Date post: | 29-Nov-2014 |
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www.afms.comwww.afms.com
National Postal Forum, Washington DC ‘04
Ten Deadly Shipping Practices,
And How To Avoid Them!
Presented By:
Melissa Kunde, Director of Business Development
Doug Caldwell, Vice President
AFMS Logistics Management Group
www.afms.comwww.afms.com
Handwritten Airbills
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Handwritten Airbills$10.00
$9.20
$9.90
$12.50
$3.50
$10.00
$45.45 in correction fees - $9.65 shipment is now $55.10
www.afms.comwww.afms.com
Handwritten Air bills
Deadly practice• Poor handwriting can result in
address correction charges• Forget to check desired service
level - Automatically defaults to Priority Overnight
• Missing account numbers, zip code etc…
• Soft cost – It takes time to fill out • Some contracts exclude
handwritten air bill from discounts
Solution• Computer generated airbills
– Online Shipping @ carriers website
– Shipping systems
• Quicker
• Order preprinted airbills
• Eliminates mistakes
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Handwritten Airbills
• There is ONE EXCEPTION…– Multiple-piece shipments
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Multi-piece Shipments
• If you ship two or more pieces to the same address, AND the total weight is 100 LBS or more, you receive Hundredweight pricing
• Also known as “shipment” pricing• Need to use special Multi-Package Air bill• Must be “same day, same service, same address”
www.afms.comwww.afms.com
Multi-Piece Airbills
Example: 6 boxes from Portland to Washington DC, total weight is 253 LBS, shipped FedEx 2Day
• Boxes range in weight from 18 to 80 LBS, 3 of the boxes require Additional Handling charge
• Shipped as 6 individual boxes with separate air bills, total cost is $698.90
• Shipped on a single multi piece air bill, total cost is $506.00
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Selecting The Wrong Envelope
Deadly Practice• Using company envelope • Failing to make sure your contract offers discounts for letters• Overstuffing – will cost you more depending on the carrier!
$18.85
$28.75
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Overpaying for International Shipments
Deadly Practice:
• Failing to get a discount on international shipments in your carrier contract
• Failing to us USPS when appropriate
Solution: Global Priority Mail, Global Express Guaranteed (GXG)
www.afms.comwww.afms.com
Overpaying for International Shipments
• Example: 8 OZ letter, US to Japan• UPS Worldwide Expedited, guaranteed delivery in
two to five days, published cost is $43.00• FedEx International Economy, guaranteed delivery in
four to five business days, published cost is $40.74• Global Priority Mail large flat rate envelope, delivery
in four to seven days, cost is $9.00
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Using Air When Ground Is Just As Fast
2 Day Air
2 Day Ground
UPS $ 19.18 $5.39
FedEx $ 17.90 $5.39
Washington DC to Chicago - Zone 4 10lb Parcel
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Failing to Monitor Invoices for Overcharges & Contract Compliance
Deadly Practice:• Miscalculated Zones• Failing to check for delivery failures• Miscalculated Dimensional Charges• Possible misuse of your account number• Failing to verify that correct rate and accessorials are loaded
Solution:• Ask carrier for reports (electronic & hard copy)• Track your shipments and charges independently
www.afms.comwww.afms.com
Shipping Multiple Packages When One Will Do
Deadly Practice:
Example: Two parcels (14 LBS total) shipped UPS ground from Washington DC, shipped to the same Los Angeles CA customer on the same day
Solution:But if these two cases are boxed in to one 14lb. Shipment, the single UPS shipping cost is:
Shipped individually, non-discounted UPS costs are:
Savings: $2.95=28%
$6.44
$7.19DC Los Angeles
DC Los Angeles
Zone 8
Zone 8
$10.68
$13.63
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Girth
Big Parcels Now Receive Big Penalties
Length
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Carrier Maximum Limits
OS1 OS2 OS384" Length & Girth 108" Length & Girth 130" Length & Girth
UPS 30 Lbs. Min 70 Lbs. MinMin $90 (Air) 90 Lbs. Min (Ground)
FedEx 30 Lbs. Min 50 Lbs. Min 90 Lbs. Min + $30
DHL 30 Lbs. Min 70 Lbs. Min 90 Lbs. Min
USPS None None Max 130" L + G
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Too Many Carriers
Deadly Practice:
• Splitting business between too many carriers
Solution
• Fewer carriers reduces administrative burden and cost of carrier management, while capitalizing on the most basic of transportation economics
– When it comes to carriers less is more: leverage your total parcel buy and turn your carriers into partners
• Improved service levels
• Lower total cost of transportation operation
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Failing to Hit Your Target Tier
Deadly Practice:
Weekly missing your target tier can cost will at least cost you 30%
Zone Bands Band Incentives
Determination
ALL $0.00- 0- Gross Charges per 0.0% (0%) Off list rate
$10,399.99 70% week
Gross Charges per 10.4% (70%) Off list rate$13,369.99 90%
week
TARGET $13,370.00- 90% Gross Charges per 14.9% (100%) Off list rate
$14,855.00 $16,339.99 110% week
$16,340.00- 110% + Gross Charges per 15.4% (103%) Off list rate
week
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Selecting The Wrong Packaging Material
Deadly Practice:
• Shipping parcels in Styrofoam, wood, metal etc…
• Using string, plastic banding
• Cost: $5
Solution:
• Corrugated cardboard box & tape
• Pressure-sensitive packing tape, minimum 2" width
• Water-activated paper tape, 60-lb. grade, minimum 3" width
• Water-activated reinforced tape
www.afms.comwww.afms.com
Relying on Carrier to Design Your Contract
Deadly Practices:
• Unclear bargaining position – Not knowing your business better than the carriers – total cost per parcel
• Starting negotiations with a RFQ or RFP
• Accepting the first offer
• Unaware of carrier services, terms or margins
• Relying on carrier to define your tier levels and rolling-averages
• Guessing or estimating each pricing term item
• Starting negotiations when your current small parcel agreement is about to expire!
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Relying On Carrier To Design Your Contract
• Gather and analyze your shipping patterns and profiles before you engage the carriers
• Allow for plenty of time for negotiations
• Tell the carriers precisely how you want the contract to be structured
Solution:
www.afms.comwww.afms.com
800-246-3521
Postal Forum Exhibit Hall Booth 666
Thank You!