Top 3 Considerations for Driving Down Parcel Shipping Costs
Every year, companies spend massive amounts of money on parcel shipping with carriers like UPS® and FedEx®. But where does that money actually go? In some cases, it’s easy to determine the causes that contribute to an over-inflated parcel budget. Overcharges, late deliveries, and other mistakes can factor into any discussion about missed opportunities to reduce a parcel budget. But what often gets missed is the very specific combination of contributing factors that go unnoticed.
Like an iceberg, the most critical and overlooked part of your parcel spend is often what is underneath the surface—the hidden, unnoticed fees, surcharges, and concessions that often go unnoticed. In our latest e-book, The Cold Hard Truth: In Parcel Shipping, What You Don’t Know Can Hurt You we outline the three most important considerations for companies attempting to manage and optimize their parcel spend for maximum return:
FedEx Reports Record Peak Season VolumeIn its fiscal third quarter earnings report released March 21, FedEx announced record volume during its post-Thanksgiving peak. The quarter, which closed Feb. 28 and included December and January, encompassed most of that peak holiday season.
- Surcharges & Accessorials: Like many industries, parcel carriers have figured out the power of hidden fees. While hidden fees look different in every industry, in parcel shipping, they come in the form of surcharges and accessorials. A whopping 31% of a carrier’s invoice is made up of additional fees and surcharges. While they can’t be avoided entirely, they can be managed and reduced if you enter into parcel contract negotiations fully prepared, measure and manage the impact, and implement operational changes.
- Parcel Data Benchmarking: Logistics professionals cannot enter into parcel contract negotiations fully informed unless they have done the research. Like in real estate or any other industry, it is most effective to negotiate using knowledge gleaned from comparable data. Unfortunately, though, comparable data is not as readily available within the parcel shipping industry. A parcel contract has hundreds of negotiable attributes that impact overall parcel spends. Benchmarking data levels the playing field by allowing parcel shippers to “pull the comps” on their carrier.
- Parcel Auditing: While a parcel audit is only the first step towards greater “parcel health,” it’s an important one. Yes, it is important for parcel shippers to consider what is under the surface, but they also have to make sure not to run smack dab into the tip of the iceberg right in front of them—the part they can see. A parcel audit helps parcel shippers avoid budgetary disasters by identifying the overcharges, carrier mistakes, and late deliveries that, left unchecked, drive up parcel spends and represent thousands of dollars in missed refund opportunities.
Parcel shippers attempting to manage and reduce their overall parcel spend must consider these three critical issues and keep them at the forefront of their decisions. The full e-book offers more information about these challenges and how they can be used to drive down shipping costs.
How much could you be putting back in your pockets? Get The Cold Hard Truth about parcel shipping today by downloading the FREE e-book from VeriShip!