smartmockups_kuwfb6uh-768x511 (1)

Reduce shipping costs of small parcel shipments seamlessly

The postage charges of the U.S. Postal Service are rising, according to the latest news. USPS Ground Advantage service is one of the simplest, affordable ways of shipping small parcels. But, its prices have increased. Similarly, there is an increase in the prices of USPS Priority Mail® and USPS Priority Mail Express® services. Further, the annual shipping rates of major small parcel carriers like FedEx and UPS have seen an upward trajectory.

It has led to a rise in the cost of shipping services for businesses. Many shippers are searching for faster and cheaper ways of shipping small parcels. Small parcel delivery companies offer discounts and affordable shipping rates. However, shippers need to know where to look to get the best service.

Regional carriers compete with the bigger shipping couriers with offers of different service options, fees, and more. Nowadays, the demand for free shipping and fast delivery is growing. E-commerce owners have to fulfill customers’ expectations and lower shipping costs. So, companies must find ways to reduce shipping costs.

This blog will cover the five ways to lower shipment costs and make profits for companies.

Factors affecting shipping costs

Small parcel shippers face challenges of packaging and labor shortages. To increase business profits, reducing shipping costs is vital. In addition, it is necessary to meet customer expectations when delivering small parcels. There are several factors affecting shipping costs.

The main factors affecting shipping costs include

  • Delivery speed and service

Faster small parcel delivery satisfies customers’ needs. Last-mile delivery of packages can influence shipping costs. In addition, the service levels provided by small parcel carriers like ground or air transport affect the shipping costs.

  • Weight and dimension of packages

Heavier packages cost more. Package dimensions also can affect shipping costs. Bulkier packages occupy more space in a delivery truck. Thus, small parcel delivery companies charge more for the packages.

  • Shipping distance

It will be costly to ship a small parcel far away. It will be cheaper to ship it to a nearby location. Small parcel shipping costs increase depending on the shipping zones within the contiguous US states. Small parcel international shipping involves taxes and duties affecting shipping costs.

  • Surcharges

Accessorials can influence the shipping expenses. There are many surcharges, like additional handling charges, fuel surcharges, residential delivery fees, delivery area surcharges (DAS), and more. The surcharges can add to the shipping costs if the shippers are not vigilant during shipping.

These factors will affect the calculation of shipping charges. Companies can reduce expenses by partnering with 3PLs and warehouse management. Further, they can invest in efficient packaging methods and streamline the shipping process.

Five ways to reduce shipping costs

According to the latest statistics, 47% of online shoppers abandon their carts due to extremely high costs. The high shipping costs could be due to taxes or shipping rates. Longer delivery time is also one of the reasons for cart abandonment. Shippers can reduce shipping costs in several ways. Audintel advises our customers about the ways to save money. Here are five easy ways to lower shipping costs.

  • Using advanced tracking software tools

Automated Transportation Management Software (TMS) allows shipping companies to reduce expenses. The tracking software helps shippers track their shipments. It provides an accurate shipment delivery time. Companies can cut shipping costs by effective planning of transportation budgets.

Audintel’s TMS effectively manages shipping spend by managing small parcel carrier payments and performance. It gives shippers an edge over shipping carriers when requesting refunds for late deliveries. Audintel monitors the package deliveries and files a refund for our customers. Shippers get insights into real-time tracking of small parcels.

  • Management of shipping rates

Small parcel carriers offer different shipping rates and delivery services to customers. FedEx and UPS increase their shipping rates annually. Shippers can choose the service levels that suit their business needs. Further, they can check the services of alternate shipping carriers. So, shippers choose from the shipping rates of many prime and regional small parcel carriers.

Audintel gives comparison data about the parcel carriers’ rates to shippers. It provides valuable data insights to shippers. Audintel helps companies optimize their shipping operations with small parcel data management. Managing shipping rates of small parcel carriers allows shippers to save money.

  • Negotiating with small parcel carriers for the best shipping prices

A well-negotiated deal is the core of each shipment. Thus, negotiations with small parcel carriers are vital for companies. Shippers can reduce shipping costs by negotiating a flat fee from small parcel carriers. Shipping carriers like UPS and FedEx offer better fees for small parcels based on the size, weight, and destination. Shippers can expect discounts for some services from small parcel carriers.

Experts from Audintel have the data about shipping rates and discounts of shipping carriers. They inform shippers about the discounts and shipping rates of the small parcel carriers so that they get the best deal. Businesses can negotiate shipping rate discounts before the annual General Rate Increase (GRI). In this way, shippers benefit from discounts offered by small parcel carriers.

  • Inform shippers of the importance of shipping audits.

Customers hate unexpected charges in their invoices during the checkout process. Shipping companies can educate customers on the complexities of the shipping process. Shippers can reduce shipping costs by creating pick-up points for customers’ orders. Businesses can negotiate with fulfillment centers for shipping packages quickly.

Moreover, shippers can decrease the size of the packages to save money. For example, use a poly mailer for small parcels instead of a box. In addition, companies can reduce the weight and dimensions of small parcels. For instance, use lightweight and compact packaging material.

Shipping audits are essential for companies to lower shipping costs. Our team at  Audintel provides an in-depth audit of the shipping process. It identifies mistakes made by small parcel carriers. We point out any improper invoicing or unnecessary charges levied by shipping carriers.

  • Streamlining the shipping process

The entire shipping process requires streamlining from beginning to end. Companies can increase profit margins by optimizing the supply chain model. Identification of supply chain bottlenecks in time prevents shipping disruptions. In addition, shippers need to pay attention to customers’ needs. Shipping companies need to adopt advanced shipping processes with efficient planning.

Audintel advises shippers about shipping strategies to increase profit margins. We provide business models to shippers that lower shipping costs. Presenting real-time delivery updates to customers helps increase customer satisfaction. Further, Audintel provides customized shipping reports for shippers to streamline their shipping processes.

How Audintel services reduce shipping costs

Audintel’s audit team has TSM services to help shippers manage their shipping profiles. Our TSM services include

  • real-time tracking of shipments
  • identifying invalid, inaccurate billing charges
  • assessing carrier contracts
  • saving with accurate pricing calculations
  • analyzing Transportation Spend
  • claims and refund processing, etc.

Audintel’s state-of-the-art cloud-based software provides access to the best shipping rates. It allows shippers to compare shipping rates of different small parcel delivery companies. We offer real-time shipping data to shipping companies. Our AI-based technology saves money and time for our clients. We aid shippers in negotiating good contracts. As a result, shippers receive the best deals and discounts. In addition, we provide shipping strategies to customers that help reduce shipping costs.

The bottom line

Small parcel shipping is complex, whether you ship locally or globally. Small parcel delivery companies add to the complexity by increasing their shipping prices. Businesses are looking for ways to ship small parcels economically and effortlessly. Small parcel audit companies help companies lower shipping costs with minimum hassles. Audintel gives shippers peace of mind with its sophisticated business intelligence solutions for Transportation Spend Management. The data analytics provided by Audintel helps shippers save money. Need help in reducing shipping costs- contact us at +1 (619) 354 8539. Further, visit our Audintel website to learn more about our services.

smartmockups_kumf924a-768x538

Scenarios in which to negotiate a new contract with shipping carriers

Are shipping companies satisfied with the services provided by shipping carriers?  Also, are shippers overspending on their parcel shipment?  Shipping contract negotiations with shipping carriers can address these queries. Shipping companies require contracts that provide quality service at the best price.  So, shippers can reduce shipping costs at each stage. This article covers the kind of improvements to existing shipping agreements. We will also discuss the scenarios for the preparation of new or renewal of shipping contracts.

Shipping contract negotiations

Shipping companies enter into shipping contracts with carriers for parcel shipping.  Shippers have to know their shipping profile when negotiating with shipping carriers. Shipping companies must understand what the fine print of the contract says. As the shipping rates change every year, shippers need to keep a tab on the shipment costs. In addition, over time, shippers may realize that some parts of the agreement need improvement.

What are the improvements to be made to existing shipping agreements?

Shipping companies view information on shipment details. The shipping reports provide them information on the number of packages, total spend, services, etc. They want to see improvement in the delivery services and costs.  As a result, they examine the shipping agreements to make any improvements. These improvements could be in Dim divisor, surcharges, earned discount and base discount, minimum, MRA, etc.

Scenarios for preparing shipping contracts

Shippers are looking for ways to renew shipping contracts that benefit them. Alternatively, they are searching for shipping carriers that offer competitive prices with quality delivery service. There are five scenarios that shippers look at based on data inputs and other parameters.

  • Optimization of existing shipping agreement

Initially, when shippers and shipping carriers sign shipping agreements, the parameters are different. These parameters include surcharges, accessorial charges, weight calculation, minimum charges, and more. Each year, these charges vary due to new regulations. Consecutively, the shipping costs on each package increase every year. So, to optimize existing shipping agreements, parameters including discounts, MRA, Minimum, Dim Divisor, Surcharges are considered. For example, shippers need to review the respective carrier’s Money-Back Guarantee regularly to receive the refunds due to them.

  • Change in existing shipping contracts for cost-effective services

Existing shipping contracts require change when the services are costly. Components such as maximum weight, zone, etc., interfere in providing cost-effective services. In the case of short-distance shipments or not urgent packages, it is wise to choose cheaper services. For instance, shippers change from one service to another service that costs less for shipments.

  • Use of alternate shipping carriers for business profitability

Shippers use multiple shipping carriers to increase their business profits. The shippers have an understanding of what the competitors are offering. While negotiating shipping contracts, shipping businesses can shortlist the shipping carriers that bring them profits. If a shipper is not happy with a particular carrier’s terms and conditions, they can opt for alternate carriers which have better terms and conditions suitable for their business.

  • Expired shipping agreement

For a shipping agreement that will expire in a year, shippers can consider a new shipping agreement or renew the old one with new terms. Shipping companies can set their timeline for the termination of the shipping agreement. They can put favorable terms and conditions in the shipping contracts that improve their bottom line.

  • Discontinuation of services of shipping carriers

Shipping contracts with shipping carriers should give prominence to quality service. But if the services are causing harm to the shippers’ profits, it is best to discontinue those services. For instance, if a shipping carrier does not provide accessorial discounts to domestic Air express services. Then it is best to shift to another shipping carrier that provides these services.

How is partnering with Audintel helping shipping businesses?

Audintel plays a vital role in empowering shippers to get the best out of their shipping contracts. Our experts analyze the data and also review and improve the shipping contracts of our clients. We point out any deficiencies in the shipping contracts. Audintel helps in improving the shipping costs for shippers. Audintel helps clients understand the intricacies of an existing shipping contract. And if necessary, we help to negotiate a new shipping contract on the clients’ terms.

Conclusion

When negotiating shipping contracts, understanding shipping rates is vital. Also, the reliability and efficiency of the shipping carriers are essential. Shipping contracts should be beneficial for both shippers and shipping carriers. Audintel helps you in cutting shipping costs and balance your bottom line. If you need help in shipping contract negotiations, contact us at [email protected]. You can also learn about our services by visiting our Audintel website or call us at +1 (619) 354 8539.