August 2021 - Audintel

Why incorporating GSR/MBG waiver in shipping contracts is a bad idea?

On-time delivery of shipments is vital for shippers. Late parcel deliveries test a customer’s patience. At times, customer dissatisfaction leads to financial loss. With this in mind, shippers have a refund clause in their shipping contracts with the shipping carriers. Shipping carriers promise a refund for service failures such as late deliveries.

Approved late delivery refund requests save 100% shipping costs. But, in the past few years, FedEx and UPS are offering shipping refund waivers with incentives. Large shipping carriers are aggressively vouching for refund waivers. So, what are these shipping refund waivers? And, why should shippers not accept such Guaranteed Service Refund waivers? Read on for all this and more, in this article.

What are shipping refund waivers?

Shipping carriers like FedEx and UPS offer shipping refund waivers. Shipping refund waivers are clauses within the shipping contracts that provide discounts to shippers. These discounts are in return for waiving off the shippers’ rights to claim refunds. FedEx’s refund waiver is known as Money-Back Guarantee (MBG) waiver. And UPS’ refund waiver is known as UPS’ Guaranteed Service Refund (GSR) waiver. In addition, UPS and FedEx aggressively market these waivers to shippers for earning extra revenue.

Incentives in exchange for GSR waiver

Often shipping carriers offer discounts and incentives in exchange for signing an agreement with Guaranteed Service Refund waiver. Shipping carriers who want GSR waivers entice shippers with attractive discounts during contract negotiations. The incentives include an additional package rate discount and small discounts in the accessorial charges for a short period. But, shippers generally don’t benefit much from these incentives, as there are other charges on the package.

Why should shippers not sign an agreement with UPS’ GSR or FedEx’s MBG waivers?

UPS’ GSR ensures the on-time delivery of all Ground and Express Packages. When shippers sign GSR waivers, shipping carriers can no longer be held accountable for late deliveries. For instance, a parcel’s delivery time is the same day, but the delivery occurs the next day. The customer will hold the shipper responsible for the delay and not the shipping carrier. The shippers cannot demand a refund from shipping carriers on signing a GSR waiver. As a consequence, shippers face loss of revenue and customer dissatisfaction. That is why Audintel strongly suggests that shippers should not sign agreements with UPS’ GSR or FedEx’s MBG waivers.

Disadvantages of accepting shipping refund waivers

The disadvantages of accepting MBG waivers include lost customers, an increase in returned shipments, etc. Packages that are delivered late are a chief reason for shippers losing customers. Minimum service charges on each parcel eat away any discounts received on account of the GSR waiver. FedEx may offer an additional package rate discount with an MBG waiver. But, when FedEx applies minimum service package charges, these additional discounts will be negligible and lead to revenue loss. According to recent studies, waiving away MBG rights will cost shippers 1-5% of their entire parcel spend.

How can Audintel help?

Audintel has a well-experienced team of experts who are well-versed in contract negotiations. We compare the services of the shipping carriers before signing a contract. Audintel studies the fine print of each shipping contract with shipping carriers. We will help in getting you discounts while keeping the Guaranteed Service Refund clause intact. We ensure that our clients save more by not signing an agreement with a GSR waiver.

Services offered by Audintel concerning GSR Waiver

Audintel will never suggest a GSR waiver for its clients. We believe the credibility of the client will be affected by accepting the GSR waiver. When a GSR waiver is signed, shippers cannot question the shipping carriers for late deliveries. Shippers’ business gets affected due to delays in parcel deliveries. Shippers are in safe hands when they trust Audintel to manage their shipping portfolios. We not only track each parcel for late deliveries but also request for GSR. Our services help our clients receive the refund amount due to them. As well as enhance customer satisfaction bringing in more business for our clients. Audintel holds the shipping carriers responsible for deficiencies in services. We can save at least 2-5% of overall parcel spend for our clients.

Late delivery refunds are essential for the small parcel industry. Late delivery refund claims save money for shipping companies. There is an estimate that over 3 billion dollars from unclaimed refunds are collected by UPS and FedEx when shippers sign GSR waivers. The refund amount belongs to shippers but, the amount remains unclaimed due to lack of auditing and claim processing. Shippers need professionals who can help them in monitoring their shipment portfolios at every stage. Audintel provides encompassing audit services to its clients. We help in analyzing your shipping spend and save money. Audintel is a name you can trust for auditing parcel services. For further details, write to us at [email protected] or please visit our Audintel website, or contact us at +1 (619) 354 8539.

How to get a refund for late deliveries with FedEx Money-Back Guarantee?

Customers expect shipment deliveries on time. If a delivery is delayed, customers may not order from the shipper again. Sometimes, they may not even raise a complaint but shippers may lose revenue and the trust of customers. Did you know that shipping carriers, such as UPS and FedEx, give a refund for late deliveries on request? If not, then read on and get to know about refunds given by FedEx, such as the FedEx Money-Back Guarantee.

What is FedEx Money-Back Guarantee?

FedEx is a multi-national parcel carrier that promises on-time delivery of packages. If a parcel delivery is delayed by 60 seconds or more, they promise a 100% refund on shipping charges. This refund policy offered by FedEx is known as FedEx Money-Back Guarantee (MBG). It is for small parcel services (Ground and Express) and is initiated only on shippers’ requests.

Requirements to avail FedEx MBG

The shipments that have an exact delivery commitment time are entitled to refunds. To avail FedEx Money-Back Guarantee, shippers need to provide information such as:

Tracking number
The date of shipment
Origin and Destination of the shipment
Schedule date time
Delivery date time

The submission of the claim should be within 15 calendar days from the invoice date.

How does Audintel submit claims for FedEx MBG?

Audintel is the right logistics partner to make refund claims easier for you. Audintel automatically uploads the data taken from clients into its state-of-the-art auditing software. Audintel’s software monitors the scheduled date and delivery time of the packages. On behalf of their clients, Audintel identifies if a package is on time or late.

Further, a request is made to FedEx for Money-Back Guarantee in case of late deliveries. The refund request is through FedEx Billing Online or the invoice adjustment feature at fedex.com.

Money-back Guarantee for FedEx service failure

FedEx has to refund shippers’ transportation charges when there is a service failure. The refunds are given only on request. There is no commitment for delivery of shipments on which there is a suspension of FedEx Money-Back Guarantee. The conditions under which shippers are eligible for FedEx Money-Back Guarantee are that FedEx has to refund or credit transportation charges on request. This refund is applicable if a package gets delivered in 60 seconds. Or later than the committed time for a particular destination. There is one refund for each FedEx package delay.

A request for Money-Back Guarantee should include the FedEx account number, airway bill, tracking number, weight of the package, the shipment date, and receipt’s name, address, and ZIP code.

Audintel receives refunds for its clients from the shipping carriers. The refund gets seamlessly credited into the client’s accounts. Audintel shares the refund amount with the client after charging a nominal commission fee.

Exceptions to FedEx MBG policy

FedEx Money-Back Guarantee has certain exceptions. FedEx will not provide refunds due to these exceptions. The exceptions are:

Customs or regulatory delays due to errors in documentation
Undeliverable or Ground returned packages
FedEx package with an incorrect address
Shipments containing dangerous goods or dry ice shipments
Non-payment of duties and taxes before customs clearance or at delivery
Incomplete recipient information
Oversize or unauthorized packages
Unavailability of eligible persons to accept the delivery or sign the package
Shipment on Wednesday before Thanksgiving and seven calendar days before Christmas

To get FedEx MBG, trust Audintel

Many shipping companies do not realize that they lose money by not claiming FedEx’s Money-Back Guarantee. Audintel processes the claims for shippers and helps in getting FedEx MBG. An automated audit system at Audintel monitors FedEx packages for late deliveries.

We help our clients in getting refunds. Audintel’s interactive dashboard displays the refund process, which is easily visible to clients. The requests for refunds are within the stipulated time. We save 3-5% shipping costs every month for clients with FedEx MBG. Our clients trust us to get FedEx MBG without any hassles.

To sum up

Shippers must save money wherever possible. Shipping carriers like FedEx do not give refunds for late deliveries unless requested. Busy shipping companies may find it a hassle to keep track of late deliveries, losing revenue in the process. Audintel helps solve the difficulties of these shippers. Using Audintel’s automated software, clients get FedEx MBG for late deliveries. For further details, write to us at [email protected] or please visit our Audintel website, or contact us at +1 (619) 354 8539.

How do analytics & BI tools help optimize shipping costs?

Optimization of parcel shipping costs is the goal of shippers. Data Analytics is helping shippers achieve this goal. Shipping contract negotiations help in getting the best rates from carriers. Similarly, new shipping software solutions give shippers insights to reduce parcel costs. In this blog, we will discuss the steps required to optimize shipping costs using data analytics.

Importance of analytics in the supply chain industry

There is an increasing demand from customers to deliver their orders on time. In addition, they expect free benefits from shippers. Shippers have to meet these demands and contain expenses. Data analytics is helping shipping companies meet the demand of customers. They can control the information overload by using Analytics. Further, Business Intelligence (BI) tools analyze shipping trends of companies. These tools are helping to improve shipping efficiency and reduce parcel costs.

Five steps to optimize shipping parcel costs

The steps that shippers take to improve shipping costs for parcels are:

1. Monitor performance of shipping carriers and their services

Real-time shipping data helps shippers to understand the performance of shipping carriers. For instance, with the data, they can identify if the parcel’s delivery is on time. Similarly, shipping carriers provide services like Ground, Express, Priority Overnight, and more. With data analytics, shippers can choose the service that will meet their delivery requirements. Audintel suggests alternate low-cost services for small parcel shipping.

2. Understand distribution zone usage

Today, customers are concerned with fast shipping time. So, shippers need to understand the different distribution zones for shipment. They have to consider the distance between the shippers’ location and the customer’s location. Further the packages are shipped, the more it will cost the shippers. Data that understands distribution zone usage is essential. It will determine if the shippers need to outsource the parcel to a central fulfillment center. By making small changes in the carriers operating in distribution zones, shippers can save additional costs. Audintel offers unique software solutions to shippers with discounts depending on zones.

3. Weight of packages

Data analytics gives insights on the way to handle shipments. They help in addressing issues related to parcel weights. Shipping carriers charge for bulk shipments. Combining multiple parcels and of differing weights together in a single package is a cost-effective strategy. DIM divisor influences the pricing of parcel weights. Alternatively, the dimensions of the parcel are more. Then shippers end up paying more for freight shipping. Shippers can reduce dimensional weight by making smaller packages. The dimensional weight analytics provided by Audintel aids clients in saving parcel costs.

4. Monitor special handling and associated fees

Analysis of weekly parcel data gives insights into the additional charges affecting shippers. Evaluation of accessorial fees is necessary to know the charges levied by carriers. In addition, it is vital to monitor the special handling fees. To avoid Residential delivery fees, shippers can use U.S. Postal Services (USPS) as last-mile delivery, thus saving money. Furthermore, Analytics gives shippers the freedom to ask for discounts from carriers. Audintel provides software solutions to help in mitigating the pain points of parcel shipping.

5. Outsource to a third party for contract negotiations

By aligning with a third party, shippers can reduce parcel freight rates substantially. Incidentally, it amounts to up to 40% savings for shippers. Third-party experts can negotiate with carriers like UPS and FedEx for discounts. They have helped in reducing surcharges. In addition, the negotiations done by outsourced experts give a competitive edge to shippers.

Audintel’s role in optimizing shipping costs

Audintel has an evidence-based learning software system. It is a one-of-a-kind software system that evaluates a client’s shipping profile. The experts at Audintel support clients with contract proposals and negotiations. Based on the historical shipment data, Audintel gives suggestions to clients for reducing parcel costs. Audintel helps its client realize its goal of cost-effective negotiations. Shipping data analytics helps its clients adopt long-term and cost-saving services.

Concluding remarks

Big data analytics is changing the supply chain industry. BI tools help in gathering relevant shipment information, useful for shippers. Analysis of shipping data helps shippers strategize ways to reduce shipping costs.

Audintel uses analytics to cater to your shipping needs. For further details, write to us at [email protected] or contact us at +1 (619) 354 8539. Please visit our Audintel website.

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Best Practices For Shipping Contract Negotiations

Shipping contract negotiations are essential for the shipping business. They help in saving the costs of the shipping companies. However, contract negotiations are complex and time-consuming. The negotiations have to be mutually advantageous to both clients and carriers. There needs to be transparency and open communication. With this in mind, let’s explore the best practices in shipping contract negotiations.

To begin with, let us understand: What are Shipping contract negotiations?

Shipping contracts are legal documents between a client and a carrier. The regular review of contracts is necessary to increase the shipping business of client with carrier. Shipping carriers like UPS and FedEx announce rate increase periodically. Therefore, it is essential to track the rise in shipping spend. The shipping contract negotiations relate to services, weights, accessorial charges, and more.

There are different kinds of shipping contract negotiations such as:

Small Parcel contract negotiations

Small Parcel contract negotiations involve reading the fine print of the contract with the carriers. Shippers need to review their service contracts regularly. In addition, they have to be aware of the incentive offers and discounts. The shipping contracts should list all the services that are essential for shippers. In addition, it should give clarity about surcharges and tariff rules. Nonetheless, negotiating the best parcel rates requires careful planning and monitoring. Audintel services help small parcel businesses in shipping data analysis, optimizing agreements, and reduce parcel costs.

Freight contract negotiations

Negotiations regarding freight contracts include volatile freight rates. In addition, negotiations should consider unforeseen surcharges. Also, there should be clarity in the contents of the freight contracts. Factors such as rates, routes, services, free days, space protection, surcharges, and credit terms play a vital role in discussions. Negotiating freight rates is a complex process, which experts at Audintel are good at handling.

Negotiating rates with carriers

For successful negotiation of shipping contracts, shippers need to know the carriers and their services. Even after finalizing a shipping contract, new surcharges and tariff rules can emerge. Re-negotiations are necessary when an existing shipping contract does not align with a company’s business. Audintel has insights on the working of the carriers. Their team of experts will help in negotiations that are favorable for shippers.

The Best practices followed for negotiating Shipping Contracts are:

Gathering relevant data

Before starting negotiations, shippers should have relevant shipping data. The data contains the past performance of the shipping carriers. Reviewing the historical shipping data gives an insight into the most frequent shipping zones, etc. Moreover, the data helps in identifying the rates and factors to determine the transportation needs. Audintel reviews the historical data for providing to-the-point negotiations.

Request for Proposal (RFP) drafts

Shippers send out Request for Proposals (RFP) after gathering data. A good RFP encourages potential carriers to give clients the best, competitive contract. The draft of the RFP includes the background of the shipping company and the types of products sold. Further, it should contain the shipping history, delivery requirements, and terms. RFPs help shippers in reviewing carriers’ proposals and compare their offers. Audintel takes a close look at RFP drafts and suggests shipping carriers to their clients.

Identify accessorial charges and surcharges

Shippers need to reduce additional expenses during shipment. The additional fees are also known as accessorial charges for carriers like FedEx and UPS. These charges occur where there is redelivery of packages, residential deliveries. Further, surcharges include fuel surcharge, after-hour deliveries, Saturday Delivery, additional handling, etc. Audintel helps in identifying the extra expenses. Audintel suggests cost-effective charges so that the shippers can save money while negotiating with carriers.

Review packing strategy: Dimensional weight Pricing (DIM)

The majority of the shipping carriers use a pricing technique called DIM weight. The dimensions of the package are in consideration for the price calculation. Shippers can cut shipping costs by reviewing the packing strategy. Packaging odd-sized materials require efficient use of packaging material. In addition, Audintel can negotiate with shipping carriers to improve the DIM divisor appropriately for shippers. As a result, it will reduce shipping costs.

Use of carriers

For better negotiations, shipping companies can use multiple carriers or single carrier for effective cost. It leverages competition between the shipping carriers so that shippers get the best price for their business. As a result, shippers get better rates. They can choose the shipping carrier with the best delivery performance and rates. Audintel suggests alternative shipping carriers based on the parcel spend characterisitics.

Know the terms and conditions of the contract

Before signing shipping contracts, it is necessary to read all the clauses. It is essential to understand the terms and conditions of the shipping contract. There is a need for regular review for open-ended negotiations. Shippers need to thoroughly read the shipping contract and assess what will be beneficial for business. Audintel helps shippers understand the intricacies involved in the shipping contract negotiations.

The novel approach adopted by Audintel

Audintel follows the above best practices. And we have a novel approach towards contract negotiations. We have an intelligent mechanism in place to enhance your savings. The holistic approach adopted by Audintel is advantageous for clients.

Finally

It is vital to have good relationships with shipping carriers. A business negotiation based on mutual respect and trust will go a long way. Having a good rapport with the shipping carriers will ensure successful shipping contract negotiations.

When you sign up for services from Audintel, negotiations become simple. For further queries and details, write to us at [email protected] or visit our website Audintel, or contact us at +1 (619) 354 8539.