It “Fees” Like I’m Getting Screwed!

July 31, 2010

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:

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


What is the Cheapest Way to Ship a Package?

February 7, 2010


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.

I stumbled upon your blog and I’ve got to say, it is very helpful.  I am a new Ebay seller and am new to this whole shipping business.  I was wondering if you could answer a question for me.  I use USPS for my shipping; I’ve found it to be cheaper than FedEx and UPS. Priity Mail Flat Rate Options

 

 

  Price Size
Priority Mail Flat Rate Envelope $4.90 12-1/2″ x 9-1/2″
Priority Mail Small Flat Rate Box $4.95 8-5/8″ x 5-3/8″ x 1-5/8″
Priority Mail Medium Flat Rate Box (FRB1) $10.70 11″ x 8-1/2″ x 5-1/2″
Priority Mail Medium Flat Rate Box (FRB2) $10.70 13-5/8″ x 11-7/8″ x 3-3/8″
Priority Mail Large Flat Rate Box (Domestic Addresses) $14.50 12″ x 12″ x 5-1/2″
Priority Mail Large Flat Rate Box (APO/FPO Destinations) $12.50 12″ x 12″ x 5-1/2″
Here is the priority mail flat rate prices.  What if I want to use my own packaging or some of their other boxes not on the list, such as their shoe box?  How will I know how much it is going to cost?  It is based on weight?  Basically, I just want to know how USPS determines shipping costs.   And, do you have any tips to get the lowest shipping price possible? I ship mostly clothing and shoes, not anything that would be too heavy.  I would like to get them shipped at the lowest possible price.  How can I do that with USPS? Thank you so much!!!

The cost to ship a package depends on the weight, zip code, and dimensions, among other factors. For USPS you can ship in your own box, or in a Priority Mail box that you can get for free. Priority Mail Flat Rate Boxes can be the best way, but not necessarily. It all depends. Let’s look at a few examples:
  • 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.


Even Small Parcel Shippers Can Save 50% or More!

January 17, 2010

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.

5 Ways to Offset the Largest UPS 2010 Rate Increase

November 28, 2009

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:

  1. 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.
  2. 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.
  3. 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.
  4. Some shipping software providers also have options for address validation available, so you can also check with your supplier.
  5. 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.

Why Would You Pay 10X More to Ship a Package?

October 27, 2009

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.


Law Firms Ship with UPS and FedEx Differently: 5 Things You Should Know

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.

10 Ways Offices Can Save on UPS and FedEx Costs

August 23, 2009

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

  1. 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.
  2. Check out other service options, such as next afternoon delivery or second day delivery; you can cut your costs from 50%-75%.
  3. Compare the cost with the US Post Office. Priority Mail has tracking and is significantly less money.
  4. If you don’t have a discount, research your industry’s trade association and see if they offer one. See my other tips on getting a better discount.
  5. Don’t fall in love with your UPS man. Attachment is the source of poor discounts.
  6. If you are not on-line, set up an account. The carriers will give you better rates for an online account.
  7. Find the nearest drop-box. If you don’t ship something every day, don’t pay for pick-up fees.
  8. 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.
  9. Double check your address. Some carriers will charge a $10-$15 fee for an incorrect address including items like a wrong suite number.
  10. 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.