10 WAYS TO
GET CONTROL OF
YOUR SHIPPING—
TODAY
©2015 Neopost USA Inc. All Rights Reserved.
Agenda
•
How did we get here?
•
Ten ways to control your shipping—starting today!
•
What carriers look for when determining your discounts?
•
Key takeaways/wrap-up
•
Q&A
©2015 Neopost USA Inc. All Rights Reserved.
2
How Did We Get Here?
•
•
•
Parcel rates increase
substantially every year
Shipping typically
constitutes 3-7% of a
company’s annual
revenues
The U.S. Parcel market
is close to $80 Billion
dollars!
U.S. Domestic & International
Parcel Market: $80Bn
U.S. Domestic & International Ground Parcel
U.S. Domestic Air Parcel
U.S. Air Parcel Export
2%
36%
62%
Source: Morgan Stanley Transportation Survey, 2014
©2015 Neopost USA Inc. All Rights Reserved.
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Step 1: Reduce the Use of Air Waybills
Step 1: Reduce or Eliminate Air Waybills.
‒
‒
‒
‒
‒
‒

Air Waybills—paper forms to
handwrite
Carriers manually key in
information
#1 source of address corrections
#1 source of shipping-related fraud
Carrier automation bonus discounts
Incorrect weight = Dimensional
Weight charge (more on this later)
Solution
Automated shipping system
− Auditing invoices for fraud and
address errors
−
©2015 Neopost USA Inc. All Rights Reserved.
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Step 2: Annual Parcel Rate Increase
Step 2: Understand that an announced 4.9% annual parcel
increase may not be 4.9%.
‒
For some weight breaks, it is much higher
Weight
2016 Year Over Year Increase
1-5 lbs
5.8%
6-10 lbs
5.5%
11-15 lbs
5.4%
16-20 lbs
5%
21-50 lbs
4.8%
51-70 lbs
4.0%
71-100 lbs
3.6%
101-150 lbs
3.0%
√ Solution:
− Know the weights of your actual shipments when discussing discounts with your
carriers
©2015 Neopost USA Inc. All Rights Reserved.
*Analysis of carrier’s publicly available 2015 and 2016 ground parcel rates
5
Carrier Increases: 2016
What’s been announced for 2016
 A 4.9% increase, on average, for air and ground shipments starting January 4th,
2016
 Fees & Surcharges are increasing substantially more than 4.9% Year Over Year
(more on this later)
Service
Average increase (all
weights)
Early AM Overnight
4.69%
Overnight
6.05%
2Day AM
7.60%
2Day
7.67%
Saver (3 Day)
7.34%
*Analysis of carrier’s publicly available 2015 and 2016 air parcel rates
©2015 Neopost USA Inc. All Rights Reserved.
6
Step 3: Signature Deliveries
Step 3: Determine if you really need signature delivery on a
shipment
•
Signature as delivery confirmation?
•
Signature charges range from $3 to nearly $6 per
package



•
Adult Signature Required
Direct Signature Required
Indirect Signature Required
USPS® Electronic Return Receipt (eRR): $1.40
versus $2.80 for traditional paper Return Receipt
from the USPS (for Certified Mail® signature
delivery shipments)
•
An electronic delivery confirmation receipt with
the USPS is $0.75

Solution:
−
Utilize email notifications with tracking numbers with major carriers, USPS Electronic
Return Receipt (eRR) or electronic delivery confirmation receipt unless a signature is
absolutely needed.
©2015 Neopost USA Inc. All Rights Reserved.
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Step 4: True Delivery Needs
Step 4: Examine the True delivery need of your recipients.
‒
‒
‒
‒

Time your recipient REALLY needs package
delivered?
Is recipient around when package is delivered?
Time definite versus day definite
Can ground be utilized instead of air delivery to
get to a recipient?
Solution:
− Utilize tools that show the delivery times for services and the cost.
− Start to examine Ground and USPS work share products for even next day
deliveries.
©2015 Neopost USA Inc. All Rights Reserved.
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Step 5: Shipping Label
Step 5: Create a shipping label ONLY when needed.
•
Manifested not shipped—can still charged
for shipment!
Charges for return labels

Solution:
•
Only create a shipping label for a shipment
when it will actually be shipped
− Package is not shipped = void the shipment
− Utilize reports for keeping track of
shipments
− If you are a UPS shipper, ask to be placed
on “scan-based billing”
−
©2015 Neopost USA Inc. All Rights Reserved.
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Step 6: Department Cost Centers
Step 6: Assign department cost centers/controls for EVERY
shipment.
−
“Magical increase” in shipping
charges in November/December?
Bill back = right charges to right
departments?
Who is paying for shipping?
√
Solution:
−
−
−
Institute business rules and
technology—mandate users to
input department cost centers
©2015 Neopost USA Inc. All Rights Reserved.
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Step 7: Thursday/Friday Factor
Step 7: Learn how Thursday/Friday affects “overnight” &
2-Day delivery.
−
−
−
“Overnight” or “next day” shipped on
Friday = Monday delivery
Two Day service shipped Thursday =
Monday delivery
Saturday (air) delivery selected = $15$16 per shipment
√ Solution:
NEVER utilize a Saturday service
unless it is truly needed
− Understand your true delivery
objective on a shipment
−
©2015 Neopost USA Inc. All Rights Reserved.
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Step 8: Impact of Inbound Shipments
Step 8: Determine the impact of inbound shipments to your
organization.
•
What is the process flow of a shipment
reaching a recipient?
•
Impact of a shipment’s arrival to work getting
done?
•
Organizational cost of personal shipments:
‒
Swiss Post Solutions study*
•
•

75% of Employees Ship Personal
Packages to Work Locations
20% of employees do so at least one to
two times per week
Solution:
Determine the process flow of a shipment arriving at various points of the
day and getting to the intended recipient.
− Set policies for personal shipments.
−
*November 2015 Swiss Post Solutions Study; used with permission from Swiss Post Solutions
©2015 Neopost USA Inc. All Rights Reserved.
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Step 9: Surcharge Impact
Step 9: Understand every surcharge.
− Do these charges add to your
shipping cost?








Delivery Area Surcharge (DAS): $2.3022.50 per package
Additional Handling Surcharge: $10.50
per package
Address Correction: $13.00 per package
Ground Weekly Pickup Fee: $12.50-25*
Declared Value**(minimum): $3.00
Residential Surcharge: $3.25-3.65 per
package
Missing or Invalid Account Number: $13
per shipment
Third party shipping: 2.5%
*depends on revenue spent per week
**$1.00 per $100 of value
©2015 Neopost USA Inc. All Rights Reserved.
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An Overview of Carrier Increases:
2016
An overview of the increases in surcharges for 2015 for one major carrier’s air and
ground parcel services
Surcharge
Service
2015
2016
Percentage
Increase (2016)
Additional
Handling
Air & Ground
$9.00
$10.50
16.7%
Address
Correction
Air & Ground
$12.50
$13.00
4.0%
Declared Value
Air & Ground
$0.95
$1.00
5.3%
Delivery Area
Surcharge
Air & Ground
$3.55
$3.70
4.2%
Indirect
Signature
Air and Ground
$3.50
$4.25
21.4%
Weekly Pickup
Fee
Ground
(if shipping charges
> $75, $11.30; if <
$75, $22.60)
(if shipping charges
> $75, $12.50; if <
$75, $25.00)
10.6%
Oversize
Air and Ground
$57.50
$67.50
17.4%
Unauthorized
charge
Air and Ground
$57.50
$110
91.3%
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Breakdown of Surcharges:
One Customer’s Pain
©2015 Neopost USA Inc. All Rights Reserved.
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Step 9: Surcharge Impact
 Solution:
‒
Understand which charges are
avoidable
‒
Audit your invoices regularly
AND CONTACT YOUR CARRIERS
FOR REFUNDS!
‒
Assign cost centers and pinpoint
the users, recipients and
services that are causing the
greatest increase of cost
‒
Give regional carriers, the USPS
and “work-share” last mile
products a second look
©2015 Neopost USA Inc. All Rights Reserved.
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Step 10: Education
Step 10: Educate people in your organization about the
preferred services and carriers to use.
Is everyone using the preferred carrier or service?
‒ Do you know how much of your shipping you are paying for versus thirdparty or your recipient?
‒ Do your discounts increase when more people use the preferred carrier?
‒ Do people understand the impact of “just sending this one shipment”
overnight?
‒
Does everyone who ships have a valid account number?
‒ Who do you want to have shipping privileges?
‒
Do people in your organization understand the impact of
Dimensional Weight changes?
©2015 Neopost USA Inc. All Rights Reserved.
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Step 10: Education
 Solution:
‒ Communicate preferred carrier
and services
‒ Understand your carrier
contract
‒ Implement tools that restrict
shipping privileges, including a
“request to ship”
‒ Make the necessary changes to
accommodate for Dimensional
Weight rating
©2015 Neopost USA Inc. All Rights Reserved.
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Assessing Discounts:
What is the ideal package to a carrier?
Lower Chance of
Carrier Discount
High Daily Volume
Average parcel weight
Better Chance of
Carrier Discount
√
Low Weight
Heavier Weight
Express/Overnight Deliveries
√
Many parcels picked up at one
stop
√
Number of pick-up locations
Many
Few
Commercial vs. Residential
Delivery
Residential
Commercial
Many parcels delivered at one
stop
Type of shipment contents
√
High Claims
Utilizing Carrier Packaging
Low Claims
√
Seasonal
Seasonal
Non-seasonal
Ground Distance
Short
Long
Air Carrier Distance
Long
Short
©2015 Neopost USA Inc. All Rights Reserved.
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Key Takeaways
 How prepared are you for changes to parcel shipping, such
as Dimensional Weight and new surcharges?
 Are you implementing technology tools to increase
visibility?
 Are you evaluating shipping and recipient delivery and cost
NEEDS versus services?
 Are you educating the right people in your organization
about the right services to use?
©2015 Neopost USA Inc. All Rights Reserved.
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• Appendix:
Dimensional Weight
©2015 Neopost USA Inc. All Rights Reserved.
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DIM Weight: An Unavoidable
Occurrence
What is Dimensional Weight?
DIM =
weight
L" x W" x H" (parcel’s cubic volume)
volumetric divisor (parcel’s density) 166
It was inevitable…
–
–
Price Increase Based on Package Sizes
Common Sense
• Shipping Companies = Cube (Vehicles
+ Fuel + Facilities) + Labor
©2015 Neopost USA Inc. All Rights Reserved.
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Dimensional Weight Rounding
•
Calculating the Dimensions
‒
Box Measurement
•
•
•
(parcel’s cubic volume)
volumetric divisor (parcel’s density) 166
Calculating DIM WEIGHT
‒
•
11.6” = 12’’ (UPS)
11.6” = 11.6” (FedEx)
L" x W" x H"
13.66” x 13” x 13.3 = 14.23”
(always round to dim weight of 15”)
A shipper is billed the greater of
actual weight or dimensional
weight
‒
‒
Based on outside box dimensions
It’s the dimensions of the box WITH
PRODUCT INSIDE that matters
©2015 Neopost USA Inc. All Rights Reserved.
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