Freight Auditing: A Few Ways to Cut Fedex & UPS Shipping Costs

A company’s shipping costs, whether it’s parcel or freight, usually comprise of at least 10% of their overall expenses. It is therefore imperative for shippers to be more knowledgeable in various cost reducing methods that will increase the company’s bottom line. Shipping with FedEx and UPS can be very expensive, so here are a few ways to reduce those costs.

Claim Your Refunds

Did you know that 3% of packages delivered by UPS/FedEx arrive late? Their Money-Back Guarantee policy states that you are entitled to a full refund on that shipment, even if it’s only minutes late! However, the catch is that they make you initiate the refund process, and don’t do it automatically. Requesting credits for service failures, overcharges, weight discrepancies, etc. can definitely add up and will significantly reduce your costs. However, you do have to be knowledgeable in the 40+ parameters for refunds (service failures are just one of those parameters) to claim them and constantly be monitoring your account which can prove to be very time consuming. Furthermore, the carriers only give you a window of 15 days from the date of invoice to claim those refunds. Using a 3rd party parcel and freight auditor is recommended to both increase your refunds and save you time.

Get the right Discount

If you are a high volume shipper of either ground, domestic express, or international, then most likely you can negotiate with your carrier for better rates. Don’t be ashamed to ask for it. You are the customer who is spending hundreds, if not thousands of dollars every month and therefore have the right to obtain higher discounts. To effectively negotiate with UPS/FedEx, shipping managers need to be very knowledgeable in their shipping needs, volume, and projections. If one isn’t up to date on this, it is recommended to consult with a 3rd party auditing firm.

Use a 3rd Party Shipping Insurance Provider

Another way that UPS & FedEx make their money is by overcharging the customer on insurance costs. While UPS/FedEx charge $0.70 for every $100 of Declared Value, a 3rd party will charge significantly less, usually around $0.30 per $100 of Declared Value. So for a shipment that has a declared value of $5,000, UPS/FedEx will charge you $34.30 (the first $100 of declared value is free) and the 3rd party will charge you only $14.70. So that equals to a 57% discount by using a 3rd party! Multiply this amount by hundreds of packages that you might insure a month and you are greatly decreasing your insurance costs.

By taking a close look at these couple of freight bill items, you might find that you’re able to save quite a bit of money each month. As is usually the case in business – inspect your freight bills and regularly commit time to performing an analysis of the numbers so that this often ignored area gets the attention it needs.

This article is a guest post written by Eytan Sebag, President of Betachon Freight Auditing, a company that specializes in auditing Fedex UPS accounts, negotiating carrier contracts, and LTL Brokerage services.

Christmas Shipping Nightmares

by Will Schneider

It’s that time of year – last minute online purchases for your loved ones with the youthful anticipation of smiles on their faces Christmas morning. In particular, the great joy of giving the perfect gift to a child and watching their face light up when the wrapping paper is torn through like a vulture devours its prey. And the sigh of relief when it’s all over, knowing you pulled it all off without a hitch.

If only it were this simple…

All too often, the Christmas dream is turned upside down by a mis-shipment – whether the shipment arrives late or missing parts. And finally, it happened to us this Christmas…well more specifically to my 5 year old son.

Our parents bought our son a super duper all in one basketball, hockey, soccer set. Of course, no sooner than the wrapping paper had been ripped off of the box did he beg and plead for us to start setting it up so he could enjoy it. And within minutes of stumbling through the 100 step set up process, I realized that two critical parts were missing.

What were we to do? The toy was bought online. We could send it back and wait for the return and severely disappoint our son. Or we could get creative. With little choice in the matter, his grandpa quickly drove to the nearest Home Depot, looking for some PVC pipe and a saw. Within 5 minutes of getting back, we had the entire set back up and running and averted a huge Christmas disaster.

But we know that many of you either couldn’t replace a part as easily or flat out didn’t receive the present in time. With another Christmas behind us, we thought it would be an opportune time for us to gather up some of this year’s Christmas shipping nightmares.

Send us a note explaining your disaster and you may find your way to our top 10 Christmas shipping nightmares list for 2012. Send notes to


Freight Forwarding Costs

by Will Schneider

If your business imports goods from overseas to sell in the U.S., then you’ve come across freight forwarding. Simply put, freight forwarding is shipping product overseas, whether that’s importing or exporting. However, as easy as this sounds, international shipping can be extremely complicated. In addition to choosing the correct codes to classify your products, you must also clear your goods through customs.

This is why a lot of companies hire shipping companies in order to take care of all of their freight forwarding needs. But be careful, because not all freight forwarders are created equal. In fact, many of them aren’t completely open with their pricing, which makes comparing price quotes extremely difficult. Some things to keep in mind: always ask the freight forwarding companies to provide you with “all inclusive” pricing and to include services to get the product from the factory to your door.

There are quite a few other things that companies will not include in their pricing, in order to make their pricing look more competitive than others. For example, many freight forwarding companies will provide a quote to get your product from port to port. However, what this doesn’t include are the all important costs of getting your product from the factory to port exit, and then the port of entry to your warehouse. As you can imagine, these can be quite expensive – and if you make a decision without these costs factored in, you’ll no doubt be left speechless when you get your final invoice. I’ve seen numerous cases where companies were shocked with the final costs of freight forwarding once they get their invoice.

And remember, custom fees and custom clearances charges can add up as well, so please make sure that you get an adequate estimate of these charges before selecting a freight forwarder. Of course, you’ll have to know the precise product codes that apply for your goods, but this information will be needed regardless.
As you can see, there is a lot involved with bringing product in and out of different countries. Shipping is such an important part of your business. It really does pay to take a little time to learn more about it, so that you can navigate the shipping negotiations with confidence. Far too often, people are taken advantage because of their lack of knowledge. Our hope is that you’ll learn a little about the industry so that you don’t get taken advantage of.