Blog Post Written by Scott Reynolds, American Western Distribution
Keeping Your Package Shipping Costs in Line – Small to mid size companies
Shipping packages has become increasingly more expensive with the cost of fuel continually on the rise. Companies need to keep a close watch on these costs. It pays to review your invoices regularly for mistakes and insure you are charged correctly. Was the package a residential or commercial delivery? It matters, delivery to a business is less costly than to a residential address. Was the fuel surcharge invoiced correctly? Finding these mistakes can save money.
Another method of lowering costs is through increased volume. Each time you sign a new account, check with your carriers to see if they can offer a higher discount with the additional volume. We recently were fortunate enough to acquire a new account that will be shipping thousands of orders per month. This volume could have a great impact on our shipping rates, for all our accounts, and also put us in a position to acquire additional new business as a result of reduced rates! We called our carrier reps in for meetings to see what programs were available to us with this new business. Allow plenty of time for this. The reps are busy people and they tend to travel a large area so they may not be able to see you for a week or longer. The various carriers have many different programs to offer plus they have partner programs with each other that can offer additional savings! Once you receive the cost analysis back from the carriers, compare them and don’t be afraid to ask for a better rate if the first analysis isn’t what you were expecting! If you don’t ask, you won’t receive. We did and the rates that came back to us averaged another 3 to 4% discount!
Make sure to compare fuel surcharges (FSC). This also can greatly affect the total cost. Some companies charge a percentage of the delivery cost and others charge by weight. Depending on the type of product you are shipping there could be tremendous savings by choosing the company whose FSC best fits your needs (providing their basic rates are competitive). In this particular case we saved $.32 cents on the average order just on the FSC not to mention the basic rates were the most competitive offered!
Another method of keeping your package shipping costs in line is through the carrier pickup. Most carriers charge a fee for this service that can be waived if you are near their drop off location and have the ability to deliver the orders to the terminal yourself.
From startup companies to small companies to midsized companies, shipping fees are a large percentage of the total cost charged for your services. As a result you need to pay due diligence to this segment of your cost structure as it could make or break you in efforts to signing new accounts and keeping current customers!
About American Western Distribution, www.awdaz.com located in Phoenix, AZ, specializes in providing World Class Warehousing, Distribution and Logistics Services. AWD receives product for companies that don’t want the expense of a ‘brick and mortar’ organization but require our services for storage, order fulfillment and distribution of their products. All of our programs are custom tailored to meet each customer’s needs!