In my last column, I talked about how to effectively deal with end of year shipping demands. Office shippers may not have huge holiday sending output, but the massive volume carriers face impacts everyone’s service. I suggested the answer was to ship like a pro — to ship like the big shippers do, using a multicarrier data system that compares carrier service levels, costs, tracking capabilities, and other criteria.
These systems were once costly, but now cloud-based solutions are available to businesses of all sizes, making multicarrier data comparison affordable and easily accessible for lower volume shippers. These are SaaS (software as a service) based, so there’s no big upfront cost. You pay only for the service you want, and you don’t need IT support, since all data and functions reside in the cloud, not on your server. And just like a big shipper, you can get a unified view of all shipping data — enabling you to make the right carrier decision based on your specific needs.
This will be more important than ever in 2017 because not making the right carrier decision could cost you big, as you face continued increases in:
· Customer expectations
· Shipping volumes
· Carrier rates
· Overall complexity
Let’s look at these issues.
I CAN’T GET THAT OVERNIGHT?
The competition among online marketers is more intense than ever, plus they still compete with brick and mortar merchants who can offer customers instant gratification with no shipping charges. This has driven Internet retailers to offer low cost and/or no cost shipping, and accelerated delivery times.
Office shippers aren’t in the retail business, but they often have urgent documents, samples, lab results, etc. that need to be sent to their clients and prospects. In the age of Amazon, expectations have been raised for expedited shipping at low to no cost. Not meeting those expectations can lead to a disappointing customer experience.
At the same time, businesses are grappling with managing a growing number of parcels. Our most recent Parcel Shipping Index predicts that the volume of parcels (flats and packages up to 70 lbs.) will grow by 20% by 2018. For office senders, the choice of carrier will be key to keeping costs under control, while providing the delivery times customers expect.
HIGHER COSTS, HIGHER COMPLEXITY
Now let’s look at some of the recent rate changes by the three major carriers. In general, costs continue to rise, but there are some significant opportunities for discounts. Of course, this makes comparing carriers’ rates and discounts far more complex and even more important to your bottom line.
The U.S. Postal Service’ (USPS) new pricing went into effect on January 22 of this year. First-Class mail up to one ounce has increased two cents. But the discount for metered mail goes from a half cent to three cents, a meaningful six percent saving for meter users. With this new discount, the cost for metered mail went down by half a cent compared to the old pricing structure. There are also price drops for presorted mail, and Commercial Letters can be sent for the same price up to 3.5 ounces instead of up to two ounces, allowing you to add more inserts without paying more postage. And with the USPS’ improved tracking capabilities, you get tracking that is now competitive with private carriers. Packages are scanned at every point in the process, so you know where a piece is at any time. You can find out more information at http://www.pitneybowes.com/us/postal-information/rate-change-info.html.
UPS rates were changed back on November 18, 2016. Dimensional surcharges are now applied when the longest side exceeds 48 inches instead of 60 inches, and as of January 8, 2017, dimensional weight calculations are revised higher. Starting February 6, the US fuel surcharge will be adjusted weekly. However, UPS now offers an excellent tracking service that notifies recipients of deliveries scheduled for their address with an email or text message. This saves the sender from having to ask the recipient for an email address or cell phone number. It’s an example of how choosing the right carrier could be about choosing the right service, rather than the lowest cost. You’ll see more information at http://rates.ups.com/surcharges.html.
FedEx increased rates on all its service brands this year, beginning January 2. They changed shipping fees and surcharges, as well as their FedEx Retail Rates and FedEx One Rate pricing. Dimensional weight calculations for certain services are also new. And as of February 6, the fuel charge percentage will be adjusted weekly. FedEx offers a wide range of service options with many pricing variations. You can review all this complexity yourself at http://www.fedex.com/us/shipping-rates/.
Higher customer expectations, higher volumes, higher rates, and higher complexity underscore the need for you to send like a pro in 2017. Happily, new multicarrier solutions are more affordable than ever and can help you make more intelligent sending decisions, without putting all your eggs in one carrier’s basket. For 2017, that’s a really important development.
CHRIS GILES is Vice President, Global Product Management, Pitney Bowes.