In my last post I challenged you to figure out why the USPS was more money for a light-weight residential package weighing five pounds. Congratulations to Steve Foster of the US Post Office. He noticed that the dimensions of my package were 12 x 12 x13, which put it in the category of a Large Package. The USPS charges more for packages that are larger than one cubic foot. So in my case, if that package were just 1″ smaller, it would have only cost $11.76 and the USPS would have been my least expensive carrier. That one inch cost and extra $9.59!
The lesson learned is this: when you are comparing rates and services amongst various carriers, make sure you include the dimensions of the package. Failure to do so will cost you plenty!
The last several posts about Priority Mail Flat Rate Boxes have stirred up some great observations by readers. The comments below are from Jay Eichler of The Ultimate Thomas Store. Jay is a big seller of licensed Thomas & Friends products on his website, eBay, and Amazon, so he is very knowledgeable about best practices for shipping. As you will read below, his suggestion can save you 38% on shipping USPS Priority Mail Flat Rate Boxes. Thank you Jay!
I invite any of you with best practices to share them with our community by emailing me at mark.taylor@myshippingcoach.com. Together, we can help one another save on shipping and boost our economy.
Here is Jay’s email:
USPS has spent a lot of advertising dollars on getting people to use the flat-rate boxes. In my opinion, for 90% of what is shipped in them (including many of the widgets they use in the commercial), it would be much more economical for the shipper to use the non-flat rate boxes to get a better deal. For example, this past week I won a Yankees thermal jacket on eBay. The seller lived about 100 miles from me, charged me $16.00 for shipping, and shipped in a USPS Medium Flat rate box which cost them $10.70. Had they shipped in a regular Priority Mail box (Box 1095), it would have only cost them $6.67 for the same package. For a seller on eBay, who should be especially conscious of shipping charges with their DSR ratings at stake, this is a huge waste of shipping dollars.
I don’t know if this is something you would want to publish in your blog, but with the latest change in USPS Priority Mail pricing, the Priority Mail Envelope is now cheaper than the Small Flat Rate Box. The one thing I don’t think USPS thought about is that you can fit the box inside of a Flat Rate Envelope. You could actually use two USPS shipping containers, place one inside the other and ship for the lower rate. Using this, why anyone would pay for a Small Flat Rate Box is insane!
What is the cheapest way to ship a package? It all depends.
I received the following email from one of my readers. Thank you, you have raised some very good questions. Read my response below in blue:
I invite any of you with questions to email me at mark.taylor@myshippingcoach.com. I may not be able to get back to you for a few days, but I read all my emails and respond.
You have a 2-pound package that is shipping to a zone 2 (someplace close). If it fits into the Priority Mail Small Flat Rate Box, you can ship it for $4.95. BUT, if you put it in another box, it would only be $4.90. If you used the bigger Priority Mail Large Flat Rate Box, you could pay $14.50—way more money!
If you have a 5-pound box, the rating becomes more complex. For a Zone 5, you would pay $11.76. It would be cheaper not to use the Priority Mail Large Flat Rate Box. But the same package going to Zone 8 (cross country) would be $16.37, so it would be cheaper to the Priority Mail Large Flat Rate Box. Now, I could ship that same box with FedEx Home Delivery for $10.59 and save $5.78 with the rates I get from FedEx (email me and I will tell you how).
The bottom line is this: no carrier is the cheapest carrier for every kind of package. The USPS does a great job and is the cheapest for package shipping to residences that weigh less than 2 pounds. My advice is to compare carriers and services.
Wow! It sure does cost a lot to ship a small package. Even though I advise people on shipping packages, the truth is that I don’t personally ship that much, maybe a couple of packages a month. So, when I do ship something, like I did over the weekend, I experienced firsthand the surprise and frustration of small parcel shippers. Here is what I saw and learned when I shipped several items.
My first observation was that the retail cost to ship an envelope across the country (from New York City to Beverly Hills, CA) was exactly the same for FedEx Priority Overnight and UPS Next Day Air. I knew that the prices for ground shipments were the same but I did not realize that it was also true for express shipments.
Of course I was shocked that the price was $32.05! I can’t believe that anyone pays that much.
Of course, I was glad that I only paid $14.11 with the discounted rate that I was able to obtain because of my industry knowledge. I saved 56%!
I wondered how people that don’t know where to get a discount feel about paying so much to send an overnight letter. If you email me at mark.taylor@myshippingcoach.com, I will be happy to share with you how I received that rate.
My second package was 2.2 pounds that I was sending to my son in Texas.
I went to USPS.com to get the rates. I was surprised that this small package was going to cost me $9.95 to send Priority Mail.
I saw that I can save $.60 by shipping it online and get Delivery Confirmation for free, saving another $.70 for a total savings of 13%.
I wished that it could fit into Priority Mail® Small Flat Rate Box for only $4.85 online.
While it could have fit into the Priority Mail® Medium Flat Rate Box, that would have cost $10.20 online or $.85 more.
I wondered if people sometimes made the mistake of thinking that the Flat Rate Boxes were always the cheapest way to ship something.
I then went to FedEx.com to compare prices. The retail rate for FedEx Home Delivery was $11.50.
But my discounted rate was only $8.57, 25% less than retail!
I thought about all the people I see standing in line at Kinko’s to ship a package and pay more; I wondered how they compete with bigger companies if they were businesspeople.
The new rates for 2010 go into effect January 4, 2010. The largest increases come from surcharges and accessorials (a fancy word for add-on charges).
The single largest increase is for address correction charges. The charge for ground packages increases from $8.00 to $10.00, a 25% increase! Air goes from $10.00 to $11.00. You could pay $5 to ship the package and get charged $15 because of an incorrect address! Here are a few suggestions:
Before you ship your package, validate your addresses. UPS provides a service, called “Detailed Address Validation” which is available if you are using www.ups.com or UPS CampusShip and shipping to a US address. This feature allows you to validate the street number range and the apartment number or suite number of your address. If it does not match, you will be offered some suggestions to choose from. It is not a 100% guarantee but it is a step in the right direction. This option is on the “create a shipment” page and requires the user to check the checkbox. You can also set a preference on the “shipping preferences” page so that it always performs the address validation. By the way, FedEx offers a similar tool.
UPS also offers an online tool for Address Validation for free. This is an XML tool that will require some help from your IT department to help you but can be used on your website for customers when they place their orders.
If you are not using the www.ups.com or CampusShip, you can use third-party software for validating addresses. I Googled “address validation” and received 131,000 English pages. I would suggest software with CASS certification, which stands for “Coding Accuracy Support System”. This is a US Post Office certification that the address conforms to USPS standards. In fact, here is the list of CASS certified software vendors.
Some shipping software providers also have options for address validation available, so you can also check with your supplier.
Finally, check every invoice you get from UPS for address correction charges. Research the address and do one of two things, correct the address if it is wrong in your database or call UPS and fight the charges. Either way, you should prevent this charge from occurring again.
It is hard to believe but true, the US Post Office has announced that effective January 4, 2010 that it will reduce the price of a domestic Priority Mail Flat Rate Envelope from $4.95 to $4.90! Now a nickel is not a lot of money but it is better than an increase. Sure, some prices are going up—an average of 3.3% for Priority Mail; however, let me highlight some areas that you can save on shipping that are unique bargains in this upcoming change.
The USPS has three pricing levels: retail, commercial, and commercial plus. The first thing that everyone should know about the shipping industry is this: never pay retail. Retail pricing is for people that don’t know how to qualify for a discount. My objective of this blog is to educate so that you can save. With the USPS, you can get the first level of discount by simply using your computer to ship a package. You can do this for free at www.usps.com by simply signing up for Click-N-Ship. The savings are significant. Instead of $4.95, you pay only $4.75 for a Flat-Rate Envelope AND you get Delivery Confirmation for FREE, saving you $.70 compared to buying it at the Post Office. That is a savings of 16%. Online prices, on average, are 5 percent less than retail for Express Mail and 5.7 percent less for Priority Mail. Online savings for international shipping is 10 percent less than retail for Global Express Guaranteed, 8 percent less for Express Mail International and 5 percent less for Priority Mail International.
If you ship higher volumes, you can qualify as a commercial shipper by using PC Postage with through any other qualified PC Postage provider such as stamps.com or endicia.com for a monthly fee. Many other third-party providers embed PC Postage in their solutions.
If you are a high volume shipper, shipping over 100,000 pieces a year or 420 a day, the rates are even better and there are a couple of new bargains: a Priority Mail half-pound price, starting at $4.22 for a Zone 2 delivery and a new Priority Mail Flat Rate padded envelope for $4.95, measuring 9.5 x 12.5 inches will be available exclusively for Commercial Plus shippers.
In this video you will see a real life example of a package that I received where the cost of shipping was at least 10 times more! As a customer that was charged $7.95 for shipping something that could have been shipped with via USPS First Class Mail for $.61, I was unhappy. Not only did it cost more, it took twice as long to get to me from California–4 days instead of 2. And, on top of that, it was more costly to the environment. It cost more to ship, cost more packaging, and contained plastic filler.
I don’t work for the Post Office or get a commission. I just hate it when I see waste.
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.
There are two types of office shippers: corporate offices and small to medium size offices. The difference is the volume of shipments. Corporate offices that don’t have centralized mailrooms may be shipping from a few to dozens of items a day. Most small offices may only ship a few pieces a week to a couple of items a day. Regardless of volume, they have some common characteristics.
The type of shipping that is done in the office is different than the in the warehouse. The front office mostly ships proposals, samples, urgent documents, and occasionally gifts (especially for the boss). Most of the shipping is done by an office manager or an administrative assistant that is computer savvy. They typically ship with the carrier’s website, www.fedex.com or www.ups.com. I have a warning: don’t choose your carrier based on advertising or how nice the UPS driver is to you or you will get a poor discount. I can’t tell you the number of times that I have seen companies shipping as much as a $1,000 a week that have no discount but love their carrier. A few years ago the Wall Street Journal wrote an article about how thousands of office workers couldn’t wait for their UPS man to arrive. They loved their UPS man! I’m not kidding; just for the fun of it, Google “love UPS man” and you will be surprised.
Tips for Saving on Shipping
Ask the person who is requesting that you ship something for them, when the item needs to be received. Studies indicate that more than 59 percent of all overnight items are not opened the same day they arrive! Don’t ship it overnight unless it absolutely positively has to be there.
Check out other service options, such as next afternoon delivery or second day delivery; you can cut your costs from 50%-75%.
Compare the cost with the US Post Office. Priority Mail has tracking and is significantly less money.
Don’t fall in love with your UPS man. Attachment is the source of poor discounts.
If you are not on-line, set up an account. The carriers will give you better rates for an online account.
Find the nearest drop-box. If you don’t ship something every day, don’t pay for pick-up fees.
Track your costs; create a category and charge them to a specific department, person, client, job, etc… You can enter this information in a data field of the shipping application and generate reports.
Double check your address. Some carriers will charge a $10-$15 fee for an incorrect address including items like a wrong suite number.
Check your carrier invoices for errors. Some carriers will tell you what time they delivered so that you can verify if they were on time; if they weren’t, ask for your money back.
The second type of parcel shipper is a mobile worker—this is a person that often works for a large corporation but from home or spends a majority of their time on the road.
The number of mobile workers is significant. By year-end 2011, IDC expects nearly 75% of the U.S. workforce will be mobile.
How does a mobile shipper send an overnight letter or a package?
In conversations with managers of large corporations, this has been a serious problem. Here are some of the issues they face.
Most of the carriers offer pre-printed airbills with an account number and return address embedded in the form. The mobile worker hand writes the addressee information and drops off the envelope. The problem is that hand written addresses are often illegible and can lead to delivery errors or address validation charges. Furthermore, it is more difficult to track these packages unless the mobile worker has a good system for saving and filing their copy of the airbill. In addition, this method makes it difficult for the corporation to properly account for the shipping charges and the accounting department often has to chase down the worker to properly apply the correct general ledger code for accurately classifying the charges.
Many corporations offer access to a single carrier’s website to employees for shipping items. While this is better than an airbill, it is limited to the services offered by that specific carrier and does not compare rates or services from other carriers which can result in overspending. This is inherently a more costly method of shipping. For example, a worker will typically send an envelope using an express service which is four to five times more costly than shipping it through the US Post Office with Priority Mail.
When mobile workers are traveling they often will ask the hotel to ship an envelope for them and add the charges to their hotel bill which is reimbursed by the company. This is the most expensive way of shipping possible. The hotel typically charges retail and sometimes even adds a handling charge. This can cost two to three times more than using a corporate account number.
Are you a mobile worker? I would love to hear about some of the issues that you face in shipping envelopes or packages when you are away. Please let me know.
Posted by mtaylortec 
