Tag Archives: reduce shipping costs

Fast versus Free Shipping – Consumers Weigh In

It’s one of the hottest topics amongst shippers today – how to protect their bottom line from escalating shipping costs while meeting online shoppers’ demands for service. Read our blog for useful tips.

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Do customers always prefer fast shipping, free shipping or both?

by Paula Heikell

It’s one of the hottest topics amongst shippers today – how to protect their bottom line from escalating shipping costs while meeting online shoppers’ demands for service.

“Free shipping” is the answer most often heafree shippingrd as a top reason why shoppers choose certain e-commerce stores. But is it the only reason? Take a look at this insightful infographic provided by eFulfillment and you’ll see that other factors come into play. According to their data:

  • Free shipping is important, but not as important as low prices.
  • 58% of those surveyed want free or discounted shipping, while 28% want to have a choice of shipping options to select from.
  • A good portion of shoppers is willing to accept longer delivery windows for free shipping.
  • It’s still important to provide expedited shipping as an option.

Possible Solution: A Combination of Free and “Conditionally” Free Shipping Programs

Companies such as Craft Supplies, an online retailer of woodworking supplies, are embracing free shipping to gain a competitive advantage but getting creative to address those situations where free shipping is simply too cost-prohibitive.

Fast versus free shipping
Craft Supplies catalog.

“We were the first in our industry to offer our customers a flat-rates 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 Logistyx Technologies’ multi-carrier shipping software system that allowed him to add USPS shipping – a cost-effective alternative to more expensive carriers.

Other Suggestions for Shipping Programs

Other ideas for win-win shipping programs that serve the customer and your company include:

  • Offer free shipping on standard delivery, but charge a premium for premier services such as expedited or time-specific deliveries.
  • Charge for shipping on low-value products and offer free shipping on high-value products.
  • Provide free shipping options if certain carriers are used.
  • Consider using lower-cost regional carriers, as well as the USPS.

If you’re new to the benefits of regional carriers, learn more by downloading our white paper:  Regional Carriers – A Sound Shipping Strategy for a Competitive Advantage.

These are just a few suggestions to consider. You may come up with some other useful shipping ideas by consulting your internal team, visiting your competitors’ e-commerce sites and talking to other shippers who have similar shipping requirements but are not necessarily in your industry.

Fast vs Free eCommerce Shipping InfographicAn infographic by eFulfillment Service

Leverage Technology

The best way to stay nimble in addressing shipping costs is to eliminate manual shipping processes and manage all your carriers on a carrier-agnostic, multi-carrier e-commerce shipping system. You’ll:

  • Speed up shipment processing while reducing labor costs.
  • Be able to respond to changing customer service preferences much more quickly.
  • Have access to good reporting tools that make it easy to track costs, delivery results and more.

For more information on how to implement a multi-carrier e-commerce shipping system to reduce your shipping costs, contact us today.

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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. 

Copyright © 2017, Logistyx Technologies. All rights reserved.

FedEx to Add Surcharges to More Packages

New FedEx Surcharges Highlight the Need to Proactively Scrutinize and Manage Carrier Costs Guest author Seth Kakuske of Veriship shares his insights into the impact of FedEx new surcharges: In its March 16, 2016, conference call to discuss third quarter earnings, FedEx executive vice president, Mike Glenn, described upcoming changes to FedEx Ground handling charges. Currently, an additional handling surcharge […]

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New FedEx Surcharges Highlight the Need to Proactively Scrutinize and Manage Carrier Costs

Guest author Seth Kakuske of Veriship shares his insights into the impact of FedEx new surcharges:

In its March 16, 2016, conference call to discuss third quarter earnings, FedEx executive vice president, Mike Glenn, described upcoming changes to FedEx Ground handling charges. Currently, an additional handling surcharge applies to packages with a length greater than 60 inches. Beginning June 1st, the threshold will be lowered to 48 inches. This adjustment is designed to address three trends in parcel shipping:

    • A shift in consumer buying habits as more consumers are shopping online and purchasing more types of goods, making specific peak days a thing of the past.
    • An increase in home deliveries as more retailers are fulfilling e-commerce orders.
    • An increase in non-traditional items being shipped, such as big screen TVs, mattresses, and new swing sets.

“We welcome this opportunity but it is important that we price these items accordingly to account for the operational complexities such as manual sortation to person delivery et cetera,” Glenn explained.

What Does This Mean for You?

The additional handling surcharge will apply to more of your FedEx shipments, which may result in your average cost per package skyrocketing.

What Can You Do About It?

Start taking control of the situation and driving improvement. The process starts with uncovering and measuring all of the different areas where this change may affect your parcel spend. The key is to control or eliminate the surcharges which are under your control and then work with your carrier to negotiate lower rates on the ones you can’t.

  1. Measure and manage the impact. You can’t manage what you can’t measure, so understanding your total landed cost on a per-package basis is a key performance indicator (KPI) that every business should be monitoring weekly.
  1. Implement operational changes. Once you know the total impact that accessorials are having on your parcel spend, you can begin to take specific action to reduce or eliminate overspend. With “initiative-driven changes,” you pick an accessorial or a surcharge impacting your cost per package, use the current impact per package as your starting point, and set a goal to reduce that figure by X% over the next quarter. Having the data upfront allows you to set a smart goal with a measurable definition of success.
      • Hire a parcel auditing company to recover refunds on the invalid accessorials
      • Utilize address verification software
      • Use appropriately sized boxes
      • Use USPS or similar alternatives for residential deliveries and/or low weight items
  1. Negotiate with your carrier to lower your fees. There will be some accessorials you just can’t avoid. But that doesn’t mean you have to pay sticker price for them. You can negotiate discounts on your accessorials in the same manner you negotiate discounts on your service rates. And just like those service negotiations, the person with the most data is going to win.

Armed with the data you uncovered in Step 1 and monitored in Step 2, you’ll be equipped to sit down with the carrier and negotiate controls around parcel spend. A parcel intelligence platform with a robust, data-driven benchmarking solution can drive you towards an optimized contract, including all surcharges and accessorials appropriate for your level of parcel spend.

Another important component of cost-effective shipping operations is a multi-carrier shipping software system that enables you to accurately capture dimensions and freight rates, and avoid unexpected backcharges.

Thank you, Seth. VeriShip is a cloud-based parcel audit and intelligence company providing innovative parcel audit, intelligence, and engineering solutions.

Source:

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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.

Shipping ROI Tip: Add USPS Online Postage to Your Carrier Portfolio

Online Postage is a Cost-Saver for USPS Shipping, APO Shipping and FPO Shipping Chances are that you already use the U.S. Postal Service in some areas of your shipping operations. But is it integrated into your shipping software system? If you add USPS shipping rates to your multi-carrier shipping system, you could eliminate many time-consuming manual […]

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Online Postage is a Cost-Saver for USPS Shipping, APO Shipping and FPO Shipping

Chances are that you already use the U.S. Postal Service in some areas of your shipping operations. But is it integrated into your shipping software system? If you add USPS shipping rates to your multi-carrier shipping system, you could eliminate many time-consuming manual processes, streamline labor, and reduce shipping costs.

smiling-usps-150x150

The USPS is a cost-effective carrier for online retailers, manufacturers and distributors shipping to businesses and residential addresses. Adding the U.S. Postal Service or Internet postage to your multi carrier shipping software also gives you further opportunities to reduce freight costs by comparing USPS rates with small parcel carrier rates. As many shippers are finding out, the U.S. Postal Service’s postal shipping service also meets their small parcel delivery requirements – often at a lower overall price.

The U.S. Postal Service® offers powerful cost-cutting benefits for small parcel shippers:

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Flat-rate products simplify shipping – Priority Mail Flat Rate service is a simple, time-saving alternative to traditional shipping. If it fits, it ships®* anywhere in the country for a low flat rate. Designed for shipments up to 70 lbs., there’s no weighing, no looking up zones, and no calculating postage. Four box sizes are available to accommodate a wide range of shipments. The USPS also offers international flat-rate options.

No fuel surcharges – Have you really checked your shipping invoices to see what your carrier is charging in added fuel costs? With fuel costs still elevated, business shippers have a strong interest in this USPS® advantage. The USPS does not add on fuel surcharges.

Saturday and residential delivery at no extra charge†. – Currently the USPS delivers packages on Saturday at no additional cost giving you up to 52 extra surcharge-free delivery days a year that you won’t get from competitors.

The USPS doesn’t charge extra for residential delivery – Compared to other carriers, who charge $2.50 or more per delivery, the savings can really add up.

Largest delivery network in the U.S. – The USPS has the largest delivery network in the U.S. and is the only shipper that delivers to PO Box™ and APO/FPO military addresses.

usps_lbl-150x150

Comprehensive delivery tracking – The USPS has significantly enhanced its delivery tracking capabilities for postal shipping. Shipments are now scanned an average of 6 to 7 times to track package movement, providing a high level of visibility to the shipper and their customer.

Customer service is a USPS priority – According to USPS Business Alliances Manager Marcia Sapien, in a recent shipper’s survey, the USPS was the only major shipper to improve in every category, including customer service, on-time performance, delivery performance, claims processing, refunds for late delivery, and pricing.

How real are the savings?

There are a number of ways to put USPS rates to work for you. Ship-IT allows you to compare carriers based on rates, delivery requirements and choose the best option for the order. Ship-IT multi-carrier shipping software is very flexible, and can be installed as an enterprise shipping software system, desktop shipping software system or an SaaS shipping software system.

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Logistyx is a long-standing partner with the USPS. For Ship-IT multi-carrier shipping software customers, adding the USPS rate server and automatic label printing is very simple. Once installed, your staff follows the same shipping routine and simply sees the USPS as an additional carrier option in the rating screen.

To find out more about the benefits of adding the USPS and online postage to your carrier portfolio, contact us today. Our shipping specialists will be happy to assist you.

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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.