by Rian Carr, Senior Partner at Lamprey Systems
What you may not know, is costing you. You’ve seen it, or you’ve felt it. The swelling figure on your financial statements and P&L; the graphs and charts boldly pointing to the amounts of money you spend on shipping. Or, maybe it’s just a feeling you have that the shipping bills are always creeping up.
Well, it’s not a hunch. It’s reality. According to Small Business Trends, USPS raised their rates an average of 9.5 percent, while UPS and FedEx each raised their rates 4.9 percent as of January 1, 2016. These increases mean one thing, less money for your business. So what can you do when you’re stuck with paying more and more for small parcel shipping, but can’t always pass that cost through to your customer and stay competitive? What’s this rumor that you can’t afford professional logistics consultation?
Here are some answers:
1. Ask for help. There are more and more logistics professionals and companies in your network every day. The really good ones will give you great advice, they will work on contingency, not cost you any money and save you a lot. Look for companies that have a long track record and preferably ones that have a local presence. Good logistics people will be an asset to your company, not a cost.
2. Get control. Know what service you’re choosing and know if it’s the right one for your product and zone. Have a clear understanding of your incentives, volume discounts and where you can leverage the best rate along with the right service type. Just being aware of the basics will help you minimize time and error.
3. Talk to Neighbors. Benchmark your rates against other businesses in your network. It’s a great way to check if your rates are good, or not so good. You can get professional benchmarking done with a good logistics company, or you can talk to businesses, friends and colleagues. Either way, you’ll get a quick sense of where your company stands in relation to other businesses and maybe get some leverage for the next time you talk with your carrier rep.
4. Audit Audit Audit. If it’s important to your business, it’s probably being audited. Your shipping bills are no different. A small parcel auditor will give you amazing benefits, top-notch insider intelligence and will show you refunds from UPS/FedEx that you aren’t getting. The best ones will work for free (contingency only) and they’ll usually find things you’ve never thought of. It’s a no-brainer!
5. Use metrics to run your business, not your hunches. Shipping is too costly, too risky, and usually a shipping problem, leads to a customer problem. We don’t like those! If you want to keep customers happy and grow at the same time, use people that live and breathe the business of shipping to bring you options, metrics, intelligence and most of all savings.
Shipping is becoming more complex and more costly every day. You don’t have to outsource your shipping to stay competitive, but to be efficient, you must get control of it.
Rian Carr, Senior Partner
60 West Broad Street
Small Parcel Auditing – LTL / Freight Management – Metrics – Transportation Management Systems