Shipping is an important factor that effects your profitability. It is important to understand your shipping costs and control these if you can. Here are a few tips.
1.) Most Importantly Ship the Correct Products to the Correct Shipping Addresses the First Time
It seems rudimentary but it really pays to make sure you have the correct procedures in place so you do not incur the shipping error expense. If you cannot afford a real-time wireless warehouse management system and bar-coding solution in your operations, at minimum you should not only double check each shipment but have specific individuals “checkers” bless any shipment before it goes out. Compare it to the original order and make sure the address is validated. Feel free to check out our blog What Dreaded Shipping Errors can cost you.
2.) Negotiate Your Shipping Rates With Your Chosen Carriers and Welcome Another Shipper to the Party
It is absolutely worth the time and efforts to negotiate your shipping costs with your carriers. Arm yourself with information such as the number of shipments you handle on average, the types of shipments, the services you offer your clients and additional data. You will be surprised at the difference in pricing offered by multiple carriers based on your location, shipping volume, ship-to locations and more. In some cases (although unusual) we’ve found up to a 37% difference between the lowest rate shopped and highest.
3.) Shop for Rates Between Carriers and Automate the Shipping Process
By using a rate shopping tool such as the solution we offer, your customer service or warehousing team members can spot check in real-time your rates for a specific shipment. In our system a sales person can select a specific ship method for an order and it will follow the process all the way through fulfillment. It takes the guess work away from busy warehouse personnel and prints the appropriate shipping labels, pack lists, Bill of Ladings, ASN’s (Advance Shipping Notifications) and even customer specific documentation and populates the correct data. This saves you time and money because you are not hand-writing information or using several systems or shipping stations based on carriers.
4.) If You Do Offer Free Shipping – Don’t Use the Most Expensive
Free shipping seems to be a part of modern life. However, some of the most intelligent companies we work with (especially parcel shippers) leverage the lower cost services to process free shipments. An example is, two major carriers work with USPS® to finalize a shipment in specific areas. These shipments are considerably cheaper. You should, however, communicate this to your customer and offer other alternatives for a nominal fee. This not only saves you time and money but comes across as excellent customer service because you are offering choices based on your customer’s needs. If you have not read it yet, check out our blog Free Shipping, Let’s Keep This Real.
5.) Consolidate Orders and Consider the Packaging
“One fell swoop” means money saved. Take a look at your orders. If you have multiple orders from the same client with the same ship to address, by all means consolidate those orders. You also may want to take advantage of carrier offers. Several shipping carriers offer pricing based on the box vs. the weight which offers a money savings incentive. You also may benefit from filling a truck vs. a partial load. So if your customer can afford to wait for a little more time it may make sense to wait until you can fill an entire truck. Some of our clients have negotiated with carriers to simply leave their containers at their shipping docks and pick them up at the end of the day.
6.) Try Local Carriers or Other Resources
You would be extremely surprised at the number of companies that offer shipping services. Most often, your local carriers will be willing to offer discounted pricing for you. You can also check airlines if they offer Cargo Pricing incentives. Make sure you check into the track records of the company you select for shipping orders and ensure their reputation for reliable delivery service is intact.
7.) Speaking of Customers – Talk to Them
If your long time clients are as business savvy as you, they will understand that it’s healthy for both of you to control costs and be profitable. Many of our clients negotiate shipping terms with their customers to make sure everyone wins. Our shipping solution allows you to use predefined FOB and Shipping Rules for specific customers. This includes using their shipper account, a freight rate mark up dollar or percent and more.