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Big Savings through Small Parcel Data Analysis

When it comes to Small Parcel shipping there are numerous ways in which you can reduce your overall cost while promoting an efficiency.  Some of the key areas to focus on that have aided in reduced costs for our clients are outlined below:

Zone Evaluation: If you are currently shipping to zone 4 or higher, have you thought about the possibility of setting up a separate point of distribution bringing you closer to your customers?  Zone 4 is any shipment traveling 301-600 miles.  This will bring your costs down on shipping and also get the package to your customer sooner.  Offsite 3rd party warehousing is more manageable given improved WMS, TMS, ERP, and SAP software, scanning abilities, RFID devices, and real-time reporting.  Wal-Mart, a leading in supply chain innovation has distribution centers throughout the US strategically placed to be closer to their online customer base.

Weight Evaluation: Take a good look at your weight characteristics.  Through this analysis determine what percent of packages fall between one and five pounds, six to twenty pounds, twenty one to fifty pounds, fifty one to one hundred fifty pounds, etc.  Depending on your contract with the carrier you may have competitive rates for lower weight brackets, but not nearly as competitive in higher brackets.  If you use a small parcel carrier for 150 lbs and over you could be paying a premium, whereas these heavier shipments could move via LTL at a much lower rate.

Declared Value Evaluation: Do you have a company wide policy in place when sending packages with values over $100?  By checking the declared value box, you are authorizing the carrier to bill you for additional insurance coverage.  Alternatively, if you receive packages inbound and billed to you it is easy to check the declared value box when your not paying the bill.  Closely monitor these packages.  Published rates for the carriers' are currently $0.85 per $100 DV with a minimum of $2.55.  This is considerably higher than third party insurance providers.

Dim-Weight Evaluation: Determine what percentage of shipments are being billed at dimensional weight versus actual weight.  If you are sending bulky items that have a higher volume then weight such as pillows, you are experiencing a higher billed weight due to the size of your package.  Look at the way your shipments are packaged and negotiate your small parcel contract for a customized dim weight factor.  UPS and FedEx both provide package engineering services that can reduce the physical side of your packages without compromising strength and integrity.

Service Level Evaluation: Looking at the statistics of your service levels against ship from and ship to addresses can save you a lot of money if you are sending packages via express versus ground when sending by ground can still meet date commitments and customer expectations.  Accessorial charges including fuel, address corrections and delivery area surcharges are higher with express shipments versus ground as well.  Consolidation air freight forwarders could save as much as half off your shipping expenses if you are using small parcel carriers for air express freight just to save a day.

Naturally, these are not the only things to look for when evaluating your small parcel data, but can offer significant savings to your transportation spend.  Ship Watchers employees a diverse team of professionals that can assist in finding further savings to your bottom-line.

24/7 Support including Chat is available at http://support.myshipwatcher.com or feel free to reach us via email at oncall@shipwatchers.com with questions and comments or to inquire on our services further. 



 
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  1. Ethan B.

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