In most organizations, employees and executives who don't work in the mail center have little knowledge of shipping with UPS, FedEx, DHL and the US Postal Service. They don't know what they don't know. Sadly, they pay more for shipping than necessary.
One of the frequent complaints I hear from managers of mailing operations is frustration over their inability to control the budget for shipping and mailing expenditures. They are often asked, especially in these economic times, to reduce costs; yet the people who make decisions about how to send an express envelope or choose the service level are not under their control. The consequence is that a company is overpaying for service it does need. A recent study of 500 companies conducted by ARC Advisory Group and PARCEL magazine found that nearly one-fifth of respondents with "poor" desktop shipping practices saw their costs rise by more than 20 percent. Does your organization follow best practices?
Most companies have a computerized system in their mail center that can determine the best carrier and service for sending an envelope or package. The problem is that office personnel make shipping decisions without consulting multi-carrier technology that would determine the best way. Typically, their decision is based on the perceived urgency or importance communicated by a manager or executive. Often, they are simply told to send the envelope the fastest way. Unfortunately, the fastest way is the most expensive and not always the best way. Most items shipped overnight are not even opened the same day they arrive! The difference in cost between next-day early morning service and 3 p.m. service can be three or four times higher.
So, how does a savvy company get a handle on shipping costs? The first step is to get a view of what is really happening. You can't change what you don't know about. One way to accomplish this is to get invoices from your carriers electronically and create a spreadsheet that summarizes your costs by service level. Another way is to hire a company to receive all mailing and shipping data from the carriers and provide you with reports. A third way is to implement technology that would be required for every user to process and track every item you are paying to ship before it leaves the building. This would include all carriers of mail, packages, express items, couriers, and truck shipments. If all the data is collected in one place, you have a view of what is really happening. Can you imagine your Chief Financial Officer trying to manage the company's finances without all the information?
After you have the data, you can perform an analysis to determine how much your organization could be wasting. If you are using a third party for collecting data, that company can help you. You can request that it rerate a month's worth of activity using different service levels or carriers. If that is not practical, you can do it yourself. It will take some time, but it is well worth it.
Begin by looking at your express costs and determining how much you spent on early morning delivery. Research the difference in cost between 8:30 a.m. delivery service, 10:30 service, and end of the day service. Look at the number of shipments that could have reached the recipients the next day with a less expensive service, even ground. You might even call a few of the recipients and find out when they opened express envelopes. Examine the weight of the envelopes and compare the costs of different carriers or couriers. See if you had multiple items going to the same address and figure out how much you could have saved if the items had been combined in one package. The ARC report found that 37.9% of users cut their mailing expenses by using less costly service options.
If your company is facing layoffs and facing pressure because of the economy, I urge you to take action. Now is the time to get on the soapbox and demonstrate how you can help your company slash its mailing and shipping costs.
I want to hear from you. Please feel free to send me your questions and suggestions to mark.taylor@myshippingcoach.com.
Mark Taylor, MBA, DLP, is the nation's leading authority on parcel shipping, with 32 years of experience consulting for thousands of organizations. He is a writer, speaker, business consultant, and entrepreneur. Taylor has been featured as the industry expert in the New York Times and has been interviewed on ABC News. He spent 13 years at Pitney Bowes, working with mail center managers on increasing productivity. The American Society of Transportation and Logistics has named Taylor a Distinguished Logistics Professional (DLP) in recognition of the contributions he has made to the field of logistics during his 30-year career.
One of the frequent complaints I hear from managers of mailing operations is frustration over their inability to control the budget for shipping and mailing expenditures. They are often asked, especially in these economic times, to reduce costs; yet the people who make decisions about how to send an express envelope or choose the service level are not under their control. The consequence is that a company is overpaying for service it does need. A recent study of 500 companies conducted by ARC Advisory Group and PARCEL magazine found that nearly one-fifth of respondents with "poor" desktop shipping practices saw their costs rise by more than 20 percent. Does your organization follow best practices?
Most companies have a computerized system in their mail center that can determine the best carrier and service for sending an envelope or package. The problem is that office personnel make shipping decisions without consulting multi-carrier technology that would determine the best way. Typically, their decision is based on the perceived urgency or importance communicated by a manager or executive. Often, they are simply told to send the envelope the fastest way. Unfortunately, the fastest way is the most expensive and not always the best way. Most items shipped overnight are not even opened the same day they arrive! The difference in cost between next-day early morning service and 3 p.m. service can be three or four times higher.
So, how does a savvy company get a handle on shipping costs? The first step is to get a view of what is really happening. You can't change what you don't know about. One way to accomplish this is to get invoices from your carriers electronically and create a spreadsheet that summarizes your costs by service level. Another way is to hire a company to receive all mailing and shipping data from the carriers and provide you with reports. A third way is to implement technology that would be required for every user to process and track every item you are paying to ship before it leaves the building. This would include all carriers of mail, packages, express items, couriers, and truck shipments. If all the data is collected in one place, you have a view of what is really happening. Can you imagine your Chief Financial Officer trying to manage the company's finances without all the information?
After you have the data, you can perform an analysis to determine how much your organization could be wasting. If you are using a third party for collecting data, that company can help you. You can request that it rerate a month's worth of activity using different service levels or carriers. If that is not practical, you can do it yourself. It will take some time, but it is well worth it.
Begin by looking at your express costs and determining how much you spent on early morning delivery. Research the difference in cost between 8:30 a.m. delivery service, 10:30 service, and end of the day service. Look at the number of shipments that could have reached the recipients the next day with a less expensive service, even ground. You might even call a few of the recipients and find out when they opened express envelopes. Examine the weight of the envelopes and compare the costs of different carriers or couriers. See if you had multiple items going to the same address and figure out how much you could have saved if the items had been combined in one package. The ARC report found that 37.9% of users cut their mailing expenses by using less costly service options.
If your company is facing layoffs and facing pressure because of the economy, I urge you to take action. Now is the time to get on the soapbox and demonstrate how you can help your company slash its mailing and shipping costs.
I want to hear from you. Please feel free to send me your questions and suggestions to mark.taylor@myshippingcoach.com.
Mark Taylor, MBA, DLP, is the nation's leading authority on parcel shipping, with 32 years of experience consulting for thousands of organizations. He is a writer, speaker, business consultant, and entrepreneur. Taylor has been featured as the industry expert in the New York Times and has been interviewed on ABC News. He spent 13 years at Pitney Bowes, working with mail center managers on increasing productivity. The American Society of Transportation and Logistics has named Taylor a Distinguished Logistics Professional (DLP) in recognition of the contributions he has made to the field of logistics during his 30-year career.
