It “Fees” Like I’m Getting Screwed!

By Guest Blogger, Jim LeRose, http://www.agilenycmetro.com/

I did my due diligence by checking flights at Kayak.com. Then I booked with the least costly airline to Ft. Lauderdale, which also happened to be my preferred carrier, and at that time I thought I had paid for my flights in full. Little did I know…when I checked in months later, I would get hit with $212 in fees for the first checked bag per-passenger. That amount represented 15.4% of my total travel expense! It “fees” like I’m getting screwed!

Wall Street investors and airline executives are laughing all the way to the bank and at you while they snatch a lot more of your money then you expect. CNN reported the airlines are getting billions from these new fees and now the US government is being asked to step in.

I say, what’s the difference between what the airlines are doing vs. what UPS/FedEx are doing to their customers? Answer – not a thing. “Fees” like you’re getting screwed too? You don’t have to take it.

Here’s an example; Last week I met with one of my best customers who discovered from an audit report that I prepared, his company is paying around $2,000 per month just for address correction fees with UPS. This is a fee that penalizes a shipper for not providing the correct information on their shipping labels. Many of these fees were incorrect addresses for shipments sent to the same customers repeatedly while others are for incorrectly spelled street names. This prompted further investigation and more analytics. He quickly realized his undisclosed fees for items such as; dimensional, oversize, delivery surcharges, residential, Saturday delivery etc. totaled 13.7% of a 3m total transportation spend. That means they we’re paying $411,000 extra to the carrier without knowing. Within months we cut this number in half and saved over $200,000 per year in unrecoverable fees. This is not an isolated incident. What’s puzzling is why so many companies either don’t care enough to do anything about it or simply think there’s nothing they can do.

What can be done about big businesses tricking their customers into paying more?

When it comes to flying, from now on I recommend you travel wearing one layer of clothing for each day you will be away, i.e. seven layers of clothing for a one-week trip, and avoid checking bags. Simply remove one layer each day. I admit this solution may be a bit flawed, as it may be slightly difficult to move about the cabin, it can only be used during extremely cold winter travel but it may help the goal of reducing fees.

As you can probably tell I may not know much about reducing fees for air travel but when it comes to UPS/FedEx, there’s plenty I know and a lot you can do!

Here are five simple suggestions to lower or eliminate carrier fees…

1. Get a reputable auditing company auditing your UPS/FedEx invoices immediately! You will get reports every month. Analyze the monthly reports so you can identify the overcharges. Overall my customers report the value of the information in these reports far exceeds the money saved from the actual refunds the auditors get for your company. You have to realize you have a problem before you can fix it and there’s no better way to identify the areas of overpayment then by using a 3rd party auditor.
2. Get new shipping technology (Transportation Management System – TMS) deployed at your company that will disclose these fees prior to shipping and help you save money in other areas. The free stuff such as: UPS Worldship / CampusShip / FedEx Ship Manager etc. aren’t designed to help you spend less – that’s why they are free. Today’s TMS systems can save 15% or more on your annual UPS/FedEx spend.
3. Get started using the USPS for residential shipments and/or low weight items. Their service has vastly improved and you may not know this but FedEx airlifts freight for Priority service.
4. Get an accurate shipping cost exposed in your shopping cart. You must be able to expose the final cost of shipping in the cart so you don’t get whacked with unrecoverable charges later.
5. Get a professional to help you negotiate lower fees or have them completely removed from your contract. Beware carriers have just announced they will NOT cooperate with the 3rd party negotiator of your choice so you will have to work with one behind the scenes.

Check out these links to see the current list of fees charges by your carrier:

• FedEx requires an 11 page .pdf file to explain their fees, to find out more you can click at; http://fedex.com/us/services/pdf/Fees_Shipping_Information.pdf.
• UPS makes it considerably more difficult to see their fees but you can download their daily rates file – a 163-page .pdf file, and then find them listed as “Other Charges” on page 60. Click here: http://www.ups.com/media/en/daily_rates.pdf

I hope this information helps you Ship Better and Save Money.

Do You Know Shipping? Guest Blogs Welcome!

Have you done something to reduce shipping costs that made a difference? Would you like to share your success with thousands of people?

I want to publish ideas that have been proven to be effective in helping parcel shippers save on shipping. If you have any tips, suggestions, or guidelines that you can provide, and would like to contribute to my 2,000 + readers, please submit your blog entry to mark.taylor@myshippingcoach.com.

Here are my guidelines of how to write a tip that gets published:

• What is the single idea that has worked? If you have more than one idea, you may submit multiple entries, but  keep each post to a single idea.
• Explain your suggestion with steps on how to do it that follow in bullets or a numbered list.
• Provide a title for your idea.
• Then an introduction to it.
• Then tell us the idea.
• Give us the step on how to implement it—usually 3-5 steps.
• And then, summarize it.
• Please keep the number of words less than 300.
• Don’t use this solely for promoting your product or service. In the footer, you can put your name, company and website or blog, and I will link to it.

My intention is for this blog to contribute to all small parcel shippers to make a difference. Thank you in advance for your contribution.

Got Challenging Issues in your Parcel Operation: Expert Help Available

There is a famous Japanese proverb, “None of us are as smart as all of us.”

I work with several dozen CEOs in Manhattan as a chair for Vistage. These are some of the smartest, most successful business executives in the world, and yet I am constantly amazed at what we can accomplish as a peer group working together to help one another. Last week, after the meeting, one CEO who was dealing with a quality issue said he was blown away by the suggestions that he received from his peers on what he should do to resolve the problem. “It all seems obvious now, but I didn’t see it until the group pointed it out to me.” He said afterwards. This is the power of a group of peers that have no other agenda other than helping one another.

In October, at the PARCEL forum in Chicago, we have 8 seats left for the PARCEL Key Management Program. This will be a group of peers in the parcel industry who will be together to help one another tackle their most challenging issues they face in running and growing their operations.

Last year, the collective wisdom of this peer group of experienced parcel and logistics managers came up with 25 actionable ideas for reducing transportation costs. This year we already have the following people on the peer board:

• President of a distribution company
  
• Manager of global transportation
  
• Director of logistics
  
• Director of transportation logistics
  
• Transportation and logistics sourcing manager
  

If you are interested in getting help with your challenge and want to be a part of this exclusive peer advisory board, sign up today. My readers can get a VIP pass that will save you on your registration and qualify for $150 rebate on your airfare or $50 rebate if you drive in.

What is a DIM Factor?

Every shipping department and mailroom needs a measuring tape and a scale. The reason is that in order to calculate the correct postage or shipping charges, you have to know the DIM factor.

A DIM Factor is an acronym for Dimensional Weight Factor. It is a mathematical factor for calculating the dimensional weight of a package. UPS, FedEx, DHL, the US Post Office, and some regional carriers use dimensions as a factor in determining the cost to send a package. For example, the USPS has a DIM factor of 1 cubic foot or 12″ x 12″ x 12″. If a package exceeds a cubic foot in volume, instead of the weight of the package, they use the volume of the package to rate it.

Here are the steps for a 12 ” x 12″ x 13″ package:

1. Multiply 12 x 12 x 13 = 1,872.
2. Next, divide the total by 194. 1,872/194=9.65.
3. Round up the result to the next whole number to get the dimensional weight of the package. 9.65 = 10 pounds.
4. If the dimension exceeds the actual weight, you would use this number to calculate the shipping charges. So, in this case, even if you had a 5 pound box, (which is what happened to me) you will be charged for a 10 pound box.

For more information on how USPS calculates dimensional rate, click http://www.usps.com/prices/USPS_prices_dw_pop.html

For UPS, click http://www.ups.com/content/us/en/resources/prepare/dim_weight.html#How+To+Measure+the+Cubic+Size+of+Your+Package

For the FedEx dimensional weight calculator, click http://fedex.com/be/tools/dimweight.html

For the DHL dimensional weight calculator, click http://www.dhl-usa.com/IntlSvcs/dimweight/dimweight.asp?nav=Inttools/DimWeiCal

The USPS has a different factor than UPS and FedEx for domestic packages. You should compare rates between carriers based on package dimensions. For USPS, if the result exceeds 1,728 inches, you must use the dimensional weight. For UPS and FedEx, if the result exceeds 5,184 inches, you pay the dimensional weight.

Domestic is different than International. Here are the current factors:

• Domestic you divide by 194
• International you divide by 166