Five Tips to Offset Parcel Rates

As purchases through ecommerce channels continue to grow, delivery costs increasingly weigh heavily on the minds of merchants. Major parcel carriers are increasing ground shipping rates annually and during the holiday season. Rates can be raised as high as 10 percent. How can you get a handle on your delivery expenses? Here are a few suggestions:

Dimensionalize All Your Goods

The space your items take up in a truck is now as important as its weight. Carriers like UPS and FedEx use dimensional weight pricing that charges you based on package size or weight — whichever is greater. Dimensional weight considers the amount of space your package occupies (calculated by length, height and width then divided by 166). This number is then compared with the actual weight of the package. Your rate is based on the larger number.

Make sure your packaging is designed so that there is no wasted space between your item and the outer package. You might be able to negotiate the DIM divisor, too.

Use Address Verification to Avoid Further Charges 

Address correction charges can really add up, not to mention delay deliveries, irking customers. Ensure that your parcels are going to a legitimate and accurate address; don’t send it to a “drive” if it’s an “avenue” and make sure the right zip code is displayed properly for sorting accuracy. If your shipper has the capability to pre-sort for the carriers in their distribution center (DC), you can get later pickup times as well as faster transit. The shipper can get zip codes for certain regions of the U.S. and bypass the sort centers. This is highly recommended.

Look Into Zone Skipping

This will drive down per unit transportation costs. Consolidate parcels or orders by destination zone and ship them in larger, full truckload (FTL) shipments versus partial (LTL) shipments.

Consider Adding Regional Carriers to Your Network

Regional carriers can offer the same service levels as major parcel carriers but at a lower rate. During peak seasons, like holidays, these carriers can also be flexible with weekend DC pickups. A regional carrier can also hit one-day transit points that the ground services of national carriers might not. And they’ll negotiate a lot of the accessorial fees that help reduce residential surcharges, delivery area surcharges and higher DIM factors.

Conduct an Invoice Audit on Your Freight Expenses

You might learn that you’re being overcharged, or that you aren’t being charged the contractually agreed upon rate. Were your items delivered on time? Make sure you’re paying for delivery successes — not failures.

Take advantage of this parcel tips today! For more information, contact us online or by phone at 800.475.0917. FIDELITONE is ready to help.