Every Fall, the major Parcel carriers typically announce new logic changes that will affect how much it’ll cost to use their shipping networks. In the past year, we’ve seen a pretty clear and unified message from these carriers, “if you want to ship big, heavy stuff through our networks, we’re going to charge you for it.” You can expect to see an increase of around 5% across the board on parcel shipping costs, so now is the ideal time to examine your parcel network and ensure you’re taking advantage of every savings opportunity available to you.
We’ve spoken in length about the importance of rate negotiations and some strategies for making it a successful process. On top of rate negotiation advice, AFS can analyze your shipping procedures and identify other areas for cost savings. Shipping a product seems simple, right? You produce or sell a product, put said product in a box, take it to the nearest Post Office, UPS or FedEx location and pay them to get it to the customer. You trust they’re both charging you fairly and are going to deliver your product safely and timely. Believe it or not, there are plenty of opportunities for savings, if you take the time to find them.
By utilizing decades of parcel shipping expertise and data from managing millions of dollars in clients’ transportation spend, AFS has identified the following as common areas for potential savings:
- Each time you ship something, you should look to see what exactly you’re paying for. Are there accessorial charges you’re on the hook for that may not be appropriate for your shipments? Are the charges accurate? Most people don’t associate the term “audit” with shipping spend, but it’s an important factor in determining the accuracy of your freight bills. As advanced as the shipping systems of the major carriers are, mistakes do happen and you may be paying for services you don’t use or need. It’s important to examine each shipping invoice/receipt with a fine-tooth comb to confirm their accuracy.
- Network Optimization. Even with access to competitive rates, if you aren’t shipping smart then you’re leaving money on the table. Things like shipping times, box size, product weight, carrier selection and delivery location can all affect the efficiency of your network, and ultimately, be costing you money. By weighing all of these factors, you can develop an optimized shipping process. Having access to a TMS can help you develop these processes as well as with the next two areas of cost savings.
- Spend Visibility. Optimizing your network is infinitely easier if you have visibility into what makes up your transportation spend. A freight bill audit should not only uncover errors and inconsistencies, but also provide access to personal shipping trends and other invaluable data that is specific to your shipping profile. Use this data to adjust your shipping procedures. Reevaluate them a few times a year to ensure optimization and create actionable strategies when needed.
- Spend Analytics. By creating transparency in your shipping spend, you’ll be able to quickly see “problem” areas that effect your business. Parcel carriers are adjusting their shipping policies and costs yearly, sometimes more frequently. So an optimization solution that worked last year may no longer be ideal. Analyzing your shipping spend and current shipping prices can allow you to adjust to be as cost-effective as possible. As long as you have the time to dedicate to this analysis, you’ll be able to ensure efficiency and not spend more than necessary.
Unfortunately, shipping is rarely a set-it-and-forget-it scenario. Because of volatility in gas prices, yearly general rate increases, customer expectations and more, your shipping procedures will need to consistently be adjusted. If all of the above seem overwhelming and daunting, AFS a team of parcel experts that can save you money by identifying all areas for cost-savings that apply to your business. By allowing our shipping experts to manage your parcel shipments, you’re freeing up your time to focus on what you do best. Give us a call at 877-242-3383 if you could benefit from lower shipping costs.