Turn Your Shipping Into A Profit Center
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Turn Your Shipping Into A Profit Center

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Turn Your Shipping Into A Profit Center Turn Your Shipping Into A Profit Center Document Transcript

  • Turn Your Shipping into a Profit Center Shipping is a critical customer satisfaction tool, and running a responsive shipping department requires significant investment. Fortunately, that investment is recoverable. The shipping department can be configured in a way that can turn a profit. Ways to accomplish this range from good planning to creating detailed business rules for your shipping software. Here are eleven areas to look at: 1. Eliminate surprises. For example, the wrong address on a shipping label can result in an address bill-back, adding at least $5 to the cost of shipping the package. Even more painful is the cost of supplying wrong dimensions to a carrier. The additional cost on a larger box could easily result in a $40 surcharge that you most likely could not recoup from your customer. Also, address validation programs can help identify discrepancies before the customer completes the order. 2. Choose the appropriate carrier and service level for the appropriate job. Make sure your business rules select carriers based on all the discounts your carriers have made available. Consider setting up your system to use the post office for residential or rural delivery where extended-area fees may apply, or materials are less time-sensitive. Another example is cost-effective Saturday delivery: FedEx Home and USPS offer free Saturday delivery. 3. Negotiate contracts with your carriers that provide the best savings. Every surcharge usually is negotiable, including fuel surcharges. Also, rates can be based on your seasonal shipping patterns. Getting the best rates can be achieved without changing your shipping processes. 4. You do not have to pass on your carrier incentive rates to your customers. All or part of them can be used to cover other shipping overhead costs. Your system
  • should be able to determine the level of order visibility for your customers. 5. Make tracking information readily available to customer service. This improves productivity and makes for happier customers. Ask your shipping system provider if they supply a tracing and tracking utility. 6. Take advantage of quot;freebiesquot; offered by your carriers, such as free shipping materials. Carriers often will give away labels, envelopes and boxes if you ship with them. They also often can provide discounted or free hardware such as scales, scanners or printers. 7. Collecting detailed information, such as duties terms, prior to shipping internationally can result in significant savings. Having information for commercial invoice and other customs paperwork available at order entry can help avoid costly bill backs. The best time to accumulate this information is when it comes into your system rather than when it leaves. 8. Pick the right service level. Most carriers have several service levels, and business rules should be configured to select the best one. Some service levels will get your shipment there just as fast as premium ones. Ask your software provider to configure your shipping system to furnish detailed time and transit information for all service levels. 9. Create reports that boost productivity and control costs. An example, one tracks pickers and packers to identify bottlenecks in the warehouse. When relevant information is shared with other departments you can identify opportunities for efficiencies and savings. 10. Don’t ignore LTL carriers as you configure a more productive shipping system. Build in routing tables and create the ability to rate shop. You can consolidate orders that may be better suited for LTL. Or you can adopt break-bulk shipping and truck to a geographical area before using to-the-door carriers. 11. Build business rules that help employees be more productive. There is no reason a shipping-line worker should have to look up addresses or make phone calls to double check information. More sophisticated business rules also can automate decisions taking into account variables such as value, insurability and speed.
  • If your shipping platform has the flexibility to take advantage of these cost-savings tactics, it can, in fact, become a profit center.