6 Questions to Ask When You’re Looking for A Shipping Expense Optimization Service

by | Oct 7, 2020

5 min read

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You know something’s not right, but you can’t quite put your finger on it. Why are your shipping costs climbing? Is it surcharges? Dimensional weight? Your distribution network?

The truth is, it could be any of these, all of these, or something else entirely. 

Like the savvy shipper you are, you know that you’ve got bigger fish to fry than diving in to investigate this yourself, so you set out to find the right shipping expense optimization service to help you get where you want to be.

But now you have a whole new problem — how do you find the right one? How can you be sure you’re going to get on the right path to shipping savings?

By asking these 6 questions, you’ll know you’re starting to work with a service that’s going to guide you in the right direction.

 

1. What is your shipping problem in the first place?
Getting back to the beginning of this article, your biggest problem is likely that you’re paying too much, but you’re not sure why. You might have even had a discussion with your carrier about it, but they’re not financially motivated to help you spend less money. So while they might provide you with some data, it will probably be difficult to interpret and act on.

The right shipping expense optimization service will be able to look at your data and start to see issues and trends in your costs that reveal the real problems that are causing you to overspend on shipping. They’ll also be on top of the latest developments in the industry and help you make sure you’re proactively addressing challenges before they cost you too much.

The key to all of this is your data. The right service won’t use industry averages or general information to advise you. They’ll use your unique shipping profile — all your data about what you ship, how you ship it, where you ship to and from, and much more — because it’s crucial to the actions you take and the plans you put in place.

 

2. How will the service analyze your data?
Make sure any shipping expense optimization service you deal with is ready to not just gather and organize your data for you to deal with but analyze it for you and provide specific KPIs that matter to your business. Too many services simply take your data and spit it back in a different format, leaving the heavy lifting of understanding how to apply it to your business to you.

The right service will look at your data and help you separate the controllable costs — things you can address with a little operational tidying —  from uncontrollable costs. The latter is where the heavy analysis is needed, and understanding how to conquer those costs is the mark of true shipping expense optimization.

 

3. How will they model carrier rate changes and other scenarios?
Can the service you’re considering create models around possible situations to help you make the best decisions about how you operate? Carrier rate changes are inevitable — and these days, frequent — so being able to see how various changes will affect your shipping profile is important. Or maybe you’re considering a new distribution center. How will that change your shipping spend? Make sure your service is prepared to help you consider every angle of operational changes you might be thinking about.

 

4. Can they benchmark your data against other similar shippers?
It’s safe to say that I can’t run a mile as fast as one of my teenagers, but then again, I know that’s not really a fair comparison. The same holds true for your shipping spend.

To make sure you’re getting the best deal, you need to compare your rates and contract with other shippers — but you need to make sure it’s other shippers like you. If you sell pillows, you’re going to have different rates and different needs than a company that sells weighted blankets. You need to compare yourself with shippers of packages that are similar weights and have similar shipping volumes to yours. Then you can start to compare what you pay with what they do.

 

5. Will they alert you when something changes that will affect you?
Alerts that your cost per package has jumped sharply or that your residential surcharges are skyrocketing can save you big money and big headaches. You don’t want to wait for your invoices to arrive to know that you have a problem. A service that offers alerts to changes in your shipping can save you time and money.

 

6. What is their commitment to customer service?
Are they there to simply direct you on how to use their tool, or do they offer expert insights and advice that take shipping expense optimization to the next level? You want a service that continually monitors your data and the industry and then proactively consults with you on it all.

Recent rate changes will affect shippers with higher volumes the most. And because you have a million other things to deal with every day, you might not be aware of when a change like that occurs or how it might affect you. Having experts who can help you understand these changes — and more importantly, what you need to do about them — will help you optimize your operations. 

 

See the forest and the trees at the same time

There are a lot of options for reducing your shipping expenses available to you, but finding the right one is daunting. In addition to asking the questions above, make sure you find one that can help you see both the proverbial forest and its trees by doing two things: looking at the big picture and going deep into your data simultaneously.

Seeing how all the aspects of your shipping interact and affect each other is just as important as helping you analyze every detail for maximum savings and efficiency. The right service will do both seamlessly to help you meet your customers’ shipping expectations while keeping your shipping spend in check.

 

There are five things most shippers don’t know they’re doing to hurt their shipping spend. Find out what they are in our white paper!

Topics: Data Science, Shipping Data, Shipping Profile