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Aug. 8 2006 04:59 PM

As most businesses face economic pressure in these uncertain times, the need to improve financial performance is putting increasing pressure on management to review operating expenses in search of savings opportunities. Firms with large postage and shipping budgets are now rethinking their shipping methodologies and developing new platforms to achieve savings and shave significant costs out of their operations.


The Challenge

Within a competitive marketplace, large-volume mailers and shippers across all industries are faced with a continuing challenge to control costs and meet deadlines without sacrificing quality or service. These shippers and mailers have been following the same distribution models for years because there have been relatively few changes within the industry to challenge the status quo. When the coffers are filled with cash and businesses are growing, there is no reason to question the elements of your distribution model or search for better and more creative ways to operate and provide enhanced value to your customers.


A new breed of logistics companies is now challenging the status quo. The advent of new services from private enterprise companies has spurred smart enterprises to sub-contract time-sensitive mail services, allowing them to focus resources on their core business while enjoying cost and service benefits derived through alternative mail solutions. This decision also has managers rethinking all aspects of distribution including packaging, transit time, tracking, shipping frequency, account-ability, quality and cost.


Take, for example, private mail expeditors that have work-share arrangements with the U.S. Postal Service who can now pass along significant discounts to your organization on First-Class and Priority Mail. As the Postal Service continues its focus to manage costs and raise revenues, its work-share partners offer you the lower costs and flexibility you need. They specialize in delivering flat-sized mail and lightweight parcels, and they use the Postal Service to deliver these packages the final mile to your doorstep.


How it Works

The expeditor collects, meters and sorts pre-packaged and addressed mail and injects the mail/packages deep into the postal stream for final mile delivery by the Postal Service. The Postal Service benefits by letting someone else handle the high cost of front-end processing and long-haul delivery while it concentrates on local delivery. The expeditor receives significant volume discounts in return for handling the majority of work associated with moving the mail, and savings are then passed along to the customer. For example, a company mailing 10,000 pieces weighing 13 ounces would spend $38,500 on First Class mail. Mailing the same 10,000 pieces through a typical expeditor would cost only $31,800 saving the company $6,700 or more in postage alone.


What to Consider When Choosing

When choosing a mailing or shipping partner, evaluate your companys needs. There are solutions for a multitude of challenges companies face. Make sure the expeditor you choose can address them effectively. A few things to consider are:


Time-sensitive mail Delivery point barcodes give companies a leg up when timely delivery is critical.


Address verification One of the many hidden costs of mailing is maintaining an accurate database. Inaccurate addresses not only delay mail but also result in undeliverable mail leading to wasted postage and materials and lost customers. Look for a real-time system versus a batch system for address verification on every piece you ship. Check to see if you are provided with a detailed report to help keep your database updated after your mail has been processed. Ask how often they update their verification software with changes from the Postal Service since frequent re-zoning occurs in rapidly developing areas.


Proof of processing Often companies have no idea what happens to a package once it leaves their hands, but expeditors can provide accurate tracking and reporting for critical business decisions.


Package appearance Presentation is important. Expedited mail requires less handling, therefore preserving the appearance and condition of the piece.


Security Consider the value of your shipment when selecting a partner. If your items are of monetary value (pharmaceuticals, film, CDs, books, etc.) or carry high intrinsic value (a new account sign-up kit), you may want to make sure that your partner can demonstrate 100% accountability of every single package from receipt to processing to manifesting and shipping. You may want to see if your partner even secures your products in cages while they are waiting to be processed to avoid theft. Look for security cameras on receiving docks and in package handling areas as well.


Proximity Make sure the expeditors processing location is relatively close to where you are located. If it is more than two to three hours from your facility, it may be difficult to meet your delivery time commitments due to the critical nature of cutoff times in the Postal Service for mail entry.


Volume Without enough packages going to a given ZIP Code every day (there are 44,000 + ZIP Codes in the US!), these partners cannot obtain significant postal discounts and in turn may not pass those discounts along to you. Also, they may be forced to hold your packages for days until they have significant volume in a particular ZIP Code to obtain the Postal Service discounts.


How to Choose

Beyond the usual bidding and presentation, there are a few other steps companies can take when choosing a mail partner.


1. Visit the actual facility, and take into consideration cleanliness, building security, internal mail security and facility organization.


2.  Request a real-time demonstration of the expeditors software and physical processing capabilities. Bring some actual pieces of your mail/packages, and watch it run through the system.


3. Speak to current customers who can discuss their experiences with the expeditor.


4. Understand the delivery testing process and your vendors purpose and experience with testing. There is an inherent danger when businesses attempt to conduct their own tests before fully committing to a new delivery partner. All testing is not performed the same way or with the same frequency, auditing control or sample size. Often times, the sample size is too small or the delivery areas are not comprehensive enough to represent true delivery performance. Businesses should choose an expeditor that conducts extensive national delivery testing and continues to improve its delivery times.


An expedited mail partner provides businesses with cost and productivity savings as well as other value-added services that offer quantifiable R.O.I. Direct marketers have been among the first to take advantage of emerging mail service technology, but companies in industries like retail, entertainment and recruiting can reap tremendous time and cost savings over the long haul.


Jim Martell is president and CEO of SmartMail Services, LLC based in Atlanta, Georgia. For more information, visit or call 800-272-1070.