Here is a Great Tip on How to Save Money on Shipping

My post last week about guaranteed service refunds triggered a number of responses. Steve Thomas, the warehouse manager at Polek and Polek, a leading distributor of copier parts, fax supplies, and printer products, told me how he gets his money back on packages that are not delivered as promised.

Steve sets up every package he ships with an email notification from UPS to inform him of any exceptions. Exception notifications indicate anything that may cause a delay in the delivery of the package. This way he gets an email when a package has been mis-routed or is going to be late. After he is notified, he calls the carrier and asks for a refund. (You can even set it up so that another person gets notified, so you can delegate this task to someone else such as an accounting clerk). UPS and FedEx both offer this service for no charge. Steve saved his company over $2,000 last year by simply doing this.

You can set up your shipping system to notify you of exceptions by selecting the box to be notified. See below for an example.

Steve, thank you so much for sharing your advice!

What are you doing to save money in your shipping department? Please let me know and I will post your suggestions for the benefit of all shippers. You can email me at mark.taylor@myshippingcoach.com.

What Every Shipper Ought to Know About Shipping Refunds, Guaranteed Service Refunds, & Parcel Auditors

You have a guarantee. UPS and FedEx absolutely positively guarantee that your package will be delivered on time or your money back.

There are dozens of parcel recovery companies that are offering to get your money back for parcels that don’t get delivered on time. Should you do it?

Companies like this have been around for a while and there are a few items that shippers ought to know.

1. Parcel auditors generally charge 50% of the actual savings they generate. So if you have a $20 package that was late, they will keep $10. However, most will negotiate based on your volume. Some will take 30% of the savings.
2. Carriers are late about 3% of the time. 97-98% of the time, they are on time. UPS and FedEx do a great job. And, when they are late, it does not mean that the package qualifies for a discount. There are a lot of exceptions, including weather.
3. You must make the request within 15 days that the package was received.
4. UPS & FedEx have put provisions in their agreements that give them the right to charge you for tracking and refund requests. From page 18 of the service guide, “UPS reserves the right to assess a shipper an additional charge of $3 per request for each Package Tracking/Tracing and Refund Request initiate by or at the request of the shipper. This charge will not be assessed for the first 50 package tracking requests per calendar week, or for a quantity of package-tracking request equal to or less than 20% of the shipper’s package volume for that week, whichever is greater. This charge will not be assessed for a quantity of package-tracing requests equal to or less than two percent of the shipper’s package volume for that week. UPS also reserves the right to assess the shipper a charge in the effective UPS Rates for Service Guarantee refund requests when the subject package was delivered in accordance with the applicable UPS Service Guarantee in the effective UPS Tariff/Terms and Conditions of Service.”
5. In addition, if the request was made by a third party, such as a parcel auditing company, they don’t have to give it back. “UPS reserves the right to refuse any request for a credit or refund when such request is either (a) made by, or (b) based on information obtained by, a party other than the payer of the shipping charges.” (p 30) “At the sole discretion of FedEx, the money-back guarantee may not be honored when the request is made by, or the information utilized to determine the status of the package is determined by, a third party other than the payer of the charges.” (p 138)

There are a few options that I would suggest.

1. Get reports from your carriers that show what percentage of your packages were delivered late. If it does end up being 2 or 3 percent, when you are negotiating, ask for an additional 2-3 percent discount.
2. Many shipping systems can track and generate reports of packages that are late. Sort it by dollar amount and have one of your own clerks request refunds on the packages that cost a lot of money. This way you get 100% of the money back.
3. Have your accounting clerk review the invoices from the carriers. Ask for them electronically and determine which ones were late. Talk to your carrier representative about which reports can help you.

I know that this is a controversial subject and I invite your feedback. What are you doing about promises that have not been fulfilled about your packages?

Reduce Parcel Shipping Costs; Get Your Money Back for Service Failures

In today’s fast-paced world of e-commerce, instantaneous communications and unscrupulous deadlines, demands on the shipping industry have never been greater. At the same time, customer expectations, fueled by the promises of the major carriers, continue to grow. Bottom line: Packages have to get there; on time; every time.

In PARCEL
magazine’s 2009 Best Practices Survey, service failures were one of the top five complaints that shippers had about their primary carrier.

UPS and FedEx dominate the industry to the tune of nearly $100 billion annually in combined net sales by promising to absolutely, positively deliver packages on time for their customers. But, are they holding true to their word? While the carriers guarantee every package will be delivered on time, in reality they are actually late 3% of the time for no verifiable reason at all; they don’t fall within the “beyond our control” exceptions such as bad weather or shut down airports. Moreover, the carriers make it both complicated and time-intensive to claim refunds, especially for companies shipping dozens of packages a day. As a result, a mind-boggling $2 billion of guaranteed refunds go unclaimed each year!

This money represents a failure to meet a performance bond; it is supposed to be returned to the customer, as recompense for the shipping customer¹s inability to meet a delivery promise to its own customer. But how many of you have ever seen a carrier “volunteer” a credit on your shipping invoice for any late-delivered packages?

The only means by which shippers can actually confirm on-time deliveries is to track their packages; and despite first impressions, that is the last thing the carriers want you doing.

Worse, in practice, the carriers are imposing an expensive, time consuming, intricate claims gauntlet in order to secure an allowable refund. Try it sometime. It isn’t easy. The drill goes something like this:

1. You must supply full shipping information, not just the tracking number, but the consignee’s name and address; city, state and zip; date package was shipped out; and package weight.
2. Next, you must determine the actual promised delivery for the class of service you purchased, then match it against actual delivery. This takes a search of disjointed sources and the ability to interpret color-coded ground maps, the carrier¹s service guide or information accessed through the Internet. You supply the time and money and staffing for this not as easy as it sounds exercise.
3. Now, you present your claim through the carrier¹s 1-800 number, which typically takes from 5 to 15 minutes per package.
4. Sit back, relax, you’ve earned it. If the refund shows up on your next weekly invoice.

What can you do about this?

1. Track your packages and call manually for late deliveries.
2. Invest in computerized shipping software that can track your packages for on-time delivery.
3. Hire a third party to get refunds on your behalf (they typically charge half).
4. Re-negotiate your contract and ask for a better discount based on your percentage of service failures.

Shippers should hold small parcel carriers to their word, namely, their guarantees that: “your packages will arrive on time or your money back.”

On Time Package Delivery Guarantees Are Over or Ending Soon!

FedEx gets the credit for inventing guarantees of delivery. Who can forget, “When it absolutely, positively has to be there overnight?”

All packages that were shipped by FedEx, UPS, and DHL were guaranteed to be on time or your money back, including packages shipped ground.

Until now.

DHL eliminated service guarantees as of November 17, 2008 on packages shipped within the US.

UPS does not guarantee ground shipments that are “picked up or scheduled to be delivered during the period December 1 through December 31.” So that could mean anything after next Monday, November 24 is not guaranteed.

FedEx guarantees do not apply if the “package was tendered for transportation during the 14 calendar days before Christmas”. According to my calculations, that means anything shipped after December 10 is no longer guaranteed to be on time.

The US Post Office guarantees delivery of Express Mail to most destinations 365 days a year – even Sundays and holidays.

The guarantee is based on the origin and destination zip codes and the time that the package is dropped off. You can go the USPS Commitment Calculator to find out about your specific situation.

Most people don’t even ask for their money back or even check if their item was delivered when promised. Delivery guarantees will be back soon and you will find out more in future blogs.