One of the biggest concerns for any organization today is reducing expenses. An area of cost that is often overlooked is shipping. Many managers are frustrated by carrier price increases and feel hopeless in their ability to take any effective action. This article will share four strategies that large shipping operations can take to reduce their shipping costs that can also be utilized by small business.
Would you pay four times more to ship a package for convenience? If you're physically taking your packages to a carrier's shipping
A recent Wall Street Journal article stated that several large package carriers "... have acquired retail chains to take advantage of walk-in customers who typically pay a premium because they are too small to negotiate volume discounts," (Corey Dade, January 10, 2008). I was curious about how much of a premium. I walked into a major carrier's store and was told it would cost me $18.71 to ship a one pound package from
Even the U.S. Postal Service offers discounts like Free Delivery Confirmation on Priority Mail and discounts on international service when printing postage online at www.USPS.com. You don't see big companies shipping their packages in the carrier stores; they process their packages online and arrange for the carrier to pick up the package. If you are shipping with the USPS, you can even have the packages picked up for free.
According to "The 9th Annual PARCEL Best Practices Survey," conducted by Morgan Stanley and PARCEL Magazine, "58 % of high-volume shippers have multi-carrier shipping systems." On the other end of the spectrum, the majority of smaller shippers utilize carrier-supplied shipping systems, compared to only 10 % of the high-volume shippers. These survey results made me wonder, what do the high-volume shippers know that perhaps the low-volume shippers do not?
Large companies do not put all their eggs in one basket; they have multiple carriers, while most small shippers only have a single carrier. Why do the larger shippers buy multi-carrier shipping systems and the smaller shippers use systems that the carriers provide for them? The answer is that the carrier systems are free. While the carrier software does make it convenient to ship, it has an inherent drawback; it only works with that specific carrier. The carriers provide this software because they know that it will increase their volume and revenue because it is easier to use their software than to compare rates with another carrier manually. Yet, a system that only has one carrier is not going to present the most cost-efficient choices. This is what the big shippers know.
High-volume shippers have multi-carrier shipping sy
How much do you pay in accessorial add-on fees? "The 9th Annual PARCEL Be
If you integrate your invoicing and shipping, you can also have the shipping software return the freight charges and tracking numbers. Cu
Big shippers know that the U.S. Postal Service has some niches where the national carriers can't compete on price.
Priority Mail Flat Rate Box
The USPS has Priority Mail Flat Rate Boxes in which you can put any amount of weight for only $8.95. I have put as much as 14 pounds in this box. The same weight with another carrier would be twice as much.
The Priority Mail Flat Rate Box can also be used to ship internationally. The corrugated Flat Rate Box is similar to a shoe box (11" x 8-1/2" x 5-1/2"), and you can ship up to 20 pounds internationally for a fixed price. Priority Mail International Flat Rate Boxes cost $23 when shipped to
Very Light Weight Packages
If you ship packages that weigh less than 13 ounces, then you can receive the lowe
Media Mail: Books, DVDs, CDs
Media Mail is a service offered by the U.S. Po
Saturday Delivery is an option for which mo
If you ship packages to residences, USPS does not have an additional cost. Other carriers charge more because it is more costly for them to deliver to homes. Since the mail is delivered to every home, USPS doesn't bear that expense.
In summary, the big shippers know that comparing multiple carriers to find the best option helps cut costs and gives any business a competitive advantage. You should always use the variety of information available to pick the cheapest carrier, the fastest carrier, or a combination thereof, to best suit your needs for each and every package you send. Encourage your colleagues to do the same. The results will directly affect your company's bottom line.
Mark A. Taylor, DLP, is the Chief Logistics Officer of RedRoller and President of TAYLOR Systems Engineering Corporation. He was named a Distinguished Logistics Professional (DLP) by the American Society of Transportation & Logistics in recognition of his 30 years of contributions to the field of logistics.