January 2022 - Audintel

Our top reasons for FedEx and UPS return shipments

Since early 2020, there has been an increase in online shopping worldwide. Online shippers want same-day shipping. Shipping companies and parcel carriers are scrambling to meet customers’ expectations. Nonetheless, some shipments do not reach the customers on time. Also, FedEx and UPS may return the parcels due to numerous reasons. This article will explore our top reasons for FedEx and UPS returns.

Cause for return shipments

Customers will have no use for holiday gifts after the holiday season is over. In short, your customer would like to return these parcels to the senders. Sometimes, parcel carriers return packages. Shipping carriers cite many reasons for return shipments. We, at Audintel, found these top reasons for UPS and FedEx returns.

Our top reasons for UPS and FedEx returns

Incorrect address

A misspelled customer’s address or a wrong apartment number is the cause of most return shipments. In addition, if the recipient of the package has moved to another location, the address needs an update. FedEx and UPS both levy a hefty surcharge for address correction. The software solutions offered by Audintel identify these address corrections for our clients.

Package delivery refused or unclaimed

A cause of return shipment is when the recipient refuses to accept the package. Also, the recipient reschedules the delivery of packages and does not pick them up within five business days. The parcel is termed unclaimed and returned to the sender. At times, customers cancel packages and refuse the delivery. As a consequence, shippers lose shipping costs.

Improper documentation

For domestic US shipments, documents like commercial invoices, shipping labels, and tracking labels are necessary. An error in the documentation is a cause for return shipment by FedEx and UPS carriers. Until the documents are verified and error-free, the packages will be held at the carriers’ distribution centers.

Customs clearance documentation for international shipments

For FedEx and UPS international shipments, documents such as certificate of origin, commercial invoice, electronic export information, shipping labels, packing list are necessary. If shippers miss any documents or provide unverified documents, the package is on hold at the customs. Improper paperwork is a cause for UPS as well as FedEx return shipments.

Lack of valid proof of identification

FedEx and UPS return happen due to invalid proof of identification of the recipient. A driver’s license or a passport can give valid proof of identification. Even if someone else is authorized to receive the packages, the recipient should have valid photo ID proof.

Delivery delay by parcel carriers

FedEx and UPS have to refund money to the shippers when there is a delay in delivering packages. The delay could be due to various reasons. The parcel carriers face many service failures. The request for a refund from the parcel carriers is a long process. Audintel can help shippers in this regard. We had discussed this topic in our earlier blogs.

Non-delivery of restricted items

Hazardous materials like lithium-ion batteries, chemicals, fresh food, uncut gems, ammunition, etc., are restricted items according to FedEx and Ups policies. These items will face returns from FedEx and UPS to the senders.

Closure of businesses

Many businesses have shut down or temporarily closed in the past two years. In such a situation, FedEx and UPS have faced many return shipments.

Processing error

If there is labeling or a scanning error by FedEx or UPS, it is known as a processing error. The packages are redirected to the sender due to processing errors by parcel carriers. Shippers can contact FedEx customer service or UPS customer service for further details.

Weather-related delays

Severe weather conditions cause a delay in shipments. There is a rescheduling of the shipment delays for the next business day delivery. Customers may cancel the order, and return shipments occur. It leads to loss for shippers. In addition, shippers are not eligible for Money-Back Guarantee (MBG) or Guaranteed Service Refund (GSR) due to weather-related delays.

What are FedEx and UPS return shipping solutions?

UPS Return shipping solutions

UPS offers several options to its customers to simplify return shipments. They offer the convenience of a pre-printed return label, which accompanies the package. UPS also gives UPS Electronic Return Label directly by email to the recipient. In addition, UPS drivers will collect the return shipment from the recipient’s address. UPS allows recipients to drop off return shipments at a UPS store without a label or a box.

FedEx Return shipping solutions

Just like UPS, FedEx has options to return a package. If the recipient has a label for the return shipment, they can drop off the packages at FedEx retail and contactless FedEx Drop Box locations. Even a QR code return label is sufficient to return the package at a FedEx drop off location nearby. Recipients can also create a return label on fedex.com for returning the parcels. In addition, FedEx’s global returns solutions help shippers improve customer loyalty and monitor their supply chain expenses.

How does Audintel help?

Audintel helps shipping companies by providing visibility of the return packages along with the reasons. Audintel reports help the shippers to analyze the return packages and take corrective measures for future shipments by avoiding the cost incurred on the return packages. Our dashboards provide the details of return packages based on the services also.

Final Remarks

Shipping companies need to make the return process as easy as the order process. Customers will prefer a company that gave a positive shopping experience, even returning a package. In addition, shippers will opt for the parcel carriers that make the return process easy for them and their customers. So, do you have a return shipment that needs our expertise, then contact us on how to go about it? For further advice and services, call us at +1 (619) 354 8539 or visit our Audintel website.

What can you expect in the new year from FedEx and UPS General Rate Increase?

FedEx and UPS issue General Rate Increases(GRI) every year. Businesses have to prepare for rising shipping costs based on their shipping profile. Keeping this in mind, we would like to study the General Rate Increases (GRI) of these two premium parcel carriers for 2022. We will also look at the increase in surcharges and other additional charges of the two shipping carriers.

This article will help shippers understand the price changes in 2022 and choose the parcel carrier according to their needs.

Highlights of General Rate Increase 2022

General Rate Increase (GRI) gives shippers an estimate of the rise in base shipping rates. Depending on the contract negotiations with the parcel carriers, the impact on the shipments for shippers will vary. In addition, accessorial charges also increase every year. The shipping costs vary based on factors, such as distance/zone, dimensional weights, and more. So, our team at Audintel has identified three key highlights from the GRIs of 2022. Further, this comparison is for the United States domestic shipping rates and surcharges only.

A General Rate Increase at the service level

FedEx and UPS offer competitive rates for the domestic US shipping market. However, there appears to be a marked rise in the shipping rates, as seen in the below charts.

List rates of UPS and FedEx

The charts (Fig. 1 and Fig. 2) are for list rates, mainly focusing on 1-pound packages in zone 2. There are eight zones for US domestic shipping zones based on distance. As the distance increases, so do the shipping costs. The shipping list rates are calculated based on the weight of the packages and the shipping destinations. In this chart, UPS and FedEx Ground services show a ~6.8% increase in rates from 2021. Incidentally, parcels with a dimensional weight of more than 150 pounds appear to have a low rate increase.

Fig. 1: UPS 1lb daily rates for services in Zone 102(Next Day Air), Zone 242 (2^nd Day Air AM), Zone 202 (2^nd Day Air), Zone 2(Ground) for destination ZIP codes starting with 004-005

Fig. 2: FedEx 1lb rates for services in Zone 2

Minimum charge reductions as seen for UPS and FedEx

A discount for low-weight packages is possible with minimum charge reductions. It is known as “Minimum Net Charge” by UPS and “Minimum Package charge” by FedEx. Both parcel carriers, UPS and FedEx, offer minimum charges to their customers. Shippers having a large volume of shipments can negotiate for minimum charge reduction in their carrier agreements.

Fig. 3: UPS Minimum charges for packages

Fig. 4: FedEx Minimum charges for packages

Thus, negotiating for minimum charges with parcel carriers is vital for shippers. Our experts in Audintel help businesses negotiate minimum costs in their contracts. Contact us for further information on UPS and FedEx minimum charges.

Accessorial fees and surcharges

With the General Rate Increase announced each year, accessorial fees and surcharges increase annually. We see an increase in some vital surcharges, such as Additional Handling Charges, Delivery Area Surcharges (DAS), and Residential Surcharges. The impact of these surcharges affects the bottom line of shippers. In the case of UPS, an immense change in 2022 is the addition of Remote Area Surcharges for the lower 48 states. It is known as “US48 Remote Area Surcharge”. Earlier, the Remote Area Surcharge was for some zip codes in Alaska and Hawaii.

Fig. 5: UPS Surcharges

Fig. 5 of UPS surcharges indicates an increase in shipping prices zone-wise. In addition, it appears the introduction of Remote Area Surcharge for additional zip codes in the US will affect the profits of some businesses.

Fig. 6: FedEx Surcharges

For FedEx surcharges, our observation is that the Additional Handling Surcharge for zone 2 is less than the charges of 2021. Further, the oversize charges for zone 2 are less than the amount charged in 2021. This information is vital for businesses sending oversize parcels to zone 2. It is good news for shippers sending packages for short distances.

As seen in the above charts, the surcharge increase is due to Additional Handling Charges of packages. In addition, Large Package surcharges (UPS) and Oversize packages (FedEx) indicate the rise in price due to the size of the parcels.

Worried about rising shipping charges – let Audintel help you

Our intuitive audit platform provides innovative solutions to businesses. Audintel addresses the challenges faced by shippers. Our team aids shippers in reducing the impact of the steep GRIs, announced by shipping carriers. We help businesses to

negotiate better deals
receive discounts for services, surcharges
choose the best-quality services of alternate, low-cost parcel carriers

Audintel supports shippers in reducing the shipping charges announced by shipping carriers with our contract negotiations services.

Closing Remarks

Choosing the ideal shipping carrier is difficult. In addition, different shipping carriers have various shipping pricing models that may confuse the shippers. Audintel’s team aids businesses to have a clear idea about the carrier agreements they are signing with the parcel carriers. Our aim is that shippers save money and garner profits simultaneously. So, learn about the impact of GRIs affecting your parcel delivery from Audintel. Reach out to our team at [email protected] or by visiting the Audintel website or call us at +1 (619) 354 8539.

Is outsourcing freight audit a good business choice?

Understanding when to outsource your freight operations is key to being competitive in the face of globalization and to achieving cost-effective and data-driven freight operations. Freight bills are complicated, and as the firm expands, so does the complexity of freight audit and payment. Making it more difficult to effectively manage and evaluate transportation costs.

Outsourcing freight auditing does result in cost savings and improved visibility with a more modern system capable of handling thousands of invoices.

What does it mean to outsource a freight audit?

Freight auditing is the practice of inputting, analyzing and validating freight bills for accuracy. The freight bill is an invoice given by a carrier to the shipper. It outlines the complete charges for the freight shipment.

Outsourcing freight auditing entails handing over the freight audit task to a specialized third party. The audit of freight invoices and bill pay process is being outsourced to 3rd party specialized auditors; thereby reducing internal resources. A freight audit provider already has the groundwork in place, as well as modern tools to process data from all modes.

Outsourcing to an analytical-driven business partner that can input, process, and normalize data before using a unique platform to give actionable insights may assist enhance all aspects of operations.

How does outsourcing freight audit work?

A third-party freight auditor receives its clients’ freight bills directly from carriers to start the auditing process. After receiving the bills, they are loaded into the freight auditor’s system, either manually or by electronic data interchange (EDI). Then, the bills are audited for accuracy when they are entered. Auditors use correct agreements to examine bill validity, duplicate payments, base rates, discounts, and accessorial charges. If an overcharge or mismatch is detected, the auditor either files a claim or attempts to correct the problem. Uncertainties in pre-audited invoices are addressed before payment. After completing the audit, the charges are processed and verified, and the bills are paid.

The benefits of outsourcing freight auditing:

The following are some of the primary advantages:

Increasing productivity:

A manual examination of a freight invoice can be time-consuming and labor-intensive because of the variety and volume of information they contain. Then there’s the issue of appropriately allocating transportation and supply chain expenditures. Supply chain managers are frequently forced to assist accounts payable departments by performing this task themselves. This makes them devote important time away from overseeing freight operations.

Audintel, a freight audit service, has created solutions to simplify the massive work of auditing freight invoices. Outsourcing freight auditing reduces the need for internal employees to undertake this work, freeing up your back office to tackle other activities. Also, allowing your teams to focus on maintaining a lean, robust, and efficient supply chain.

Higher level of transparency:

Internal freight audit and payment have various flaws, including a lack of transparency and a bigger risk that stakeholders must deal with. Third-party providers provide full transparency into cost structures and verification methods to shippers and freight forwarders. As well as critical transportation expense data to help them make rational decisions.

Data-driven insights:

Data-Driven Insights gathered from reporting tools can help businesses make sound cost-cutting decisions. Data analytics is a constant goal for freight payment companies so they can provide greater insight from their data.

Reduction in the cost of operations:

You will undoubtedly save a significant amount of money if you outsource freight auditing services. This is because the freight along with the audit payment alternatives will be automated. Your accounts department would not have to waste time validating payments before approving invoices.

Gained visibility:

You won’t have to worry about your visibility or compliance if you outsource the responsibilities to the best freight audit and payment services. This means you’ll never have to rely on an inaccurate freight expense again. The business you select should have extensive experience operating freight auditing systems.

Conclusion:

Outsourcing freight audit delivers excellent outcomes in terms of cost savings, resource efficiency, and improved business or customer focus. With its powerful analytics and automation platform, Audintel, as an outsourcing audit business, delivers actionable and agile management of every part of your supply chain. If you would like to learn more about our freight auditing methods and systems, please contact us at [email protected] or call us at +1 (619) 354 8539 or visit the Audintel website.

How Audit companies deal with Freight logistical and operational challenges?

Nowadays most companies are leveraging worldwide logistics to spread their footprints globally. Companies will incur huge costs in transportation hence Transportation Cost Control is required to be competitive in the market. To optimize cost and overcome the freight logistical and operational challenges, industries are consulting freight audits and payment companies.

Freight audit and payment companies will help identify the challenges industries are facing with respect to logistics and operations.

Common freight logistical and operational challenges

Dealing with Bulk Data:

The number of shipments is increasing day by day and the companies use multiple carriers for shipment which leads to the bulk of invoices. The amount of paperwork backup required to validate the charges increases tremendously which is impacting the amount of time required for freight reconciliation and also on-time payments. Hence affecting supplier/partner relationships and hugely impacting business.

Improper Freight Billing:

If the carrier contact information or weight information on your bill of lading is entered incorrectly, carrier obtains inaccurate shipment information and that can lead to a number of consequences such as delayed delivery and overcharging on the freight bill. Audintel uses advanced business intelligence solutions to achieve 100% correct billing.

Higher Shipping Rates:

Shipping cost is one of the major contributors to overall Inbound and outbound logistics costs. Shipping expense is something every company has to worry about. We need to be careful in choosing the right carrier and right shipping mode when transporting goods to larger distances as this will incur higher costs. Audintel analyzes the market data to determine how well a carrier is performing and compares the cost of transport against different carriers. Audintel also helps in making tactical and strategic decisions by choosing the right carriers with the lowest cost possible.

Data Transparency:

Companies have access to lots of data at the same time it became difficult to get easily accessible information. Visibility and understanding of data are very important for companies to make the right decisions.

Dashboards are an important component of Auditing companies. Audintel provides new dashboards highlighting a variety of data including shipment overview, annual summary details, audit activities, net spend, etc…

How do Freight Audit Companies help in freight logistical and operational challenges?

Freight audit companies examine the freight bills to verify information on invoices and ensure that the invoice has not already been processed using EDI (Electronic Data Interchange). By automating Freight reconciliation, we can eliminate paperwork and errors caused through manual work. If errors are found on the invoice Freight audit company reaches out to the carrier and ensures corrected invoices are sent whenever errors are found in invoices.

According to third-party logistics research, lowering transportation costs is at the top of the list of logistics sector priorities. Increased optimization using advanced shipping analytic tools makes it easier for the clients to choose the cost-effective carrier and analyze data to determine how well a carrier is performing.

Using BI, Visualization, and Data analytics to spot trends, Audintel provides powerful and interactive Dashboards for clients. Dashboards are also featuring drill-down functionally. At the highest corporate level, the dashboards are designed for the client to view the graphs. It also provides graphic breakdowns of your current rate sheets, so you can quickly see what your rates are with each carrier.

Streamlining invoice processes, reducing costs through invoice audits, and providing actionable insights are just a few of the benefits. All of the steps that were previously completed manually can now be completed using the services of a freight provider and their automation.

Conclusion :

Audintel provides shipping logistics companies full visibility of their supply chains and manages their resources efficiently. Features like Freight Audit, optimization, selection of carriers and data transparency helps customers in choosing the best suppliers. To learn more services provided by Audintel, contact us at [email protected]. You can also learn about our services by visiting Audintel Website or call us at +1 (619) 354 8539.