While it may not seem so, parcel shipping can be a complicated, time consuming, and often costly operation for many businesses. Substandard planning can result in over payment and lost sales if the company can’t provide consistent and cost-effective delivery to its customers.
Just as you’re the expert in your industry, parcel contract negotiators are experts in theirs. Parcel agreements are complicated and riddled with legalese. Even the most well-versed CFO will struggle trying to understand parcel carrier rate structures and line items. At best, the contract will be understandable, but the CFO still won’t know whether the rate they’re being offered is the best rate available.
One of the most common and biggest mistakes companies make when reviewing their parcel carrier agreement is doing it a few days before it’s up for renewal. In reality, the parcel carrier agreement conversation should be happening on a quarterly or semi-annual basis. The carriers aren’t going to be checking for mistakes they’ve made on their own. It’s up to the client to keep the carrier in check. Clients can achieve this by:
Tracking and Analyzing Spending
If your shipping software isn’t capable of tracking parcel shipping trends and errors, consider a third-party service who can. You can now monitor department shipping activities using a system that not only tracks spending, but also captures and tracks what carriers, level of service and special services your departments are using. This saves money by enabling you to quickly identify and correct bad shipping habits as well as recover funds owed back from the carrier.
Identifying Areas for Savings
All shipments that can be delivered in the same time frame with a less costly method should be identified. For example, shipping a package using a ground service rather than an overnight service (when guaranteed delivery is not required) is an obvious example. There is a wide variety of shipping software products to assist you with re-engineering your processes while enabling you to capture the maximum savings available.
Packing to Save Money
Be sure you understand proper packaging techniques to reduce damage to contents. For example, use double wall boxes for heavier items or place small packages inside a larger box. Individually wrap items with cushioning material and center them in cartons away from other items and away from the sides, corners, top and bottom. Do not substitute “Fragile” and “Handle with Care” labels for careful packing techniques. Some shippers have turned their cost center into a profit center by substituting purchased boxes with free carrier-provided boxes, including flat rate boxes.
Bad addresses can cause a myriad of issues including delays, returns, billing issues and lost business. Use address correction software either at the order entry point or at the shipping station.
Slash spending on all your carriers. Since shipping functions typically fall under the jurisdiction of the shipping manager, opportunities abound for saving money. Securing systems that enforce business rules, committing to a comparison of multiple carriers and tracking shipment delivery times for potential refunds can often produce truly astronomical savings.
Amware’s ParcelRate software platform uses shipping and parcel carrier contract KPI’s to show you your company’s actual data. You’ll quickly be able to see what you’re spending and losing in parcel cost. Some companies who are utilizing the ParcelRate platform are realizing both short and long-term savings in the tens of thousands and even millions.
Click here to download the free ParcelRate Guide and see what this powerful platform can actually do. Pricing information is also included in the guide.