Blog Posts Accurate Data Key to Controlling Parcel Shipping Costs
Key Takeaways
- The latest round of parcel rate and surcharge increases poses a significant burden for most retailers and ecommerce companies.
- To understand – and mitigate – the potential cost impact for your business, you need accurate shipping data.
- Weight and dimensional data are particularly critical.
Most parcel shippers should budget for a net impact of 8 to 9 percent.
In her new column for Multichannel Merchant, Megan Rudolph, Senior Director of Parcel Operations at Saddle Creek Logistics Services identifies some of the key factors contributing to this impact and explains how capturing good data can help you better manage parcel shipping costs.
Following is an excerpt…
With Rising Parcel Costs, You Need Better Data
How can you measure the net impact of changing rates and surcharges? It all starts with good, accurate data.
The main cost drivers are service, zone, weight and dimensions. Service and zone are relatively straightforward, but issues related to incorrect weight and dimensions are quite common. (Thanks to recent changes in dimensional weight rates, dimensions are now just as important as weight and apply to nearly all shipments.)
To capture good data, you need the right processes in place at the point of shipping, often as part of the pick process. Explore methods to capture, automate and audit package weight and size. Accurate data can then be input into your OMS, WMS and/or TMS and shared with your carriers.
The 2021 published general rate increase (GRI) for FedEx and UPS is 4.9 percent. However, most parcel shippers should budget for a net impact of 8 to 9 percent.
Good data is also necessary if you want to leverage rate-shopping software. The system selects the least-cost service based on the information you provide. If the package weight/dimensions are missing or incorrect, the shipping charge that is selected by the rate shop will be different than the actual charge from the carrier.
While more companies are improving their capabilities with regard to parcel data, there is still a big gap. Many lack the robust systems and parcel analytics platform or business intelligence (BI) tool required to capture and interpret the data. They may also be short on subject matter experts who are up to speed on the latest changes and able to apply them correctly. If you fall in this category, it may be time to invest in these resources or partner with a third-party provider who can supply them.
To learn more about the latest increases from major parcel carriers and how you can use data to your advantage – read the full article.
