Malvern's Shipping Software Blog

I recently ordered laptop memory from a MAJOR online retailer that was delivered in a half cubic foot box. [Pause while you picture this. Hint: picture a marble getting delivered inside a shoe box.]

This is a clear indication that many shipping operations have failed to adjust to the recent but significant changes in volume-based pricing. Apparently, it seems, many shippers do not realize that size does matter. 

A half cubic foot box (6" x 12" x 12") which weighs up to 1 lb gets billed at a 5 lb rate.  Sent by UPS Next Day Air® to zone 6, the 2008 list rate would have been $48.25. The 1 lb rate would have been only $32.55.  Appropriate- sized packaging would have yielded a savings of $15.70.

You should make every effort to avoid getting "dinged" after the fact for dimensional weight charges that you did not and cannot pass along to your customers.  If customers prepay for (estimated) freight charges, you should be sure to understand which products result in dim weight charges. Be sure to factor in this incremental  amount or do what you can to reduce the dim weight charges through better packaging. 

Building real-time rate shopping into your Order Entry process (taking both weight and dimensions into consideration) can eliminate this issue automatically. However, this requires that you store this data for your products, do not perform a lot of re-packing, and that you have the ability to integrate a rating engine into your Order Entry system and/or Shopping Cart.

Many shippers under estimate how significantly these charges can snowball and how easily a once-profit-generating shipping operation (or at least breakeven) can turn into a losing proposition.

Many third-party shipping systems can be configured to automatically prompt users for dimensions for express and/or ground shipments. They can also prompt the user to enter just a box code and then automatically recall dimensions for commonly used boxes. If your product dimensions are ever known, these dimensions can be imported too. Then, in all cases, dimensions can be incorporated into the rate.

Ideally, the only time you should be measuring a box during the shipping process is when it's not a standard box size.  That is, when it's not not a box that's part of your normal inventory.

As parcel carriers continue to increase the significance and pricing impact of dimensional rating, it is critical that you know when dimensions are necessary and, most importantly, to be able to enter them quickly-- if not effortlessly. 

Consider, for example, if you have to measure and then type 12, tab/click, 18, tab/click 16, Enter... to record the dimensions (12×18x16) for a specific box. In even a small to medium-sized shipping operation (50+ packages per day), you are wasting TONS of valuable time.

If your shipping process does not require any packing (combining of products), then the ideal process is to record your product dimensions in your database and to have your shipping system automatically import the dimensions.

Since that is an "ideal" solution which does not apply to many shipping operations, consider using a shipping system that stores a complete list of your commonly used box sizes. This way, instead of remember or re-entering dimensions, you can recall them very easily with a single code.

Better yet, you can create this database of box codes and then create a laminated sheet with a barcode for each box type (some boxes actually have a barcode of the box code right on the box).  Now, place the package on the scale, Scan the Order #, Scan the Box Code, hit Print...  With this streamlined approach, you can literally cut the shipping time in half.

As you may be aware, if you are not capturing dimensions for all of your boxes you could be getting hammered on rate adjustments. If you don't know, you should review the adjustments in your last few months of freight bills.

If you are entering dimensions and employing a manual process to do so as described above, you are getting equally hammered- if not more so- on unnecssary labor expenses.

So, if you are spending too much time entering dimensions or paying significant penalties for dimensional charges that were not previously calculated, you should consider shipping software than can automate this process for you.

Many B2C shippers struggle to effectively manage (let alone reduce or eliminate) residential and delivery area surcharges.

Before discussing this further, let's consider the 2009 UPS Ground rates for a 1 lb package shipped from Malvern, PA 19355 to: 

A commercial address in Yorklyn DE, 19736
Rate: $4.34 

A residential address in Townsend DE, 19734
Rate: $9.27 

The combination of the residential and extended area surcharges result in more than doubling the shipping charges here. (Neither rate includes a fuel surcharge.)

These significant surcharges commonly trigger two negative scenarios. First, abandoned shopping carts are often the result of checkout sticker shock. That is, the consumer is about to make a purchase online but ends the transaction when the shipping charges are displayed.  The alternative, is to not pass along these fees to the consumer.  However, this directly reduces or even eliminates the profit built into the sale.

One proven strategy to avoid or eliminate these fees is to use a carrier that is optimized for the last mile. (The "last mile" refers to the final stage of the delivery-- from the nearest carrier facility to the final destination.)

The United States Postal Service maintains a significant advantage for many types of shipments bound for residential, rural and remote areas. This is made possible by the sheer number of vehicles and delivery personnel. As a result, several carriers now offer service levels which leverage the vast network of postal services trucks and postal workers.

The solution is to simply include the Postal Service (which does not charge any of these fees) when comparing rates for residential shipments. However, UPS, FedEx and DHL have all teamed up with the Postal Service now to offer composite solutions called: UPS Mail Innovations, FedEx SmartPost and DHL GlobalMail.

With these shipping methods, the primary carrier (e.g., UPS) transports the package most of the way and the Postal Service performs the last leg of the delivery. The advantage to these combines methods is the advanced tracking capabilities offered by UPS, FedEx and DHL and the low cost of the final USPS delivery.

So, for any business that ships direct to consumers, it is important to be aware that under many circumstances, the Postal Service and these other methods offer considerable savings when compare to standard Ground shipping.

Now, the trick to taking advantage of these alternatives is to implement a seamless process for selecting the most cost effective carrier or service. For real efficiency, you should consider a shipping system which can automatically compare and select the cheapest method without any user interaction, whether this might be USPS or a composite method.

Your shipping software should be configured with "business rules" to accommodate simple or sophisticated logic.  For example, a simple cost-based comparison might be to automatically choose the cheaper of FedEx Home Delivery and Postal Priority.  A slightly more sophisticated comparison might take transit time into consideration by comparing UPS Ground and Priority Mail for Zones 7-8 and UPS Ground and UPS Mail Innovations for Zones 2-6. 

A final note... because the composite services often use economy postal services for the final delivery, you should clearly indicate to your customers that they are choosing an "Economy" shipping method. Shipping options labeled "Standard" or "Ground" may falsely set your customers expectations.  So, if you choose to offer one of these methods, you should consider calling it something like "Economy (3-10 business days)".