By Ivan Brewington
surcharges also apply to rural deliveries outside metro areas. } Impact per package: $3.60 - $4.85, depending on the carrier. } Cost-saving alternative: Offer to pick up at your own store, FedEx office, or UPS Store. There is also a discount if the item is shipped to the customer’s workplace instead of their home. Fuel surcharge. The indexed-based surcharge is tied to the average price of diesel fuel as listed by the U.S. Energy Administration. } Impact per package: 6.25 - 7.75% } Cost-saving alternative: Fulfill the order closer to the customer. Options include shipping from fulfillment centers, implementing a ship-from-store model, utilizing a 3PL (third-party logistics provider), or zone jumping. Again, pick-ups can be made from a store or FedEx office, and discounted rates can be realized when shipped to a customer’s workplace.
COST-SAVING TIPS TO MINIMIZE PARCEL SHIPPING SURCHARGES Surcharges continue to have a draining impact on shippers’ bottom lines, but there are ways to stem the tide.
ue to the increasing complexity of ground parcel shipping rates, it’s quite possible that many shippers may not be aware of the potential surcharges to which their packages are being subjected. According to the Reveel Group, a shipping logistics consultancy, approximately 35% of a company’s shipping expenses are surcharges. As a result, the impact to your bottom line can be significant. You may also be damaging the relationship with your customer, who may choose to look elsewhere to minimize shipping costs. Understanding what these surcharges are — and how they are applied — can
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be a powerful tool to help you potentially minimize costs and retain the business necessary to grow. We’ve identified three main areas of cost impact to support your planning. Let’s take a look at some scenarios of how those attributes drive the surcharges and the cost-saving alternatives for each situation. Additional Delivery Expenses First, it is crucial we understand the incremental cost surcharges to deliver the package. Residential delivery and delivery area surcharges impact any delivery to a location that is a home, including a business operating out of a home. Delivery area
Package Characteristics Several surcharges are related to the physical attributes of a package, such as: The dimensional weight surcharge is calculated in inches, as follows: length x width x height/139 (the standard divisor used by parcel carriers, rounded up). The dimensional weight is used as the billable weight when it is greater than the actual weight impact. } Impact per package: A maximum rate increase of 111% for a one-cubic foot box } Cost-saving alternative: Reduce box size. Evaluate alternatives such as kraft or poly mailers, mailer boxes, or a mailer automation. Also review your product size and any secondary packaging, such as a folding carton, to see if there are ways to reduce dimensions. The additional handling surcharge comes into play when the parcel weight is more than 70 pounds, the length is greater than 48 inches, or the package width exceeds 30 inches. This also impacts odd-shaped packages, such as those that are cylindrical, or products that are not fully encased in the outer carton, as well as soft-sided packs with dimensions greater than 18x13x5 inches. } Impact per package: $13.50 - $14.25
PARCEL March/April 2019