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 26, 2008
A recent Endicia® survey of more than 500 small businesses that sell goods online reports more than one third (34 percent) of the surveyed businesses do not know if their shipping provider has instituted a fuel surcharge.
Here is what you need to know about fuel surcharges:
- A fuel surcharge is an additional fee that is added to the base shipping charge.
- UPS, FedEx, and DHL and many regional carriers impose a fuel surcharge on all their services.
- Fuel surcharges today are an additional 8.25% on ground shipments and 28.5% on international and air shipments.
- The US Post Office does not impose a fuel surcharge.
- The fuel surcharge also applies to accessorial charges, like residential delivery, rural area charges, etc…
- Many shipping systems, like WorldShip & Clippership, require the user to configure their software to add fuel surcharges.
- Fuels surcharges can change any time, so users have to monitor what the carriers are doing and change their system in order to have accurate rates.
In order to save on your shipping costs, the best advice I can provide is to compare services and prices amongst multiple carriers and make sure that the fuel surcharge is included.
November 24, 2008
Here is some good news in the parcel industry!
UPS and FedEx have announced significantly lower fuel surcharges for December. With the cost of a barrel of oil falling, you have been probably wondering why you are still paying nearly 30% in fuel surcharges on express and international shipments.
Here are the new rates beginning December 1 through January 4, 2009.
Happy Holidays from your parcel carriers!
November 18, 2008
As Gomer Pyle used to say, “Surprise, surprise, surprise!”
FedEx has announced that they too will be increasing their ground and home rates on January 5. The price increase will be an average of 6.9%.
Wait a second, isn’t that the same as UPS?
Yes, it is. UPS and FedEx have the same base rates for ground service.
When a company named RPS started in 1985, they came out with the same base rates as UPS but with something new—a discount! To my knowledge, UPS did not give discounts prior to then, but to remain competitive began discounting as well. FedEx purchased RPS in 2000 and kept the same pricing policy. So that is why it is not surprising to see this price announcement.
However, just because they are the same, does not mean that you should not compare rates and services between carriers. I wouldn’t compare UPS Ground to FedEx Ground because a shipper will have a better discount with one of the two. So ground shipping will always be less with the carrier that provided the better discount.
I would suggest that you compare service and prices with the US Post Office, regional carriers, international carriers, and for heavier weights, Less than Truckload (LTL) carriers.
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 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 18, 2008
FedEx Home Delivery is a service designed for online retailers and eBay sellers that have hard to please the customers. Did you know that FedEx will call your customer and set up an appointment to deliver the package when the customer is home? Even at night or on a Saturday.
We all lead busy lives and it is frustrating as a consumer to have to wait for a package to be delivered. It is even worse if the carrier comes and leaves a note on the door saying that they attempted a delivery and you have to wait another day.
Steve Noble, Product Manager for FedEx Home Delivery, talked to me at the National Conference on Operations and Fulfillment about some of the unique options that FedEx can provide to satisfy customers.
FedEx Home Delivery offers features like the following:
- Delivery until 8 PM (like when we are home from work) and the option for an evening delivery
- Saturday delivery at no extra charge
- An option to specify the day the package will be delivered
- You can even specify a specific date and scheduled time. FedEx will contact the recipient by phone in advance to schedule the delivery.
April 16, 2008
Taylor’s Tip #9, “Don’t buy parcel insurance from your carrier; save 50% with third party insurance.”
UPS, FedEx, and DHL all offer various forms of insurance if your package is lost or damaged. With these carriers a shipment is automatically protected up to $100 for loss or damage, but if you require more protection than you need to declare a higher value for protection. FedEx and UPS call it “Declared Value”. DHL calls theirs “Shipment Value Protection. The US Post Office offers insurance as well.
The formula works pretty much the same even though the rates are different if you have a retail or commercial account.
For example, UPS charges $0.90 for each $100.00 (or portion of $100.00) of the total value declared, with a minimum charge of $1.80. If you had a package that was worth $500, you would subtract the $100 that is included and have $400 or 4 units x $0.90 for a cost of $3.60.
If you did 10 packages a month, you would be paying $36 just for insurance!
Now here is a secret that many eBay sellers and online merchants don’t know. There are third party insurance companies that will insure your packages for 50% less than the carriers charge.
I had the opportunity to video Walt Moscoso, Director of Sales for U-PIC Insurance services at the National Conference on Operations and Fulfillment.
U-PIC offers discounted package insurance for packages shipped via major carriers such as UPS, U.S. Postal Service, FedEx, DHL, etc. The package is shipped by the carrier but insured by U-PIC, saving you hundreds, perhaps thousands of dollars every year. You will save 60-80% on your insurance costs. There are no minimum requirements.