Deadly Shipping Practices

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National Postal Forum, Washington DC ‘04

Ten Deadly Shipping Practices,

And How To Avoid Them!

Presented By:

Melissa Kunde, Director of Business Development

Doug Caldwell, Vice President

AFMS Logistics Management Group


Handwritten Airbills


Handwritten Airbills$10.00

$9.20

$9.90

$12.50

$3.50

$10.00

$45.45 in correction fees - $9.65 shipment is now $55.10


Handwritten Air bills

Deadly practice• Poor handwriting can result in

address correction charges• Forget to check desired service

level - Automatically defaults to Priority Overnight

• Missing account numbers, zip code etc…

• Soft cost – It takes time to fill out • Some contracts exclude

handwritten air bill from discounts

Solution• Computer generated airbills

– Online Shipping @ carriers website

– Shipping systems

• Quicker

• Order preprinted airbills

• Eliminates mistakes


Handwritten Airbills

• There is ONE EXCEPTION…– Multiple-piece shipments


Multi-piece Shipments

• If you ship two or more pieces to the same address, AND the total weight is 100 LBS or more, you receive Hundredweight pricing

• Also known as “shipment” pricing• Need to use special Multi-Package Air bill• Must be “same day, same service, same address”


Multi-Piece Airbills

Example: 6 boxes from Portland to Washington DC, total weight is 253 LBS, shipped FedEx 2Day

• Boxes range in weight from 18 to 80 LBS, 3 of the boxes require Additional Handling charge

• Shipped as 6 individual boxes with separate air bills, total cost is $698.90

• Shipped on a single multi piece air bill, total cost is $506.00


Selecting The Wrong Envelope

Deadly Practice• Using company envelope • Failing to make sure your contract offers discounts for letters• Overstuffing – will cost you more depending on the carrier!

$18.85

$28.75


Overpaying for International Shipments

Deadly Practice:

• Failing to get a discount on international shipments in your carrier contract

• Failing to us USPS when appropriate

Solution: Global Priority Mail, Global Express Guaranteed (GXG)


Overpaying for International Shipments

• Example: 8 OZ letter, US to Japan• UPS Worldwide Expedited, guaranteed delivery in

two to five days, published cost is $43.00• FedEx International Economy, guaranteed delivery in

four to five business days, published cost is $40.74• Global Priority Mail large flat rate envelope, delivery

in four to seven days, cost is $9.00


Using Air When Ground Is Just As Fast

2 Day Air

2 Day Ground

UPS $ 19.18 $5.39

FedEx $ 17.90 $5.39

Washington DC to Chicago - Zone 4 10lb Parcel


Failing to Monitor Invoices for Overcharges & Contract Compliance

Deadly Practice:• Miscalculated Zones• Failing to check for delivery failures• Miscalculated Dimensional Charges• Possible misuse of your account number• Failing to verify that correct rate and accessorials are loaded

Solution:• Ask carrier for reports (electronic & hard copy)• Track your shipments and charges independently


Shipping Multiple Packages When One Will Do

Deadly Practice:

Example: Two parcels (14 LBS total) shipped UPS ground from Washington DC, shipped to the same Los Angeles CA customer on the same day

Solution:But if these two cases are boxed in to one 14lb. Shipment, the single UPS shipping cost is:

Shipped individually, non-discounted UPS costs are:

Savings: $2.95=28%

$6.44

$7.19DC Los Angeles

DC Los Angeles

Zone 8

Zone 8

$10.68

$13.63


Girth

Big Parcels Now Receive Big Penalties

Length


Carrier Maximum Limits

OS1 OS2 OS384" Length & Girth 108" Length & Girth 130" Length & Girth

UPS 30 Lbs. Min 70 Lbs. MinMin $90 (Air) 90 Lbs. Min (Ground)

FedEx 30 Lbs. Min 50 Lbs. Min 90 Lbs. Min + $30

DHL 30 Lbs. Min 70 Lbs. Min 90 Lbs. Min

USPS None None Max 130" L + G


Too Many Carriers

Deadly Practice:

• Splitting business between too many carriers

Solution

• Fewer carriers reduces administrative burden and cost of carrier management, while capitalizing on the most basic of transportation economics

– When it comes to carriers less is more: leverage your total parcel buy and turn your carriers into partners

• Improved service levels

• Lower total cost of transportation operation


Failing to Hit Your Target Tier

Deadly Practice:

Weekly missing your target tier can cost will at least cost you 30%

Zone Bands Band Incentives

Determination

ALL $0.00- 0- Gross Charges per 0.0% (0%) Off list rate

$10,399.99 70% week

Gross Charges per 10.4% (70%) Off list rate$13,369.99 90%

week

TARGET $13,370.00- 90% Gross Charges per 14.9% (100%) Off list rate

$14,855.00 $16,339.99 110% week

$16,340.00- 110% + Gross Charges per 15.4% (103%) Off list rate

week


Selecting The Wrong Packaging Material

Deadly Practice:

• Shipping parcels in Styrofoam, wood, metal etc…

• Using string, plastic banding

• Cost: $5

Solution:

• Corrugated cardboard box & tape

• Pressure-sensitive packing tape, minimum 2" width

• Water-activated paper tape, 60-lb. grade, minimum 3" width

• Water-activated reinforced tape


Relying on Carrier to Design Your Contract

Deadly Practices:

• Unclear bargaining position – Not knowing your business better than the carriers – total cost per parcel

• Starting negotiations with a RFQ or RFP

• Accepting the first offer

• Unaware of carrier services, terms or margins

• Relying on carrier to define your tier levels and rolling-averages

• Guessing or estimating each pricing term item

• Starting negotiations when your current small parcel agreement is about to expire!


Relying On Carrier To Design Your Contract

• Gather and analyze your shipping patterns and profiles before you engage the carriers

• Allow for plenty of time for negotiations

• Tell the carriers precisely how you want the contract to be structured

Solution:


[email protected]

[email protected]

800-246-3521

Postal Forum Exhibit Hall Booth 666

Thank You!

Deadly Shipping Practices

Business

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