If you’re not using technology to select service levels, you may be giving your parcel carriers free money. We regularly see shippers that use Next Day Air, Next Day Air Saver, Priority Overnight and/or Standard Overnight service to zip codes with a one-day Ground commitment. Likewise, we see shippers using 2nd Day Air/2Day or 3 Day Select/Express Saver to zip codes with two-day and 3-day Ground commitments respectively. 

Of course there may be legitimate reasons to up-service packages. Perhaps a package really does need to arrive in the consignees hands by 10:00 am the next morning. Or perhaps the package value requires declared values that necessitate Air service levels. Or possibly Saturday delivery is required (or Monday in the case of FHD). There could be any number of reasons. But all too often we find that the reason for selecting an air service level when Ground has the same time commitment is lack of training and/or poor systems controls. The result could be net charges up to ten times higher than the optimized charge (depending on your discount program). Training is important, and should be the first step. But implementing TMS/WMS capabilities that require supervisor approval to use a suboptimal service (based on transit time commitments) is the optimal solution to ensure the right balance between service and price.

Joe Wilkinson is Director of Transportation at enVista, a leading supply chain consulting and IT services firm, delivering innovative solutions that improve profitability, enhance customer service and reduce waste from source to consumption. For more information, visit www.envistacorp.com, or contact Joe directly at jwilkinson@envistacorp.com or 724-457-1869.