5 Things You Didn’t Know You Don’t Know About Parcel Shipping

by | Sep 14, 2020

4 min read

SHARE POST:

There’s always something new to learn, isn’t there? Just yesterday, I learned that the drawer under your oven is actually for keeping food warm and not for holding pots and pans. Who knew?

There are a lot of “aha!” moments like that when I talk with shippers about the ins and outs of their operations. There’s so much going on in their businesses every day that they don’t often get a chance to consider what they might be missing.

We all get caught up in the day-to-day tasks that distract us from lurking issues. When it comes to your shipping, though, keeping your head in the sand can cost you big money. It’s important to find out what you might not know, like…

1) …when your carrier makes mistakes.
With millions of packages handled every day, your carrier is bound to mess up every now and then. But when they do, they owe you money back for it. Most shippers don’t have the time or the patience to audit UPS and FedEx invoices, combing through them to look for incorrect surcharges or fees. Though carriers continue to suspend service guarantees, surcharges that have been incorrectly applied can be a hit to your budget — so make sure that money goes back in your pocket.

2) …how much time you’re losing to inefficiencies — even tiny ones.
Every business has its time-sucking processes and often we’re so used to doing things that way that we don’t take the time to consider whether there’s a better, more efficient process. Take general ledger coding, for instance. You have to do it, but it takes a lot of time to do manually. Have you ever really considered exactly how much? Or carrier bill payment and account reconciliation — do they have to take so long? The next time you’re knee-deep in a tedious shipping-related task like creating reports, reviewing KPIs or modeling your shipping profile against rate changes, take a second to consider whether there’s another way or a solution that can help.

3) …if you’re paying more than other companies do for shipping.
“Hey, how much does your shipping cost you?” is not a question you probably feel comfortable calling up other shippers to ask. But how else are you supposed to know if what you’re paying is on par with other companies? Benchmarking shipping costs is extremely valuable to your carrier contract negotiation efforts — if you can dig up the right information.

Most shippers who try to benchmark shipping costs seek out industry surveys or consultants — both of which can be skewed by the sample or experience being used. Do the companies ship a similar volume to yours? Do they ship parcels of comparable weights and/or dimensions? It’s hard to tell. A better way is to work with an expert who has access to the data of thousands of companies (maybe even a team of experts with 1.3 million data points) so they can accurately judge your shipping rates against your real peers. Once you understand whether you’re overpaying compared to others like you, you’ll be able to sit down for your next negotiation with confidence.

4) …how your shipping costs are allocated.
Just as important as understanding if you’re paying too much is understanding why you pay so much. Where is all that money going? Residential or delivery area surcharges? DIM weight? You already have this information, but you’re probably going to have to dig for it. It’s in your carrier reports and invoices, but organizing, comparing and analyzing all that data is going to take a lot of time — time you probably don’t have. The right tool can help you understand and visualize your shipping spend (and why it’s so much) so you can work to reduce it.

5) …how to prepare for what’s coming next, like the 2021 GRI.
Sometimes you’re forced to react to what happens (like in a global pandemic), but others you need to be proactive and prepare for what’s coming (like with the carriers’ annual General Rate Increase announcement). We won’t know which specific carrier rates are rising for 2021 — or by how much — for a bit longer, but we can make some pretty good guesses and start to make decisions that will prevent a blown budget down the line.

Remember, whatever general increase the carriers announce in the coming months, you should not use that number to budget for next year’s shipping. Focus on the individual rate changes within the GRI that affect your business most to better predict your 2021 shipping spend. Knowing your own shipping data and profile will help you prepare for the GRI — and anything else 2021 brings.


Not knowing what you don’t know about your shipping can cost you big time if you’re not careful, so make 2021 the year you start diving into your data and understanding your shipping costs. You’ll be a better budgeter, a stronger negotiator, and a smarter shipper because of it.

Think you know everything about surcharges? If you’re not sure, check out our latest eBook, 5 Budget-Busting Surcharges & How to Lower Them. You’ll learn what they cost you and how to get them under control.

Topics: Additional Handling Surcharge, Contract Negotiation, Dimensional (DIM) Weight, Surcharges