This is a guest post from Brian Gibbs, president of Refund Retriever. Brian founded Refund Retriever in 2006 while running his first eBay based business and seeing the shortcomings of other shipment auditing companies. Refund Retriever’s primary focus is FedEx and UPS parcel invoice auditing. He has been featured in Forbes, Entrepreneur and other publications discussing parcel auditing, shipping, eCommerce and more.
There are many fine print details that factor into the total cost of shipping spend for businesses. However, UPS and FedEx are not anxious to share these details. Thus, they often get overlooked even from the most well-intended, budget-minded shippers.
Keeping this in mind, what can businesses do to better evaluate, understand and react in response to their shipping spend? To help, consider the following.
Shipping Analytics Tell the Story
Despite the best of intentions, savvy shippers simply cannot review the many details that come with their shipping spend. Thanks to modern technologies, automation, and data collection, these shippers can gain clarity to expenses they’re being charged for.
Introducing data in combination with automation is a smart way for shippers to reduce parcel spend while also helping to ease efforts along the way. A starting point for companies to take when aiming to do this include:
1. Review current services usage
From packaging to shipping labels to the cost of actual shipments, review all aspects that impact your shipping spend. Large volume FedEx and UPS shippers receive a discount on published daily rates.
What service discounts are actually being seen on each package you send? Many times the actual discount rate is lower than specified on a FedEx or UPS agreement. This could be due to a number of factors, especially the minimum net charge rule.
2. Reflect on past shipping history
A historical analysis will identify top strengths, weaknesses, opportunities and more within your shipping efforts. Ultimately, the data revealed from this will help bring clarity and improve future decisions that will need to be made.
To further analyze these details, Refund Retriever offers a free shipping report analysis here.
3. Identify all accessorial fees
FedEx and UPS have hundreds of additional fees and charges that can apply to each shipment leaving your facility. With these fees often calculating up to 30% of total shipping costs, businesses should easily be able to identify what these fees are and understand why they are being applied to your overall shipping spend.
4. Review damaged and lost packages
With this insight, shippers can be more proactive and reach out to their customers in the event of lost or damaged products.
Plus, this same intelligence can help you be more proactive and precise in future shipping efforts. The identification of frequently damaged shipments could reveal additional packing requirements or potentially untrained staff.
5. Evaluate UPS and FedEx carrier contracts regularly
Regular carrier agreement assessment will reveal pricing variations, discounts or lack of them and other fine-print details impacting shipping overhead. As Refund Retriever explains, “carrier contracts are difficult to understand and overly complicated on purpose.” With details about multiple pricing tiers with different discounts for different weights and zones, these contracts are undoubtedly complex yet just as equally important to understand.
Tip: Refund Retriever can provide the reports, analytics, and understanding to cut through these contracts and allow your business to achieve best in class shipping rates.
The items we suggested above can collectively bring more clarity, efficiency, and savings to shippers. Yet these results cannot happen without introducing automation to your shipping strategy. Automation can come in a variety of ways – but the key factor is to streamline parcel efforts while reducing parcel spend along the way with trusted resources.
Finally, remember that when it comes to operating a business, your profits are what will determine your success. When strategizing how to achieve a greater profit, prioritize the data generated from shipping to help you achieve this. When applying savvy shipping best-practices in combination with identifying the right inventory and using smart selling strategies, you will be on your way to selling success!