The only thing missing from recent prognosticator warnings about the new dimensional policies being implemented by UPS and FedEx in December is Vincent Price narrating. Is the din justified or simply a scare tactic? In actuality, the final result will be mixed. While the effect may be minimal for some, for others this is undoubtedly a chilling situation.
So what's the issue? UPS and FedEx will be implementing an extension of existing dimensional rules to apply to all shipments tendered to them, thereby charging their customers based on weight and how much room each package is going to take up in their vessels. While this makes sense from the perspective of a package delivery company, it will significantly raise costs for some shippers, especially those with larger/lightweight cartons. How do you know if your company is at risk of abnormally high increases, and what actions can be taken to contain it?
For realtors, it's location, location, location. For shippers, it's analyze, analyze, analyze. It's imperative to measure the effect of the increase before it occurs, or as soon as possible thereafter. The easy solution is to compare a month's worth of invoice data in 2014 to what it will cost in 2015. The biggest problem with this of course is that many companies do not have the data needed to complete this analysis since today they are not submitting package dimensions for all shipments tendered to these carriers. If that's the case with your company, the next best thing is to take the common sense approach.
If you ship plastic water bottles, popcorn or balloons, you're in for a real shock, and you should take immediate action. That's because your rates can increase 30% or more. If, however, your company ships metal bolts, books or pet rocks, you're going to fare better. In any case, you should take samples of shipments and evaluate the cost of them this year vs. next. It's tedious but well worth the effort. Get the facts; policy change information online is abundant and will help you with your analysis.
If the result sends shivers, here are seven steps you can take.
1. Request a postponement of the increase from your carrier until you have several months' worth of data.
2. Request your shipment dimensional data from the carrier. Since the dimensions of all packages are being captured along their conveyors, this information should be readily available.
3. Install a dimensional scale at one or more shipping stations. While these are costly devices, I advise you to not be penny wise and dollar foolish. Companies such as Cubiscan (www.cubiscan.com) and Express Cube (www.expresscube.com) have omnidirectional dim scales that integrate to most shipping execution software.
4. Optimize carton sizes. Eliminate waste/empty space and see costs decrease not just on freight but for materials as well. This is a great way to "Go Green" too. Google "Carton Optimization."
5. Reduce the number of carton sizes utilized (if possible) and enter the dimensions of each along with a unique identifier into your shipping software. Shipping operators can select the carton size by a quick scan or from a drop down menu.
6. The shipping system operator enters carton sizes manually at the shipping station. While this of course is the least desirable, it may be the only way to acquire the data you need.
7. Add dimensions to the item databases in your ERP/WMS/OMS. There's never been a more important time to do this, if you haven't already. This will also help with shopping cart S & H policies.
Speaking of shopping carts, the new dim rules make exposing accurate shipping rates more complicated than ever before. I recommend working with an expert to help ensure your policies and objectives are met. For those that offer free shipping this of course is less of an issue but nonetheless still important.
We are in the midst of an important industry paradigm: lower capacity, higher prices, fewer alternatives. The more equipped you are, the better off you'll be.
Consider also TME (transportation management execution) software, which is designed to help you ship better and reduce transportation costs. Google "multi-carrier shipping software;" companies that invest in this area tend to save double digits on transportation charges and gain a clear competitive advantage. If nothing else, having the right system in place will provide consistent and accurate information that you can use for analysis purposes now and in future and that will help your company grow. Taking these steps can turn a fright fest into a happy ending and silence the Voice of Dim.
So what's the issue? UPS and FedEx will be implementing an extension of existing dimensional rules to apply to all shipments tendered to them, thereby charging their customers based on weight and how much room each package is going to take up in their vessels. While this makes sense from the perspective of a package delivery company, it will significantly raise costs for some shippers, especially those with larger/lightweight cartons. How do you know if your company is at risk of abnormally high increases, and what actions can be taken to contain it?
For realtors, it's location, location, location. For shippers, it's analyze, analyze, analyze. It's imperative to measure the effect of the increase before it occurs, or as soon as possible thereafter. The easy solution is to compare a month's worth of invoice data in 2014 to what it will cost in 2015. The biggest problem with this of course is that many companies do not have the data needed to complete this analysis since today they are not submitting package dimensions for all shipments tendered to these carriers. If that's the case with your company, the next best thing is to take the common sense approach.
If you ship plastic water bottles, popcorn or balloons, you're in for a real shock, and you should take immediate action. That's because your rates can increase 30% or more. If, however, your company ships metal bolts, books or pet rocks, you're going to fare better. In any case, you should take samples of shipments and evaluate the cost of them this year vs. next. It's tedious but well worth the effort. Get the facts; policy change information online is abundant and will help you with your analysis.
If the result sends shivers, here are seven steps you can take.
1. Request a postponement of the increase from your carrier until you have several months' worth of data.
2. Request your shipment dimensional data from the carrier. Since the dimensions of all packages are being captured along their conveyors, this information should be readily available.
3. Install a dimensional scale at one or more shipping stations. While these are costly devices, I advise you to not be penny wise and dollar foolish. Companies such as Cubiscan (www.cubiscan.com) and Express Cube (www.expresscube.com) have omnidirectional dim scales that integrate to most shipping execution software.
4. Optimize carton sizes. Eliminate waste/empty space and see costs decrease not just on freight but for materials as well. This is a great way to "Go Green" too. Google "Carton Optimization."
5. Reduce the number of carton sizes utilized (if possible) and enter the dimensions of each along with a unique identifier into your shipping software. Shipping operators can select the carton size by a quick scan or from a drop down menu.
6. The shipping system operator enters carton sizes manually at the shipping station. While this of course is the least desirable, it may be the only way to acquire the data you need.
7. Add dimensions to the item databases in your ERP/WMS/OMS. There's never been a more important time to do this, if you haven't already. This will also help with shopping cart S & H policies.
Speaking of shopping carts, the new dim rules make exposing accurate shipping rates more complicated than ever before. I recommend working with an expert to help ensure your policies and objectives are met. For those that offer free shipping this of course is less of an issue but nonetheless still important.
We are in the midst of an important industry paradigm: lower capacity, higher prices, fewer alternatives. The more equipped you are, the better off you'll be.
Consider also TME (transportation management execution) software, which is designed to help you ship better and reduce transportation costs. Google "multi-carrier shipping software;" companies that invest in this area tend to save double digits on transportation charges and gain a clear competitive advantage. If nothing else, having the right system in place will provide consistent and accurate information that you can use for analysis purposes now and in future and that will help your company grow. Taking these steps can turn a fright fest into a happy ending and silence the Voice of Dim.
