Smart Shipping Made Easy

All posts by admin

Survey: 28% of Online Businesses Not Aware of Dimensional Rating Costs

Have You Compared Your 2015 Shipping Invoices to 2014 Lately? You May Be Surprised A large portion of online businesses are still unaware of what dimensional weight rating is and how it works, even though the FedEx and UPS new dimensional rating programs may be taking a huge bite out of their profits. Endicia recently […]

Read More...

Have You Compared Your 2015 Shipping Invoices to 2014 Lately? You May Be Surprised

A large portion of online businesses are still unaware of what dimensional weight rating is and how it works, even though the High shipping CostsFedEx and UPS new dimensional rating programs may be taking a huge bite out of their profits.

Endicia recently surveyed over 700 businesses to understand how they felt about the FedEx and UPS dim weight pricing and found that 28 percent of online businesses surveyed hadn’t heard of dimensional weight pricing.¹

This means many businesses are unaware of just how much their freight bill can or already has increased. Lightweight shipments present some of the biggest spikes in shipping costs. For example, the Wall Street Journal estimates that under the new pricing model, shipping an eight-pound, 32-pack of toilet paper between 601 and 1,000 miles will increase by 37%.² Industry estimates predict that roughly one-third of shipments will be impacted by this change.

Additionally, 74 percent of businesses disagree with dimensional weight pricing because they believe it is expensive and unfair to businesses and shippers. So what do businesses plan on doing now that they are faced with these price hikes?

Going postal: 80% say they will use the U.S. Postal Service® for their larger, lightweight packages.

USPS shipping priority mailUnlike FedEx and UPS, The U.S. Postal Service (USPS) did not increase shipping costs in January 2015. In fact, it reduced Priority Mail rates, making it an affordable option for businesses to ship heavier packages, up to 40 pounds. Lastly, the Postal Service does not apply dimensional weight pricing to packages up to one cubic foot in size. For more details, see ADSI’s recent blog about USPS 2015 Proposed Pricing. For more results from Endicia’s survey, check out the infographic here.

Easy Solution: Add USPS to Your Multi-Carrier Shipping Software System

Now is the time to evaluate your shipping costs, carrier portfolio and your shipping software system’s ability to automatically compare USPS rates and services with your other carriers. You may also want to consider adding regional carriers for certain areas of your customer network, as these carriers may offer rates/services as Select_Shipping_System-Small-126x150much as 40% lower than national carriers’ rates. For information on how regional carriers can support your business, download ADSI’s whitepaper, “Regional Carriers: A Sound Shipping Strategy for Competitive Advantage.”

As always, if you have questions about optimizing your carrier portfolio so that you can compare all carriers/services on one shipping system, ADSI is here to help. Contact us today for a complimentary consultation.

¹ Jessica Foth, “The Results Are In: Businesses Say They’ll Switch to the USPS Due to FedEx and UPS Dimensional Weight Pricing,” Endicia Blog, 1/21/2015.

² Maria Haggerty, “How Retailers Can Adapt to Dimensional Weight Pricing Change,” multichannelmerchant.com, 9/15/2014.

Large Insurance Provider Reaps Big Benefits with Logisytx Campus Shipping Solution

Large Insurer Automates Processing One Million Non-Warehouse Shipments For this large insurance company, responsive small parcel shipping is a must. Every day, nearly 70,000 employees and more than 20,000 agents work together to support sales and customer service activities. Product and service information is typically sent out via small package delivery from the Company’s network of 24 corporate offices, […]

Read More...

Large Insurer Automates Processing One Million Non-Warehouse Shipments

For this large insurance company, responsive small parcel shipping is a must. Every day, nearly 70,000 employees and more than 20,000 agents work together to support sales and customer service activities.

Product and service information is typically sent out via small package delivery from the Company’s network of 24 corporate offices, operations and service facilities.

Challenge

The company wanted a more efficient, cost-effective way to handle the high volume of non-warehouse small package shipments being sent from offices and other locations. The existing process was manually driven.

They opted to roll out Logistyx Technologies’ Ship-IT™ multi-carrier shipping software solution in all corporate locations, operational and support centers.

“Logisytx software was performing well in our regional service facilities where we process 5,000 to 7,000 shipments per day,” said the company’s business automation analyst and project team leader, “We decided it would work well in all our locations.”

The Logistyx shipping solution has deliver operational and financial benefits.

Benefits

  • Automated the processing of one million non-warehouse shipments per year
  • Eliminated manual, paper driven processes related to shipment processing, tracking and cost analysis
  • Gave all employees access to easy carrier rate shopping so they can choose lower cost options
  • Gained company-wide visibility over all shipping activity
  • Freed up staff to perform other duties rather than hiring additional employees or temporary staff

Download the full case study 

Please contact us for a complimentary consultation today. You can contact us by phone at 877-755-2374 via email at info@logistyx.com.

Five Tips to Minimize Dimensional Rating Costs

There is no foolproof way to completely avoid the higher shipping costs the new dimensional rating programs will incur. However, you can start taking steps now to minimize the impact as much as possible. Following are five recommendations that can help control costs.

Read More...

Be Proactive – Five Tips to Minimize Dimensional Rating Costs

Tips to Minimize the Impact of National Carriers’ New Dimensional Rating Programs

It seems that everyone is talking about the new FedEx and UPS expanded dimensional rating programs. The general consensus appears to be that most companies, particularly B-to-C shippers, are bracing themselves for higher – in some cases, much higher – freight bills.

Unfortunately, there is no foolproof way to completely avoid the higher shipping costs these dimensional rating programs will incur. However, you can start taking steps now to minimize the impact as much as possible.

Following are five recommendations that may help reduce the impact:

1. Eliminate manual packaging decisions.

When the packing decision is left up to the staff on the fulfillment lines, it can be tough to make sure every order is consistently packed in the most cost-efficient carton or box. Whether an order is packed in a larger box than necessary or stuffed so full that the carton bulges, you run the risk of incurring higher freight charges. One way get control over packaging costs is to add cartonization software to your order fulfillment system. This will ensure the most cost effective packaging decision is consistently applied, and also accelerate workflow.

It’s also wise to re-evaluate the information exchange between your order entry, warehouse management and shipping system to determine if the collective systems share enough decision data to automate the carton decision process. We’ve seen numerous companies create an integration plan that allows them to automate and embed business rules into the fulfillment process to ensure the right packaging decision every time, based on the customers’ shipping preferences, product details and delivery options.

 

2. Consider adding regional carriers to your portfolio.

Is a national carrier really the only option for every order you fulfill? Or is possible to meet certain customers’ delivery requirements via a regional carrier? Savvy shippers are already exploring the benefits of using regional carriers.[i] Mikel Mobley, Director of Sales for OnTrac, a regional carrier serving the eight Western States, noted “Shippers are looking for delivery alternatives. Since our rate structure remains unchanged, we are able to offer a significant discount over the national carriers’ expanded dimensional programs. If every shipper evaluated their customer concentration and their options for regional carriers, they would find the savings can be considerable.”

The optimal foundation for an expanded carrier portfolio is a carrier agnostic shipping software system that enables you to add national, regional, local and international carriers onto the same platform. Without this, it is virtually impossible to ensure that you’re choosing the lowest-cost carrier service that can meet your customers’ delivery requirements.

 

“The reality is that a multi-carrier shipping software system is more important than ever,” said Rick Jones, president and CEO of regional carrier Lone Star Overnight (LSO), “But too often, legacy or standalone shipping systems offering just a single carrier are left in place because the warehouse staff is most familiar with them and thus perpetuating the status quo. Meanwhile, thousands of dollars are left on the table because the shipper lacks the ability to compare multiple carrier services and rates at once and select the best service and cost option for each and every shipment.”

Jones is also an expert on comparing the benefits to be weighed in considering regional versus national carriers. To learn more, request a copy of our whitepaper, “Regional Carriers: A Sound Shipping Strategy for Competitive Advantage.”

 

3. Shipment consolidation – is it more possible than you presumed?

This question goes out to the B-to-B shippers who may be facing shipping cost increases as a result of the new dimensional rating program. “We’ve been analyzing our customer delivery network, and we’ve found that a portion of B-to-B shippers may also be caught in this net,” said Jones.

If this is the case, reevaluate your fulfillment system and use shipment consolidation software to ensure that you’re able to consolidate shipments wherever possible. If your shipping system does not have freight consolidation capabilities, this may be a red flag. Having the ability to consolidate your shipments and also simultaneously rate multiple carriers’ dimensional weights rules to your shipment can help reduce the impact the new dimensional rules will have on your business.

4. Will shipping minimums help?

Many companies have implemented incentives such as “free shipping for orders over $75.” For orders below a certain limit, the customer pays for the shipping. Has your organization run the numbers to see if this is a viable option to controlling costs? One company, Craft Supply, implemented this program as a customer incentive program and control shipping costs and it worked very well. 

5. Consider other options to shipping.

Many retailers are considering other options to shipping as well. For example, some retailers with brick-and-mortar presence are offering in-store pickup and/or ship-from-store. This is more convenient for customers as they don’t have to wait to receive their goods and also reduces shipping costs for merchants. However, a successful ship-from-store or in-store pickup system requires integrated e-commerce software that can consolidate the order management function.[ii]

Be Proactive – Develop a Dimensional Rating Strategy Now

The new dimensional rating programs are going to cause tremendous change in the way shippers manage their small parcel deliveries. The best way to prepare for this ‘brave new world’ in parcel shipping is to be proactive. Begin now. As you analyze your customer delivery network, your carrier portfolio and your technology platforms, chances are good that you’ll uncover new alternatives that will yield significant savings, without compromising service.

Questions?

As a leading provider of carrier agnostic shipping solutions, Logistyx Technologies shipping software solution includes a large carrier library of national, regional, postal and international carriers. Please contact us today to explore how a carrier-agnostic shipping system can help you combat rising shipping charges.

Logistyx Technologies is a provider of carrier-agnostic e-commerce fulfillment software and shipping software solutions that enable shippers to manage all their small parcel, LTL postal, regional, national and international carriers on one platform. We also help companies automate their reverse logistics process for greater efficiency and lower cost. Contact us today. 

Copyright © 2017, Logistyx Technologies. All rights reserved.

[i] Read our blog post: “Factors to consider in Evaluating Regional Carriers.”

[ii] See more at the saleswarp.com blog: http://www.saleswarp.com/order-management/working-around-shipping-costs/#sthash.LzBcMyuB.dpuf

What Happens When You Use the Wrong Shipping Label

We talk so much about enabling technology in distribution operations that it’s easy to overlook the little things that play a big part in creating a smooth supply chain. Labels. That’s right, labels.

Read More...

Is it Possible to Choose the Wrong Shipping Label? Yes!

It’s ironic, really. We talk so much about the benefits of enabling technology such as computer-guided order fulfillment software, smart shipping software and real-time package delivery tracking software that it’s easy to overlook the little things that turn out to play a big part in creating a smooth supply chain.
Labels.

That’s right, labels. They’re pretty small in physical size, but they can wrinkled-barcode-labelcreate very large problems when they’re not doing their job correctly. Are you certain the labels you’re using perform well? Or are they costing you time and money as they move through your supply chain?

The right labels not only deliver the right impression and durability – they can prevent unnecessary and premature wear and tear on your printers.

As we’ve learned from many shippers, when they’re having problems with labeling, the costs in both hard dollars and customer satisfaction escalates very quickly. We commonly receive calls from companies dealing with issues related to poor reading or scanning quality, durability and printer jams due to label feeding issues.

It’s important to get it right. Labels are the final link between your company and your customers, consumers, partners and regulators.
If you haven’t audited your label stock for performance lately, it’s a good idea to do so. We’d like to help:

1. Download our new whitepaper,Selecting the Right Label.” OurADSI-Zebra-Selecting-the-Right-Label-Whitepaper icon
partner, Zebra Technologies, has put together an easy-to-read and helpful whitepaper that will answer many of your questions and help you resolve some issues that you’re already encountering.

2. Call Logistyx to talk to a label media expert. ADSI has dedicated label printing specialists on staff who can answer your questions, help you troubleshoot issues and find the right solution for your specific operational needs. We can also help you complete a helpful label audit to uncover hidden opportunities for improvement that you may have overlooked.

Logistyx is also an Authorized Zebra Maintenance & Repair Provider. If you’re having problems or need service on your Zebra printers, we’re here to help.

Questions?
Call ADSI at (877) 755-2374 or send an email to info@logistyx.com today.

###

Logistyx Technologies is a provider of carrier-agnostic e-commerce fulfillment software and shipping software solutions that enable shippers to manage all their small parcel, LTL postal, regional, national and international carriers on one platform. We also help companies automate their reverse logistics process for greater efficiency and lower cost. Contact us today. 

Copyright © 2017, Logistyx Technologies. All rights reserved.

Four Hidden Dimensional Rating “Gotcha’s” To Avoid

It’s more important than ever to ensure that you’re doing everything possible to eliminate operational oversights that can result in dimensional rating back charges. Find practical tips here.

Read More...

Control Shipping Costs by Eliminating Hidden Dimensional Rating Gotcha’s

Many freight carriers and logistics service providers have their own dimensioning systems to automatically measure package dim weights and calculate freight charges when the shipments reach their facilities.

However, recent announcements by FedEx and UPS to expand their dimensional rating programs make it more important than ever to ensure that you’re doing everything possible to eliminate operational oversights that can result in dimensional rating back charges.

Seemingly minor differences in calculations can result in significant back charges from the carrier.

Discrepancies can occur for several reasons, including:

  • Actual carton measurement discrepancies: One of our customers found that the carton measurements they were using to calculate freight costs actually differed from the carrier’s measurements for the same cartons.
  • Carton shape: The volume used to calculate the dimensional weight may not be absolutely representative of the true volume of the package, depending on the shape of the package. The carrier will measure the longest dimension in each of the length, width and height and use these measurements to determine package volume. If the package is a right-angled box, this will be equal true package volume, but if it is any other shape, the volume calculation will be greater than the true volume of the package.
  • Data entry errors: For example, the shipping clerk processes a 20-pound package measuring 20” x 20” x 20” but forgets to add the dimensions. The resulting charge is $20.00. However, when the box reaches the carrier’s facility, its equipment picks up the dimensions and calculates the dimensional rate at $40.00. You will be billed back for the difference of $20.00. These errors, added up over a year’s time, can amount to thousands of dollars in back-charges.
  • Packing processes: Do not overpack orders – it can easily result in back charges. For example, you pack a carton so full that it causes the size to bulge and you report a 20 lb. carton at 20” x 20” x 20” for a freight charge of $40.00. However, the carton actually bulges out to 22” x 22” x 22”, so the carrier’s dimensional system calculates freight charge to be $45.00.

Best Practices to Eliminate Dimensional Rating Back Charges

  • Consider adding a dimensioning system, integrated with your shipping system. There are a variety of dimensional systems available to accommodate a wide range of operations. If you’re not sure if it fits your needs or where to start, our system specialists can help you determine a configuration that is best for your fulfillment environment.
  • Eliminate data entry errors related to dimensions. Replace the keying of box sizes with barcode scanning. Many of our customers print a template of barcoded carton sizes for each carton type. The shipping clerk scans the barcode instead of keying in numbers – and potential upcharges related to incorrect measurements are eliminated.
  • Integrate box types into the order process. Set up your box sizes as a series of codes that can be passed from the order system and passed to your shipping system. If you’re using an automated order packing solution like Pack-IT, the operator can scan a carton type as they are packing the order.
  •  Audit your inventory of carton types and sizes. Make it a regular practice to verify all of your carton or box types and compare them with your carriers’ measurements of the same. This can prevent back charges from occurring on future shipments.

These best practices can help you control “after the fact” shipping charges.

The question remains, how to control the proportion of your shipping volume that will be subject to dimensional rating.

Unfortunately, there’s no simple answer to this challenge, which will face many B-to-B and particularly B-to-C shippers. One best practice is to implement a multi-carrier shipping software system solution that allows you to easily add other carriers who will not apply dimensional rating to all of their shipments. We’ll cover this in our next post. In the meantime, we’d be delighted to discuss your dimensional rating questions with you. Please contact us today.

Learn More

New Pricing Addresses Industry Trend, Promotes Packaging Efficiency and Environmental Responsibility,” UPS, June 17, 2014.

Tough love” or power grab? FedEx’s shift to dimensional pricing is in eyes of the beholder,” DC Velocity, May 12, 2014.

###

Logistyx Technologies is a provider of carrier-agnostic e-commerce fulfillment software and shipping software solutions that enable shippers to manage all their small parcel, LTL postal, regional, national and international carriers on one platform. We also help companies automate their reverse logistics process for greater efficiency and lower cost. Contact us today. 

Copyright © 2017, Logistyx Technologies. All rights reserved.

Ship Free or Die: Is Free Shipping Inevitable for Online Retailers?

Is Free Shipping a ‘Must’ for Online Retailers? It doesn’t take long in the online retail world for trends to go viral. Buyers quickly jump on cost-saving perks, and “free shipping” is one of the hottest perks today. Amazon, Zappo’s and other leading retailers may have lead the way, but today’s buyers now expect online […]

Read More...

Is Free Shipping a ‘Must’ for Online Retailers?

It doesn’t take long in the online retail world for trends to go viral. Buyers quickly jump on cost-saving perks, and “free shipping” is one of the hottest perks today. Amazon, Zappo’s and other leading retailers may have lead the way, but today’s buyers now expect online retailers of all sizes to offer free shipping. “It’s almost as if you have to recognize that that’s part of doing business from the consumer’s perspective, and it’s built into the margin of the retailer.” Marshal Cohen, NPD Group

“Stores are not just being nice; it’s a tactic, and a necessary one these days,” said David Lewis, author of “The Brain Sell: When Science Meets Shopping.” Online retailers are working hard to keep buyers on the site toship free or die complete their online purchase. According to Lewis, an estimated 68% of online shoppers abandon their carts before checking out – for all kinds of reasons including better pricing on a competitors’ site, issues with website navigation and additional charges such as taxes or shipping.¹

 

Free Shipping Here to Stay?

It is according to Endicia General Manager Amine Khechfe. “Like it or not, free shipping is here to stay,” Khechfe said. “We conducted a survey this past year on online shopping habits, and consumers listed free shipping not only as the biggest influencer when shopping online, but also as the most important shipping option and the aspect of ecommerce they’d most like to see improved in 2014.”²

A recent survey by Deloitte found that 71 percent of shoppers expect free online shipping and 47 percent expect free returns. Faced with such news, today’s shippers can no longer expect to go about “shipping as usual.” While it’s true that some industry sectors may be less affected by the free shipping phenomenon than others, it’s wise to explore what it will take to launch such a program before your competitors do.

 

“Conditional” Free Shipping Programs

Companies such as Craft Supplies, an online retailer of woodworking supplies, have opted to embrace the trend toward free shipping to gain a competitive advantage. “We were the first in our industry to offer our customers a flat-rate shipping program of $7 for orders up to $150 in value and free shipping for orders over $150 in value,” said Don Dafoe, Vice President of Marketing and IT for Craft Supplies, “To manage this marketing program cost-effectively, we needed to upgrade our shipping system and processes.” Dafoe chose to implement ADSI’s multi-carrier shipping software system that allowed him to add USPS shipping – a cost-effective alternative to more expensive carriers.

Other options include:

  • Offer free shipping on standard delivery options and charging for premier (such as faster or time-specific) delivery services
  • Charge for shipping on commodity or low-value products and scale delivery pricing to offer free shipping on high-value products
  • Provide free shipping options if certain carriers are used

These are just a few ideas. In addition to consulting your internal team, find out what your competitors are offering and seek advice from other shippers who are not necessarily in your industry.

 

Use Regional Carriers to Compete on Shipping Costs and Speed of Service

Shippers should also consider expanding their carrier portfolio to take advantage of cost-savings offered by regional carriers. Regionals can often pass along to customers savings of 10% to 40% over UPS and FedEx pricing. Most regional carriers transport packages via truck hubs instead of airlines. Trucking can be as little as 10% of airline costs. Many regional carriers also assess fewer surcharges and can offer faster deliveries for a lower cost.

Carriers such as LaserShip, for example, have built their business by focusing on the last mile and time sensitive deliveries up and down the East Coast, from Miami to Maine. By building their operations in this way, they’ve gained the ability to excel in a specific niche while keeping tight control over operating costs. This strategy allows them to customize their services in ways that national carriers cannot always readily match.

This approach of focusing within a certain geographic region and/or business specialty can translate into a winning advantage for shippers who leverage the strength of a regional carrier’s network.

For example, a medical equipment manufacturer approached LaserShip to see if the carrier could gain a service advantage over its competitors by reducing its average 5-to-6 day transit time on orders going from Florida up to New England. “We were able to help this shipper by providing a later pick up time and by injecting their packages directly into one of our regional sort facilities,” said Tom Mara, Director of Sales for LaserShip, “This shaved one to two days off his transit times. In addition to the faster delivery, we were able to extend a rate that achieved a cost savings.”

Online retailers are able to offer free shipping and other lower-cost items because they have lower margins, said Marshal Cohen, chief retail analyst at New York-based NPD Group. They don’t have to pay rent, they tend to have fewer employees, and they don’t have to pay insurance on the store.³

But traditional retailers who venture into the e-commerce world will have to compete. “It’s almost as if you have to recognize that that’s part of doing business from the consumer’s perspective, and it’s built into the margin of the retailer,” said Marshal Cohen, chief retail analyst at New York-based NPD Group.4

 

Draw on Your Shipping Partners’ Expertise

There are many ways to tackle the “free shipping” challenge. In addition to drawing on your internal team’s expertise to create a program, consult with your shipping system provider and your carriers. Depending upon your product and customer mix, there may be other lower cost shipping services available that you haven’t been using. Also, invite regional carriers and the USPS in to discuss your goals. In many cases, they’ll bring options to the table that may not be available with national carriers.

If you need assistance identifying regional carriers, ADSI can help. Our shipping system Carrier Library includes a wide range of carriers covering the U.S., Canada and overseas deliveries.

 

Additional Reading

 

¹ Danielle Braff, “Free Shipping Delivers Customers: Wise Retailers Heed Growing Expectations,” Chicago Tribune, May 8, 2014.

² Ina Steiner, “Online Selling Trends 2014: Free Shipping or No Free Shipping?” EcommerceBytes, February 3, 2014.

³ Danielle Braff.

4 Danielle Braff.

 

Copyright © Advanced Distribution Solutions, Inc. All rights reserved. For reprint permission, please contact info@adsionline.com.