September 9, 2009
Corporate mailrooms are not only responsible for incoming and outgoing mail, but FedEx, UPS, USPS, DHL, and couriers. Shipping is very different in a mail center than it is in a warehouse. Shipping managers ship products in cartons or on pallets and the charges are passed on to the customers, so, generally, they don’t worry about budgets. Managers of mailing operations are often frustrated regarding their capacity to control the budget for shipping and mailing expenditures. They are often asked, especially in these economic times, to reduce costs; yet the people that make decisions about how to send an express envelope or choose the service level are not under their control. One of my readers is John Sikorski of Princeton University; he shared 7 of his best practices to save money on shipping in the mailroom. Thank you John!
- Education the staff in departments to know which way packages should be sent by holding a shipping seminar for anybody who deals with shipping out packages.
- Every time that the university signs a contract with the vendors we do a cost study to see the difference in prices between FedEx, UPS and the USPS.
- Establish a cost calculator where staff can go to see which vendor cost less. We have done this for Federal Express and UPS. The cost calculator has options that will be true for most of the departments most of time such as Next Day Morning and Afternoon, Second Day Service and Ground Service. We do mostly commercial address and domestic packages so the shipping calculator is only for the United States. Within the cost calculator we also put the fuel surcharge that one of the vendors charges the university.
- Talk to the vendors to see if there is any new programs that could save money for the university such as flat boxes or envelopes.
- Keep informed most vendors have newsletters that are free by e-mail. I also look for magazine that you can get online they will give you some ideas from other companies and universities.
- Join the Postal Customer Council in your area and attend some of meetings that they have during the year to keep up with the changes that occur within the postal service and also networking with the other members at the PCC meet.
- Combine all shipments that are going to the same university or college when using UPS in order to save on the shipping cost.
August 31, 2009
Law offices ship differently. While all 10 of the ways offices can save on UPS and FedEx that I mentioned in my last post are valid for law firms, there are some differences. Law firms mostly ship documents but may also ship boxes filled with files. Here are some of the unique differences:
- The most significant requirement that all law firms have is the capability to track and bill back clients for shipping. This means that every item must have a valid cost center code for a specific client and the case number. Law firms may be working on more than one case for a client and accuracy is paramount. If a matter is not tracked, then the firm bears the expense and it affects profitability. If an item is accidently charged to the wrong client, it can be a major problem. Not only do they look bad, but it takes an administrative effort to clean up the mistake and they probably end up eating the shipping charges. A system that validates that the correct client number and legal matter has been entered can eliminate mistakes.
- Legal firms can ship locally, throughout the United States, and internationally. They need to have the ability to track couriers, local delivery companies, regional carriers, and messenger services as well as UPS, FedEx, DHL, and the US Post Office. Since some legal matters require a signature or proof of delivery, they need to be able to ship with Delivery Confirmation, Registered Mail and Certified Mail.
- Large law firms typically have more than one office. The capacity to have an enterprise shipping technology that ties together all the offices is advantageous. This will allow any shipment for any carrier from any office for any client to be properly accounted for and billed back to the client.
- Many law firms have outsourced or hired a third party to manage their mailrooms. They typically have “free” systems from the carriers and use a separate system for FedEx, UPS, DHL, and the US Post Office. The ability to use one multi-carrier system that has all the history and tracking in one location for all the offices minimizes time searching for information and makes it easier to consolidate reporting. This provides full visibility into the document chain-of-custody.
- Most law firms have a customer relationship management system (CRM) or Microsoft Outlook where they store the contact information for their clients. The capacity to integrate these systems so that the address data does not have to be retyped saves time and eliminates mistakes.
December 5, 2008
Many people are looking for ways to save on shipping gifts over the next couple of weeks. The cost to ship a package to a residence is about $2.00 more than shipping it to a commercial business. I calculated a 5-pound package from New York to Beverly Hills and it was $13.51 for a residence and $11.43 to a business with UPS.
An easy way to save money is to ship the package to the recipients business and save 15% or more on shipping cost. Many people prefer to receive packages at their office because no one is at home during the day. No more packages left on the front porch or waiting for deliveries.
Here is Taylor’s Tip:
Ship it to a business address and save on shipping!
November 13, 2008
Some people are sour that DHL is shutting down their domestic ground and express operation in the U.S.
Can lemonade be made out of this lemon?
According to John Mullen, CEO of DHL Express, in early 2009, DHL will introduce their first deferred international (day definite shipping) product for U.S. customers, named Economy Select International. If this product is priced right, it could be a great option for shippers wanting an economical way to send their product internationally.
In addition, DHL Express will introduce time definite Express products from the U.S. with 9AM and 12 noon delivery to select destinations internationally.
DHL’s commitment is to focus on their core competence, international shipping. According to Mullen, “DHL will offer the latest pickup and the earliest delivery times into and out of many U.S. major metropolitan areas for international shipments and will continue to have a strong presence in the U.S. coupled with an unparalleled global network.”
Let’s hope that DHL will make shipping international more competitive with more options, better service, and lower prices.
November 12, 2008
DHL has announced that it will discontinue its express and ground services in the U.S.
FedEx, UPS, and the USPS want your business.
FedEx is offering new customers a 16% discount on Express services and 8% on Ground and Home Delivery services when you use their software. If you are using a DHL technology you can get a comparison to similar solutions from FedEx.
UPS has created a welcome center for DHL customers right from their home page. You can also compare UPS services & technology to DHL. No discounts are announced.
The US Postal Service issued a statement that it “is open for business and ready to deliver with a full range of competitively-priced shipping products and services.”
In addition, there are regional carriers in some parts of the country that offer package delivery.
What should you do?
My position has always been that no carrier is the best carrier for everything. Every carrier has its strengths and weaknesses. Even without DHL for domestic services, it is still true.
The key to getting the best price is to understand your package characteristics. If all you do is ship light weight residential packages, the USPS may be your best carrier. But, I have seen found that it is rare that any organization only does only one kind of shipping. There is usually a need for shipping envelopes and packages. They may need to be there by a certain time (next day by 10:30) or it may not matter. There are over 25 variables that affect the cost of shipping and different carriers provide various price points depending on their niche.
Larger shippers that spend over $1 million dollars on small parcel shipping should hire a professional parcel negotiator. Let’s face it; with DHL’s announcement, your leverage is gone. If you are interested in working with the best parcel negotiators in the country, let me know, and I will be happy to help you find the right one.
November 11, 2008
In this video, John Mullen, CEO of DHL Express, explains why DHL is exiting its US Air and Ground business. They will be closing domestic and air and ground networks by January 31, 2009.
November 10, 2008
Today DHL announced that they would be shutting down their air and ground package service in the United States, effective January 30, 2009. You can get the presentation here. This is bad news for parcel shippers. We have already seen a price increase announcement from UPS and FedEx is sure to follow. As the DHL commercial from a few years ago said, “Competition: bad for them, good for you.”
November 3, 2008
Fuel surcharges for UPS, FedEx, & DHL changed yesterday and today. Will your shipping system automatically change on the right day and accurately calculate the correct charge?
The majority of shippers charge their customers shipping costs based on the amounts provided by their shipping system, not on the actual invoices from their carriers. You need to make sure that your shipping technology is utilizing the rates you are paying. If your system does not change the fuel surcharge automatically, you could be charging the wrong amount.
Many older shipping systems require the operator to be trained to make the change and remember to do it.
Are you confident your system has the right fuel surcharge?
Here is a summary of the changes:
October 30, 2008
On October 17, UPS announced a price increase of 5.9% for Ground packages to take effect on January 5, 2009. Last Friday, they provided the details. FedEx will probably match this increase as it has in the past. Rumors are that DHL may not even offer a ground service next year, which is probably why this is one of the highest increases in history.
Upon examination, the price increase for most shippers is significantly more.
Let’s look at an example: the new base rate* (without the fuel surcharge) for a one-pound package shipped to a business in zone 2 is $4.57 compared to $4.20 today. That is an increase of 8.8% which is 50% higher than the announced 5.9%.
If that package is going to a residence, the base rate goes from $6.15 to $6.62. If you add the current fuel surcharge of 8.25%, you will pay $7.17 to ship that package next year.
What are you going to do about it? Please comment and provide your strategies and I will share them in this blog.
*Based on the UPS Daily Rates, which are 30% lower than the Retail Rates. Shippers qualify for the lower Daily rates by having a UPS account number and paying a weekly service charge of $9-$18
April 17, 2008
Jerry Hempstead retired as Vice President of DHL in January 2006 after 33 years in our industry. At the National Conference on Operations & Fulfillment, Jerry moderated the panel discussion of experts (I was one), entitled “40 Ideas to Reduce Shipping Costs”.
I asked Jerry to if he could provide advice for small business shippers, eBay sellers, and online merchants on how they might be able to cut their shipping costs. In this video, Jerry shares, what he calls, the best kept secrets in the industry for saving on shipping.
Jerry believes that the best way to cut express shipping is to use the carrier’s pre-paid products.
DHL has a product, called ShipReady. You can purchase letter, legal, packs or boxes. The minimum quantity is 10. I looked at the price and it was $16 for an envelope guaranteed to arrive the next day before noon. I then looked up how much it would be to ship that envelope across the country using http://www.dhl.com. The price was double!
Prepaid services don’t have:
- Residential surcharges
- Delivery area surcharges
- Weight limits
- Fuel surcharges
This is a GREAT way to save money. Thank you Jerry!
Taylor’s Tip #10, “Purchase prepaid express envelopes; save 50%!”