With Internet sales on the rise, more shippers of jewelry, gold coins, watches, electronics and expensive fashion are filling b-to-c orders. This means more parcels, lower declared values, demand for lower shipping costs and deliveries to all consumer addresses nationwide. To recover in today’s economy, big carriers want denser freight, higher per-parcel values, higher shipping charges and deliveries to commercial addresses. What the market wants and what the carriers want are at direct odds. In the end, the market always wins. The question is, how do you win? Take the following suggestions and implement them, if possible, into your shipping operations, and you’re sure to see some savings.
Use GOOD Third-Party Insurance
Most carriers are charging $0.75 per $100 parcel insurance in 2011. They also have a minimum charge of $2.25. Some carriers don’t even call it “insurance.” They call it Declared Value Coverage. Why? Because, unlike real insurance, it covers only what the carrier Service Guide says it covers.
If you ship something that the Service Guide prohibits, you can pay for Declared Value Coverage, and the carrier will take your money – sometimes for years – but if you file a claim, there’s no obligation to pay, because it’s not insurance, it’s Declared Value Coverage, and it only covers with the Service Guide allows.
Solution
You can pay much less for coverage through a third-party provider. But you should be sure that policy is sufficient. Ask the following questions:
• To see a current (not old) Certificate of Insurance.
• To see a summary of the warranties, exclusions and deductibles under the policy.
• To talk to the Insurance Broker that arranges the policy.
This is what you’re paying for. If your provider has a good policy, he’ll be proud to show you evidence of it. If he doesn’t, he’ll be slow to show it off. You need to be sure he has a provider that is a solid company whose reputation and financial status deservedly inspire confidence.
Declare by the Ounce
There’s no such thing as a one-pound box. There are 0.98 lb boxes and 1.02 lb boxes. But most carriers round the shipping weight up to the next pound.
Solution
The US Postal Services lets you declare parcel weight by the ounce. When it comes to high-value, lightweight goods, like bracelet clasps or earrings, sending a two-ounce mail parcel can save you major dollars over even a ground shipment with a commercial carrier. And to Zones 2-4, even First-Class Mail gets there overnight. Try ultra-light one-ounce bubble mailers (available from vendors like www.uline.com) to keep weight costs down.
Ask the $1 Million Question
I once watched an account rep try to persuade a jewelry company with 6,000 stores to use overnight AM service for all jewelry shipments for “security reasons.” Of course, carriers make more money on overnight air than on 2-day air.
The VP of Logistics of the jewelry giant brought out a huge computer print-out. He said, “At the start of last fiscal year, I told all my people to ask one question every time they shipped anything to anyone. The question was: ‘Is 2-Day OK?’
“Everyone screamed. They said the clients wouldn’t stand for it. The competition would kill us. But I told them: just ask. Guess what? Eighty percent of the time the answer was: ‘Sure.’ Now let me show you this computer print-out. I saved $1 million this year by asking that one, simple question.”
When you order something online and get the choice of “Overnight: $20 Shipping & Handling” or “3-5 Days, Free Shipping,” which do you usually choose?
Solution
Every time you ship anything to anyone, even valuable goods, ask, “Is 2-Day OK?” or “Is Ground OK?” You may even want to say: “2-Day is Free, but there’s a $10 surcharge for overnight. Which do you want?” Ten dollars might not entirely cover your overnight up-charge, but it may get a lot of recipients to agree that 2-Day is fine. You may not be a multi-million-dollar company, but in percentage terms, you’ll benefit in the same way the big guys do.
Worried that 2-Day is less secure than overnight air for high-value? I once conducted a statistical analysis of five million shipments of jewelry in the US. More losses occurred by overnight service than by 2-Day or Ground. More losses occurred on Wednesdays than over weekends. And double-boxing produced no fewer losses than not double-boxing. Why? Who knows? All I care about, when it comes to shipping losses, are statistics. Urban myths won’t save you a dime.
Choose the Appropriate Signature Option
Most carriers charge to obtain a signature upon delivery. This can cost $3.25 for a standard signature and $4.25 for an adult signature. This is a major source of revenue for carriers, but you don’t always need to pay for a signature. Most carriers always get a signature when delivering to a business, while they may leave a parcel on the porch when delivering to a residence.
And carriers don’t deliver from person to person but from address to address. Adult Signature doesn’t guarantee the signature of a specific adult – only some adult. If you ship to Barbra Streisand with “Adult Signature,” the adult signature you get may be her maid’s!
Solution
Use transportation management software that can automatically differentiate a residential address from a commercial one and permit Delivery Confirmation for insured parcels addressed to businesses. If you limit this to smaller amounts, e.g. $5,000 and below, you’ll save dramatically without compromising security in a statistically significant way.
Manage Return Shipments Economically
If you send out merchandise that may be returned, you might care about how fast it gets to your client – but do you care how fast it comes back? If not, why pay as much to get it back as you paid to get it there?
Solution
Use transportation management software that allows you to create Return Merchandise Authorization (RMA) packing slips with embedded codes that:
• Allow the return sender to generate labels online only when needed (using your pre-set code).
• Activate and bind the correct insurance amount automatically.
• Give you remote, online control to adjust insurance amounts up or down.
• Cause you to pay only when the label goes live for return shipping and insurance.
Track Your Packages Pro-Actively
If a parcel goes astray, the sooner you notice it and call the carrier to intervene, the more likely you will:
• Recover the parcel, and
• Avoid customer dissatisfaction.
Carriers have over 50 “exception codes” indicating that a parcel is going off the rails. To track pro-actively, you need to separate problem parcels from all the rest, by highest to lowest value, by relative, expected delivery date and real-time.
Solution
Use transportation management software that can track parcels from all the carriers you use on one, convenient, online, real-time dashboard. It must be able to sort by:
• Date range
• Value Range
• Delivered Status
• En Route Status
• Exception Status
• Expected Delivery Date
The system should compute the correct expected delivery regardless of whether the parcels are traveling overnight, 2-Day, 3-Day, ground or internationally and automatically measure exceptions against carrier expectations to give you (and your recipients) critical pre-alerts with embedded response options.
With a tool like this, you can ignore the vast majority of parcels that are on track and concentrate only on the few that need your immediate attention. Your losses and labor costs will go down and your customer satisfaction will go up.
Integrate Sales, Inventory, Accounting and Shipping Software
Some carriers give you “free” computer shipping systems. The problem is, you may end up with multiple systems and three times the labor. If you have to print information from your inventory system, type it into your shipping system, and then type the shipping cost and tracking number into your accounting software, your labor is costing you more than what the “free” system gets you.
Solution
Use transportation management software that integrates to your inventory and accounting software. You will pull data from your inventory into the shipping program and push the results back into your software – automatically. If you produce pick-tickets with barcoded labels, you can use barcode scanners to read pick-ticket bar codes and automatically produce a label from them. This will eliminate human error, save time and give far superior customer service.
Cut Last-Minute Stress with “Queued” Shipments
Most people ship at the last minute. They scramble in the fleeting moments before the daily deadline.
Some companies hire employees to manage shipping, not because they really need an employee for most of the working day, but because they need more hands on deck in the last few minutes of madness and they can’t hire someone qualified to work only part-time.
Think how much stress, labor, and money this costs. To some extent, this is unavoidable. But most of the problem can be overcome.
Solution
Use transportation management software that allows you to pre-define or “queue” or “park” shipments.
You may know by 11 AM that five shipments might go out at the end of the day. The right software will let you make the labels in the morning and “queue” or “park” them – you don’t buy them, you don’t pay for them, you just park them online.
At the end of the day, as each order is filled and taped shut, you go your online queue, choose the right label-in-waiting, make any last-minute changes, print, and go!
If you’re a one-person show, you will stress less. If you’re a two-person show, maybe you can now afford to be a one-person show and keep that second salary for your bottom line!
James Moseley is President/CEO, TransGuardian, Inc. Visit www.transguardian.com or email jim@transguardian.com for more information, or call (877)570-SHIP (7447).
Use GOOD Third-Party Insurance
Most carriers are charging $0.75 per $100 parcel insurance in 2011. They also have a minimum charge of $2.25. Some carriers don’t even call it “insurance.” They call it Declared Value Coverage. Why? Because, unlike real insurance, it covers only what the carrier Service Guide says it covers.
If you ship something that the Service Guide prohibits, you can pay for Declared Value Coverage, and the carrier will take your money – sometimes for years – but if you file a claim, there’s no obligation to pay, because it’s not insurance, it’s Declared Value Coverage, and it only covers with the Service Guide allows.
Solution
You can pay much less for coverage through a third-party provider. But you should be sure that policy is sufficient. Ask the following questions:
• To see a current (not old) Certificate of Insurance.
• To see a summary of the warranties, exclusions and deductibles under the policy.
• To talk to the Insurance Broker that arranges the policy.
This is what you’re paying for. If your provider has a good policy, he’ll be proud to show you evidence of it. If he doesn’t, he’ll be slow to show it off. You need to be sure he has a provider that is a solid company whose reputation and financial status deservedly inspire confidence.
Declare by the Ounce
There’s no such thing as a one-pound box. There are 0.98 lb boxes and 1.02 lb boxes. But most carriers round the shipping weight up to the next pound.
Solution
The US Postal Services lets you declare parcel weight by the ounce. When it comes to high-value, lightweight goods, like bracelet clasps or earrings, sending a two-ounce mail parcel can save you major dollars over even a ground shipment with a commercial carrier. And to Zones 2-4, even First-Class Mail gets there overnight. Try ultra-light one-ounce bubble mailers (available from vendors like www.uline.com) to keep weight costs down.
Ask the $1 Million Question
I once watched an account rep try to persuade a jewelry company with 6,000 stores to use overnight AM service for all jewelry shipments for “security reasons.” Of course, carriers make more money on overnight air than on 2-day air.
The VP of Logistics of the jewelry giant brought out a huge computer print-out. He said, “At the start of last fiscal year, I told all my people to ask one question every time they shipped anything to anyone. The question was: ‘Is 2-Day OK?’
“Everyone screamed. They said the clients wouldn’t stand for it. The competition would kill us. But I told them: just ask. Guess what? Eighty percent of the time the answer was: ‘Sure.’ Now let me show you this computer print-out. I saved $1 million this year by asking that one, simple question.”
When you order something online and get the choice of “Overnight: $20 Shipping & Handling” or “3-5 Days, Free Shipping,” which do you usually choose?
Solution
Every time you ship anything to anyone, even valuable goods, ask, “Is 2-Day OK?” or “Is Ground OK?” You may even want to say: “2-Day is Free, but there’s a $10 surcharge for overnight. Which do you want?” Ten dollars might not entirely cover your overnight up-charge, but it may get a lot of recipients to agree that 2-Day is fine. You may not be a multi-million-dollar company, but in percentage terms, you’ll benefit in the same way the big guys do.
Worried that 2-Day is less secure than overnight air for high-value? I once conducted a statistical analysis of five million shipments of jewelry in the US. More losses occurred by overnight service than by 2-Day or Ground. More losses occurred on Wednesdays than over weekends. And double-boxing produced no fewer losses than not double-boxing. Why? Who knows? All I care about, when it comes to shipping losses, are statistics. Urban myths won’t save you a dime.
Choose the Appropriate Signature Option
Most carriers charge to obtain a signature upon delivery. This can cost $3.25 for a standard signature and $4.25 for an adult signature. This is a major source of revenue for carriers, but you don’t always need to pay for a signature. Most carriers always get a signature when delivering to a business, while they may leave a parcel on the porch when delivering to a residence.
And carriers don’t deliver from person to person but from address to address. Adult Signature doesn’t guarantee the signature of a specific adult – only some adult. If you ship to Barbra Streisand with “Adult Signature,” the adult signature you get may be her maid’s!
Solution
Use transportation management software that can automatically differentiate a residential address from a commercial one and permit Delivery Confirmation for insured parcels addressed to businesses. If you limit this to smaller amounts, e.g. $5,000 and below, you’ll save dramatically without compromising security in a statistically significant way.
Manage Return Shipments Economically
If you send out merchandise that may be returned, you might care about how fast it gets to your client – but do you care how fast it comes back? If not, why pay as much to get it back as you paid to get it there?
Solution
Use transportation management software that allows you to create Return Merchandise Authorization (RMA) packing slips with embedded codes that:
• Allow the return sender to generate labels online only when needed (using your pre-set code).
• Activate and bind the correct insurance amount automatically.
• Give you remote, online control to adjust insurance amounts up or down.
• Cause you to pay only when the label goes live for return shipping and insurance.
Track Your Packages Pro-Actively
If a parcel goes astray, the sooner you notice it and call the carrier to intervene, the more likely you will:
• Recover the parcel, and
• Avoid customer dissatisfaction.
Carriers have over 50 “exception codes” indicating that a parcel is going off the rails. To track pro-actively, you need to separate problem parcels from all the rest, by highest to lowest value, by relative, expected delivery date and real-time.
Solution
Use transportation management software that can track parcels from all the carriers you use on one, convenient, online, real-time dashboard. It must be able to sort by:
• Date range
• Value Range
• Delivered Status
• En Route Status
• Exception Status
• Expected Delivery Date
The system should compute the correct expected delivery regardless of whether the parcels are traveling overnight, 2-Day, 3-Day, ground or internationally and automatically measure exceptions against carrier expectations to give you (and your recipients) critical pre-alerts with embedded response options.
With a tool like this, you can ignore the vast majority of parcels that are on track and concentrate only on the few that need your immediate attention. Your losses and labor costs will go down and your customer satisfaction will go up.
Integrate Sales, Inventory, Accounting and Shipping Software
Some carriers give you “free” computer shipping systems. The problem is, you may end up with multiple systems and three times the labor. If you have to print information from your inventory system, type it into your shipping system, and then type the shipping cost and tracking number into your accounting software, your labor is costing you more than what the “free” system gets you.
Solution
Use transportation management software that integrates to your inventory and accounting software. You will pull data from your inventory into the shipping program and push the results back into your software – automatically. If you produce pick-tickets with barcoded labels, you can use barcode scanners to read pick-ticket bar codes and automatically produce a label from them. This will eliminate human error, save time and give far superior customer service.
Cut Last-Minute Stress with “Queued” Shipments
Most people ship at the last minute. They scramble in the fleeting moments before the daily deadline.
Some companies hire employees to manage shipping, not because they really need an employee for most of the working day, but because they need more hands on deck in the last few minutes of madness and they can’t hire someone qualified to work only part-time.
Think how much stress, labor, and money this costs. To some extent, this is unavoidable. But most of the problem can be overcome.
Solution
Use transportation management software that allows you to pre-define or “queue” or “park” shipments.
You may know by 11 AM that five shipments might go out at the end of the day. The right software will let you make the labels in the morning and “queue” or “park” them – you don’t buy them, you don’t pay for them, you just park them online.
At the end of the day, as each order is filled and taped shut, you go your online queue, choose the right label-in-waiting, make any last-minute changes, print, and go!
If you’re a one-person show, you will stress less. If you’re a two-person show, maybe you can now afford to be a one-person show and keep that second salary for your bottom line!
James Moseley is President/CEO, TransGuardian, Inc. Visit www.transguardian.com or email jim@transguardian.com for more information, or call (877)570-SHIP (7447).
