Top Five Tips to Save Money on Shipments

Top Five Tips to Save Money on Shipments

October 02nd 2019

Save Money on Shipments can be considered for a variety of reasons, but it always necessary to seek these approaches when you ship regularly. These cost-saving tips should always come into consideration in averting costly slip ups when mailing out products through shipping that may turn out to be huge at the end of the quarter.

The use of ship transportation can be amongst the most tasking operations for any SME owner. Tackling issues like limited to zero scheduling can cause such businesses to overpay, along with affecting sales if continuous provision cannot meet customers' demand.

Also, businesses that do not regularly send out large shipments but numerous pallets at a time and cannot pay for hiring logistics providers to handle its shipments would find these top five tips useful in developing a practical guideline that would be essential in the long run.

VP of transportation services at Tompkins Associates, Don Anderson, says, “Effectively managing shipping costs has direct effects on a small business's bottom line."

The Supply Chain and Distribution operations consulting firm based in Raleigh, N.C., Tompkins Associates, works with small and large businesses.

Don Anderson adds, "Every dollar saved in transportation translates to an equal improvement in financial performance."

Below are the top five tips every business owner should consider before time before making any product shipment to customers:

Matching Delivery Fees and Necessities via Common Shipping Requirements.

Once you have selected a suitable provider for shipping services, like DHL, FedEx, UPS, or the U.S. Postal Service, connect and work directly with its small-business specialist. This approach would help you to match their fees and services via the standard shipping requirements peculiar to your business — for instance, delivery timing and transportation mode.

In line with Tompkins Associates, businesses who do not work closely with a carrier in mapping out such shipment criteria can spend close to 40% or more in fees when compared to others who do, Anderson adds. Another critical factor to deliberate with the specialist is when to ship package through air or by land.

Director of the Center for Supply Chain Management and Logistics at the University of Illinois at Chicago,  Anthony Pagano, says "How much can be saved by using ground services versus air services can depend on distance shipped, the weight and size of the package and its value,"

He also added, "Look at the carrier's tariff schedule and compare prices."

Also, in his recommendations, Pagano adds that business owners should create rules to aid staffs know when to perform order shipment to avert paying higher "express delivery" charges.

Pagano says, "If you need to ship at the last minute, air might be the only alternative, but at an increased cost."

Establishing Transport Cost and Charge-Back Strategies.

Allow customers know what it would cost them for every shipping, and the time of delivery is always a plus. Once you have such strategies in place, kindly inform your customer and sales services personnel, as they mostly deal directly with clients, Anderson advises.

He says "For instance, three-day parcel service may be the standard level of service that is paid for by the company, and any premium services -- such as overnight air or two-day parcel -- are paid for in part or entirely by the customer,"

Using Postage Meter.

Postage Meter is a portable device equipped with scale for assessing exact postage charges, weighing packages, and printing shipping labels. These systems can aid in eliminating the services of mailers to guess package weight and also the procurement of additional postage.

Pitney Bowes, a top Postage Meter Provider, suggests postage meters can save small businesses as much as 20% yearly on postage. Also, hiring a postage meter may be an affordable option with monthly starting fees estimated to $20, noted Pagano.

Pagano says, "Using a postage meter can eliminate over-postage and is much easier than going [directly to your shipping carrier] and waiting in line."

Identify When to Consolidate.

If you plan to send shipments weighing between 150 to 20,000 pounds (usually called "Less Than Truckload" shipments, or LTL), you should contemplate work with freight consolidation service. Consolidation services seek to combine your delivery with others to make a full truckload.

Pagano says "Less than truckload or container load rates are usually much higher than full truckload or container load rates,"

He also adds "LTL shipments have to go to a truck terminal to be consolidated [by the carrier] into a full truckload for shipment. If the small business has a full truckload shipment, then the carrier can pull up to the company’s terminal and load the truck and go, saving time."

Evaluate Carrier Performance.

One critical method for evaluating your carrier performance, which involves tracks cost and service, is to keep a "scorecard" on your carrier. You can also make some additions to service factors like access to online status data, data accuracy, meeting delivery or pickup appointment times, response to customer inquiries and meeting agreed transit times.

For cost factors, it usually consists of baseline by distance or weight, cost by service level (for instance, premium expedited or overnight, standard service, and more). Also, non-essential fees like meeting time-specific delivery times and special handling can be added.

Anderson says "It’s critical that shippers not rely solely on carrier data [since the data comes directly from the carrier],"

He adds. "Another option is to poll your customers or vendors who are receiving your shipments."

CONCLUSION

Working with your preferred carrier to recognize and resolve failures or lapses in service can be a cost-effective approach to saving more. Also, customers' input can be helpful as their information would aid increase sales over time. In other words, creating good shipment practices would lead to fewer fees -- and happy clientele.