5 Factors You Can Control to Reduce Shipping Costs

by | Jul 22, 2020

4 min read

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Sometimes it feels like carriers are driving shipping costs and you’re just along for the ride, doesn’t it? Especially lately — service guarantees still haven’t returned and new surcharges are popping up.

Many shippers overlook factors that are well within their control — things you can do on your end to save. Tidying up your operations can save a little here and there to help you reduce shipping costs in big ways. 

 

Controllable shipping costs 

Take a look at these five areas to help reduce shipping costs.

 

  • Address Corrections 

    What to do: Review the address corrections that were made by your carrier on a weekly basis and update the records in your manifestation system.Why you should do it: The carriers will charge each time the address is corrected. If you’re shipping to the same address 5 times a month and getting charged $17 (the standard amount) each time, that really adds up. If you update the address in your shipping system, you can knock this cost out.

  • Declared ValueWhat to do: Review the packages that have a declared value surcharge. The carriers automatically provide $100 worth of liability for loss or damage. So, if the contents of the package shipped are not valued over $100, you’re paying an unnecessary fee. Work with your shipping department to find a way to flag shipments that are over $100 so that you can only pay this surcharge when it’s truly necessary. (Take note: If your package is worth more than $100 and you need to protect it, there’s a $300 coverage minimum — and you don’t get the first $100 for free.)

     

    Why you should do it: The cost for the declared value surcharge varies widely and can have a significant impact on your shipping spend.

  • Weekly Service Charge 

    What to do: Verify that all your accounts are being used. The service charge is something that both carriers charge to all accounts if you are on a regular pickup schedule. If you have a lot of accounts, you might not notice when some aren’t used regularly, or you might not realize you don’t need a daily pickup for a particular account.Why you should do it: Knowing how much and how often you’re shipping can help ensure the best set up for each account. For instance, the standard is $14.50 per week for daily pickups with a weekly shipping volume over $75. If you don’t ship every day, there are other options that have a lower weekly fee. It pays to understand your shipping schedule and right-size your pickup charges.

  • Signature RequiredWhat to do: Confirm whether you truly need Indirect Signature Required, Direct Signature Required or Adult Signature Required. The carriers already guarantee a proof-of-delivery scan. If you don’t truly need a signature confirmation (for legal reasons, for instance), this may be an unnecessary surcharge you’re incurring.

     

    Why you should do it: You might be able to avoid an unnecessary charge, of course. On top of that, during the current pandemic, carriers have temporarily suspended getting signatures (except when an adult signature is required), so you might even be paying for something you’re not getting. 

  • Late Payment Fee (UPS only)
    What to do: Monitor and identify when there are late payment fees. Determine if there is a particular account/location that’s continually late.

    Why you should do it: If one of your accounts or locations is always late, it makes sense to find out why. There could be an underlying operational or financial issue that needs to be fixed. And once you do, you’ll eliminate this fee.

 

Take control of shipping costs where you can

The carriers hold a lot of the cards, but when you work to tie up loose ends in your own operations, you’ll be able to reduce shipping costs. Knowledge is power. To take savings to the next level, you need to know everything you can about your own data. Once you’re working with the same numbers your carrier has access to, the playing field will feel even more level. 

 

Want even more control over surcharges? Our eBook, 5 Budget-Busting Surcharges & How to Lower Them covers more pesky surcharges and what you can do to reduce their impact on your bottom line.

Topics: Address Correction Surcharge, Declared Value, Late Payment Fee, Signature Required, Surcharges, Weekly Service Charge