on shipping costs
For companies that are shipping multiple packages each week, the cost of shipping can really start to eat away at your profits. With these seven tips, Parcel Savior can help you save BIG on your FedEx and UPS transportation costs.
Approximately 10% of all of FedEx and UPS express packages (any domestic shipment excluding Ground) are late by at least one minute. When FedEx and UPS are late, you are entitled to a full refund for that package. Those late shipments are never highlighted and are not automatically refunded to you.
The tedious process of filing those rate-adjustments can cause many companies to forego these cost-saving measures. In order to decrease your shipping costs and recoup the refunds for those late packages, put a small-package auditing system into place, such as Parcel Savior.
By comparing the volume of shipments that your company is sending out on a weekly basis with other companies of similar shipping habits, you can determine where your company lies on the spectrum of how competitive your earned discount is. Carriers never advertise how cheap their services can be for each customer depending on how much they are shipping from week to week.
With our shipping reports, you will receive a free spending analysis to determine what your earned discount is compared to other companies in order to make sure you are receiving the best possible rate from your carrier.
If you are shipping an envelope from Boston to Washington Next Day Air Saver, you are essentially paying for a service that you don’t even need.
For FedEx and UPS Ground shipments that are shipped within a Zone 2, those packages are already guaranteed to arrive by the end of the next day. That’s a difference between spending $9.08 and $25.06 for the same service!
On your next FedEx / UPS invoice you will see a credit for all of the refunds that have been earned.
Just because you ship an item that is 25 pounds, doesn’t mean that you are going to be billed 25 pounds. FedEx and UPS both utilize something that they call “dimensional weight” to calculate their billable weight. For UPS and FedEx, they use a “dimensional divisor” of 166 (effective January 2, 2017, FedEx will lower their dimensional divisor to 139; with UPS expecting to follow suit).
To calculate the dimensional weight of the package, the calculation is (length x width x height) / 166. So if a package actually weighs 25 pounds but is (20x20x15), the billable weight is now 36 pounds. If shipped Ground, that’s a difference between $23.94 and $32.54! In order to save money, either reduce the area of the package, OR calculate the dimensional weight of the package before billing your customer for the shipping.
For small businesses that haven’t received any discounts from their carrier yet, it might seem as if you can switch between FedEx and UPS in order to get the cheapest price for each shipment. The problem with this is that FedEx and UPS’ discounts are driven by volume. The more that you ship with one carrier, the more aggressively you will be able to save money with that carrier. If you are splitting up your volume with two or more carriers FedEx and UPS are going to look at your weekly spend as a lot lower that it may actually be, inhibiting your overall discount.
So in order to leverage your buying power to get the lowest price possible, choose one carrier that you have a great relationship with for your rep. Once this decision is made, ship all of your important packages through your chosen carrier.
As you get larger and have a competitive-in-your-industry shipping discount, it will begin to be a better idea to have your suppliers to ship on your account number. If they are already billing you for the transportation, have them use your account number to show FedEx or UPS that you are spending even MORE with them.
This will be another way to increase your buying power with that carrier in order to achieve an even higher earned discount rate with your carrier for the packages that you were already shipping.
(if you own multiple locations, put it on one account)
Many businesses may have various locations or departments that that all ship with a carrier. However, some of the businesses are (again) not utilizing their buying power and are instead shipping on various accounts ie a different account for each store location or even a different account for each different department. Even if each location or department is shipping with one carrier, FedEx and UPS will view each account as a living, breathing, separate account.
In order to increase the buying power for your business, consolidate all of your accounts into one in order to benefit the most from the aggressive discounts that your carrier may have to offer.
I didn’t even know this existed before Parcel Savior. Now we’re saving hundreds of dollars each week. Thank you!
I wish I signed up with them earlier. It’s like having a discount on top of my existing discount. I highly recommend them.
It’s really easy. I signed up several months ago and each week I see refunds back on my [FedEx] invoice. I don’t have to do anything extra. It’s a no-brainer.