The Top 10 Shipping Resolutions for 2021- here is the list you have been waiting for. We all collectively made it out of the wild year that was 2020. Now we look forward to 2021 and hopefully, we can all take the time to evaluate our supply chains and ensure we are being as effective as possible. Without further delay here are the top ten 10 Shipping Resolutions for 2021…
Right size your packaging
Because carriers are consistently lowering their dimensional factors and raising their fees for large packages (additional handling, oversize) it is critical you are shipping your products in the right size container. If your products are not fragile we suggest using a form-fitting polybag or bubble mailer. So shipping products in polybags vs. corrugate is going to be cheaper on the shipping side as the dims are usually much less. If you do need to use corrugate, just be sure you are fitting it as close as possible to your product size. If there is still room in the box use dunnage (craft paper, airbags, biodegradable peanuts, etc.) to ensure your product is not shifting while in transit. This will help to lower your claim rate.
Know your rate changes
During this time of the year, all of the major carriers implement their GRIs (general rate increases). What is published often is not the true impact of the rate changes. Because the carrier’s state average rate changes. So you need to look at the published rates and then apply your discounts to see where the true impacts are on zone and weight. UPS’ new pricing went live December 27th (they are so money hungry they can’t even wait for the new year), FedEx’s new pricing went live January 4th, 2021 and USPS’ new pricing actually went live today, January 24th. You need to know your freight rates, fuel surcharge, and other accessorial charges like residential and delivery area surcharges.
Partner with a Trusted 3PL
Because almost every business reaches a point where they outgrow internal fulfillment for their products. So if are you approaching this zone it is important to take the time to interview and evaluate multiple 3PLs. So get a feel for the leadership team, understand their specialties and limitations, and make sure there is transparency in their pricing. With almost no-fail — you can tell a lot from your first call with a 3PL. The level of energy, engagement, and initial follow-up will tell you everything you need to know. Because these 3PLs usually have better rate structures than you could negotiate directly with carriers.
Charge your customers for shipping
So the days of free shipping are starting to come to an end. It is simply too expensive and there is only so much retailers can raise MSRPs to offset the exploding costs of transportation. You don’t have to be Amazon — the world is no longer expecting free shipping and delivery in 2 hours. The pandemic has helped create some of that mind shift. As long as you are communicating with your customers about shipping delays they will be fine paying a fair, nominal amount.
Consider using a USPS consolidator
A postal consolidator is a shipping company that partners with USPS to offer deeply discounted shipping rates. Typically, the consolidators work to pick up the packages from the shipper and route them directly to USPS (either DDU or NDCs). USPS then completes the last mile delivery for all parcels shipped with consolidators. This relationship works well for all companies involved. The consolidators are better at line-haul required to have national coverage and USPS is already going to every residential address at least six days a week. For these reasons, postal consolidators usually have some of the best rates around. There are many postal consolidators available. Lessgistics highly recommends reaching out to OSM Worldwide if you are interested in learning more about their services. They are deeply integrated with USPS and have more preferential treatment than some other consolidators.
Consider DHL for Domestic
Most well known for their international services, DHL actually rebooted their domestic offerings several years ago after shuttering its domestic branch of the business in 2008. This new division is focused solely on e-commerce shippers. The services are also considered parcel consolidation with USPS delivering the last mile. DHL’s most valued offering is their Smart Mail Parcel Plus product which allows for shipments from 1-25lbs. They offer three different service levels to allow delivery in the ranges of 2-8 days.
Don’t Forget Return Shipping
So nobody likes returns. Not the customer, not the merchant, and not the reverse logistics partner. They are expensive, time-consuming, and can cause customer frustration. Always use a cheap shipping method for your returns like SmartPost or SurePost. Inserting a prepaid return label is a decision each merchant needs to make. It definitely can provide convenience but does it also encourage customers to return more?
Don’t Ignore your LTL Spend
It’s not all about parcel shipping. If you ship LTL (less-than-truckload) palletized freight, then you need to be rate shopping to get the best rates. Never pay ‘street rates’ or even a ‘spot quote.’ You will pay much more for your shipments this way. if you are a small shipper with no buying power, the worst-case scenario you can use a service like freightquote.com which lets you rate shop across their brokered rates with several LTL carriers.
Use Insurance Sparingly
Like most types of insurance in life, declared value insurance on parcels is usually a racket. We only suggest using these services for highly valuable shipments. 99%+ of the time nothing goes wrong from shipping to delivery. Because if you are insuring all your shipments on a blanket level, then you are wasting a lot of money. And remember, you are given up to $100 in retail claim value per package if your shipment is damaged or lost by FedEx or UPS. As long as you file a claim and attach proof of the value of your package (purchase order) you are entitled to this at no extra cost.
Ensure the service matches the customer expectation
You would be surprised how many times we see packages shipped to our fulfillment center in Indianapolis, IN from surrounding states that are sent as a 1,2, or 3-day express service. There is absolutely no reason for this. If you can reach your customers in the same amount of time using a Ground service, then never pay for the Express service! If you quote a 3-day transit to your customer online and can get the package there using UPS Ground, FedEx Home Delivery, or even a Postal Consolidator, then that should be your play.
There is a lot to consider when ensuring you are paying too much for your shipping and fulfillment. These Top 10 Shipping Resolutions will get you started on the right foot. If Lessgistics can help you in any way, please reach out to us below! We have decades of experience in the industry and would love to assist you in optimizing your company’s supply chain.