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Issue Date: August 2011, Posted On: 8/22/2011
Three Fundamental Actions to Take in Preparation for the Holiday Shipping Season
By Elizabeth Lombard
This is the calm before the storm. The fast-approaching holiday shipping season has all the markings to match
the extreme weather the US has experienced since the brutal snowfalls of the last holiday season. According
to a recent Forbes Magazine article, shopping online is about to explode. Online businesses, as well as brick
and mortar ones, are setting up to catch the biggest piece of the consumer buy as possible. Competition is
expected to increase among merchants as businesses, not in the ecommerce niche, find ways to integrate into
the online space. The momentum matters to small retailers and e-tailers for whom access to even just a small
percentage of the buying activity in peak season can determine if they sink, swim or dog-paddle.
Now more in tune with shopping patterns and consumer preferences, many retailers - including e-tailers - are
expanding product offerings, adding free shipping and beginning to reach out to customers through social
media. The season promises to be both hectic and competitive for those who are in the game. To be among
the successful, you need to ensure you are in an optimum state of preparedness. Here are a number of things
you must consider or evaluate to ensure your business comes out on top.
Evaluate Processes
Ask yourself: Are your outbound and inbound (return options) processes functioning as efficiently as possible?
Or, are there bottlenecks that can negatively impact cash flow or hinder communications? Relative to
outbound package processes, the most effective systems are those that seamlessly integrate functions
including order entry, shipping, and invoicing and customer service. Integrated systems link order
management and ship requests to the shipping department, getting packages processed and the invoices
generated, more quickly. Integration also enables more effective communication through message alerts and
email, thus enhancing customer satisfaction while reducing customer inquiries.
To remain competitive, and/or to simply better manage expenditures, even if you apply shipping and handling
fees to your invoices or charge-back shipping costs to another department, look to leverage solutions that
maximize carrier selection. Carriers would not only include the “big two,” but also regional carriers, local
couriers and the Postal Service. For businesses that offer free shipping, carrier selection and, specifically,
service levels within carriers, becomes even more critical. Shippers need to find an acceptable balance in
meeting the delivery expectations of the recipient against the carrier costs.
For small volume shippers, online shipping and postage solutions can help better manage costs and speed
package processing. These shipping solutions allow you to ship directly from your business or home office and
can save a small business a significant amount in annual postage costs by leveraging USPS discounts and
commercial pricing versus paying the retail price you would otherwise pay at the counter.
Web-based shipping solutions also allow you to access reporting and tracking details from wherever you are,
adding another level of convenience. You can take advantage of free package pickup at your location when
using Priority or Express Mail.
For retailers/e-tailers and businesses that must manage the return of packages, the package return process
not only plays a critical role in inventory management, but also in customer satisfaction. For example, certain
shoppers may be more likely to do business with a retailer if there is a “no hassle, free returns” policy. There
are multiple vendors that assist businesses with their return package processing, as well as carriers that offer
return options and the USPS which offers parcel return and merchandise return services.
Evaluate Shipments
Package size can have a huge impact on shipping costs. Sometimes shippers limit their package/box options
simply to reduce inventory management issues associated with ordering and storing cartons and boxes. Or
perhaps they re-use boxes. However, the drawback to such practices is that larger boxes, those exceeding a
cubic foot or three cubic feet depending on the carrier or service level, can have a drastic impact on shipping
costs. So if you currently fill boxes with all sorts of peanuts, paper or bubble-wrap to prevent shifting of
contents, consider having a larger inventory of containers and boxes, for “just right” packaging. An
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appropriately sized box could make the difference between general freight calculation and that which is subject
to higher dimensional weight rating. And to improve the processing of those packages, pre-measure and
clearly identify the dimensions of the boxes. Where possible, using USPS Flat Rate packaging saves the cost
of boxes and simplifies calculating postage.
To further mitigate shipping expenditures, evaluate the service levels of your shipments. Consider other
potentially more cost-effective options, such as ground vs. next day. In fact, in many cases for regional
deliveries, packages shipped via ground service are delivered next day. When “next day” is a must, consider
afternoon or end-of-day service levels. Consider USPS services such as Priority Mail for Thursday and Friday
shipments as they’ll most likely reach their destination by Monday. And depending on the contents, when low-
cost is more important than delivery time, consider USPS Package Services options such as Bound Printed
Matter, Media Mail or Parcel Post for qualifying, non-personal items.
As part of evaluating shipments, be certain to analyze your carrier invoices. Identify all charges and fees
beyond the actual freight, such as residential surcharges, address error fees, etc. Look for solutions that can
identify surcharges up-front so that your invoices to customers is accurate. Seek solutions that validate an
address for accuracy. This may reduce address error fees as well as improve the delivery time of your
customers’ packages.
Confer with Providers
You don’t have to go at this alone. Seek the expertise of your service providers. For example, look to shipping
solution partners for strategies and technology to avoid those extra costs and improve your shipping
operations. Work with your carrier providers or a 3rd party consultant to assess your invoices and perhaps
identify other shipping service options. Talk to the Postal Service. The USPS continues to offer new,
innovative shipping options to meet shippers or all sizes.
Be Prepared
Here are important actions to take in the next 30 days:
1. Assess your shipping processes (Are they as streamlined and efficient as they can be? Do your processes
enable you to make informed shipping decisions?)
2. Understand the package details of your shipments (Reduce package size when able; combine shipments to
the same location as overall costs may be lower.)
3. Fully understand your carrier invoices and overall shipping spend. Leverage the expertise of your shipping
partners, those being your technology solutions providers, your carriers and the USPS.
Doing this will allow you to make informed decisions and improvements before the holidays. And lest we
forget, your assessment will also better position you to identify the impact of the 2012 carrier rate increases…
but that’s a topic for another day.
Elizabeth Lombard, Manager, Postal-Carrier and Certifications, Pitney Bowes Inc. Contact Elizabeth at
elizabeth.lombard@pb.com
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