipping rates.

· Ensures efficient space utilization on transportation vehicles.

6. Shipping Method

· Indicates how fast the package should be delivered (e.g., Ground, Air, Express).

· Helps logistics teams prioritize shipments based on urgency.

7. Payment Status

· Shows whether shipping fees have been prepaid or need to be collected.

· For example, labels may indicate “P/P” (prepaid) or “C.O.D.” (collect on delivery).

How to Create a Shipping Label

For e-commerce businesses managing order fulfillment in-house, creating shipping labels manually can be a time-consuming task. Fortunately, there are several ways to generate shipping labels efficiently:

1. Using Carrier Websites

Most major carriers allow businesses to create and print shipping labels through their online portals:

· USPS Click-N-Ship

· FedEx Ship Manager

· UPS WorldShip

· DHL Express Label Creation

These platforms provide easy templates where businesses can enter shipment details, pay for postage, and print labels instantly. 

2. Using Shipping Label Templates

There are many free shipping label templates available online. Shopify, for example, provides a free shipping label generator, allowing businesses to enter shipment details and instantly generate a formatted label for printing.

3. Using Shipping Software

E-commerce businesses shipping high volumes of orders can streamline label generation with dedicated shipping software, such as:

· DAGUER LOGISTICS SYSTEM

· SHIPSTATION

· ORDORO

These tools integrate with major carriers and e-commerce platforms to automate label creation, order tracking, and rate comparisons.

4. Partnering with a 3PL Provider

For businesses seeking to completely outsource fulfillment and shipping, partnering with a third-party logistics provider (3PL) like Daguer Logistics eliminates the hassle of managing shipping labels manually.

Daguer Logistics automates shipping label generation, ensuring accurate, on-time deliveries while offering businesses discounted shipping rates through carrier partnerships.

Shipping Label Best Practices

To ensure seamless delivery, businesses should follow these best practices when creating shipping labels:

1. Ensure Accuracy

· Double-check recipient details, postal codes, and package weights before printing labels.

· Incorrect shipping information can result in misdelivery and additional shipping costs.

2. Secure Label Placement

· Affix the label to a flat, smooth surface on the package to prevent smudging or peeling.

· Avoid placing labels over seams or tape that could cause scanning issues.

3. Use High-Quality Printing

· Print labels using thermal printers or high-resolution inkjet/laser printers.

· Smudged or faded barcodes can lead to tracking errors and delivery delays.

4. Include Special Handling Instructions

· If the package contains fragile or perishable items, ensure proper handling instructions are clearly visible.

5. Keep Labels Consistent

· If using multiple carriers, try to standardize label formatting for consistency.

· Many 3PL providers, like Daguer Logistics, help businesses streamline label formatting across carriers.

How Daguer Logistics Simplifies Shipping Labels for E-Commerce Businesses

1. Automated Label Generation

Daguer Logistics integrates with major e-commerce platforms to automatically generate and print shipping labels as soon as an order is placed.

2. Multi-Carrier Shipping Solutions

With partnerships across DHL, UPS, FedEx, and USPS, Daguer Logistics offers flexible and cost-effective shipping options.

3. Discounted Shipping Rates

By leveraging bulk shipping, businesses benefit from discounted carrier rates that lower shipping costs.

4. Real-Time Tracking and Inventory Visibility

With our warehouse management system (WMS), businesses can monitor shipment tracking and inventory levels in real-time.

5. End-to-End Fulfillment Services

From picking and packing to last-mile delivery, Daguer Logistics ensures efficient, seamless order fulfillment.

Conclusion

Shipping labels are a crucial part of e-commerce logistics, ensuring packages are delivered accurately and on time. By following best practices, using automation tools, and partnering with a reliable 3PL like Daguer Logistics, businesses can optimize their shipping operations and enhance customer satisfaction. 

Frequently Asked Questions (FAQs)

1. Can I create a shipping label without an account with a carrier?

Yes, some carriers allow guest users to generate shipping labels, but having an account offers better tracking and cost-saving benefits.

2. How much do shipping labels cost?

Shipping label costs vary by package size, weight, destination, and shipping method. Partnering with a 3PL like Daguer Logistics can help secure discounted rates.

3. Do I need a special printer for shipping labels?

While standard printers can work, thermal label printers (like those from Zebra or Rollo) produce high-quality labels without ink smudging.

4. Can a 3PL handle international shipping labels?

Yes! Daguer Logistics manages international shipments, handling customs documentation, duties, and compliance requirements for global fulfillment.

5. What happens if a shipping label is incorrect?

If a label contains errors, the package may be delayed or returned. Always verify recipient information before printing labels or rely on an automated fulfillment provider like Daguer Logistics to minimize mistakes.

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