Modern shippers face more risks than the industry ever imagined. According to Jeff Berman of Logistics Management, 71 percent of shippers believe the greatest focus for small package shipping is cutting costs. Meanwhile, 37 percent are concerned with their ability to meet delivery timelines, and the ability to track and trace packages has become part of the equation for most customers and 85 percent of shippers. Yet, shippers can reduce costs in small package shipping by following these best practices.
1. Audit Small Package Shipping Carrier Invoices.
The simplest way to cut all costs down is not overpaying for services. While this may seem obvious, shippers have a tendency to overpay carriers between 1 and 3 percent, explains Jared Fisher of Lojistic. Shippers must audit all carrier invoices, but since this process can be quite time-consuming, it is best to use a transportation management system that completes auditing automatically.
2. Compare Different Modes of Shipping.
Shippers often do not consider how different modes of shipping can actually be involved in small package shipping. Since many small packages may be shipped to various areas, it seems easy to pay for shipping of each item. However, even small shipments need to be compared for cost savings.
3. Use Automated Data Capture and Analysis to Catch Errors Before Shipping.
Automated data capture and analysis systems can catch errors before and as they occur. Automated scanners and machine-to-machine connectivity via the Internet of Things should be used in all small package shipping processes. This provides real-time insight and verification of contents throughout the shipment from picking to loading and final delivery.
4. Consolidate Packages Where Possible.
It seems like small packages can fit anywhere, so they should be able to be sent on the smallest truck. In reality, the ability to consolidate small shipments makes them perfect for less-than-truckload and consolidated full truckload shipping.
5. Create a Competitive Environment.
When a small shipper negotiates shipping options with carriers, it should not mean the small shipper is at the mercy of the bigger partner. These shippers need to work on making their markets competitive by growing customer bases and increasing accountability throughout the organization. As a result, the larger carrier will be more inclined to provide lower rates if volumes are expected to increase.
6. Learn What Dimensional Pricing Is and How to Apply It to Your Operation.
Shippers must learn what dimensional pricing is, how its models perform against traditional, class-based shipping models, and how to apply the principles of dimensional pricing to increase profits. This helps to eliminate unforeseen changes in the pricing model in the future.
7. Look Beyond the Big Carriers.
Since the “Big Carriers” are focused on global transit, regional carriers can give your customers the service and prices needed to be competitive in smaller markets. This helps to drive competition between big and small carriers, which produces cost savings for shippers.
8. Look at Delivery Guarantees.
Air shipping may seem like the obvious choice for getting products to consumers as quickly as possible. However, air shipping may not be the definitive solution. Shippers should look at the delivery guarantees on all small package shipments.
9. Make Sure Address and Shipping Information Is Correct.
Incorrect address or shipping information accounts for the majority of problems with delivery schedules. A package may be directed to the incorrect regional center, delivered to the wrong address or worse. In other words, shipments to countries outside of the U.S. need to follow address standardization for each specific area, which are kept by the Universal Postal Union.
10. Package Shipments Appropriately.
Shipments should not be packaged in any just any fashion. Each shipment should be packaged carefully to reduce the risk of broken or damaged items. Shipments should be condensed into the smallest package possible, and the items should be placed in an appropriate filler material to prevent damage from drops or falls.
11. Verify Shipment Items Are Not Restricted.
Shippers must ensure all small packages adhere to restrictions and hazard requirements at the time of packaging. As a shipper, your organization could be decimated if you allow a single restricted product to cause countless damages to other products and people due to your willingness to look the other way.
12. Eliminate Extra Work Where Possible.
Extra work is the symbiotic parasite of small packages. Small packages mean more details for each shipment, but you can eliminate extra work in small packaging as well. Rather than picking-to-tote, pick-to-box to eliminate the possibility of mistaken shipments or missing items.
13. Know What Carrier Packaging Requirements Are and Adhere to Them.
All packages should adhere to the packaging requirements for the respective carrier. This may include the taping of all seams or adding three standard lines of tape across both the top and bottom parts of a box.
Shippers are moving toward small packaging shipping, and more customers are ordering individual items online and in the store. Although small packaging traditionally represents an increased cost to the shipper, shippers can negate this risk and achieve a positive return on investment by following these best practices in all small packaging shipments.