Malvern's Shipping Software Blog

Providing Proof-of-Delivery data is a critical challenge that many HME/DME (Home & Durable Medical Equipment) suppliers face. Proof-of-Delivery (POD) data is often required in order to receive payments for Medicare claims.

In many cases, timely claims processing depends on the HME/DME supplier's ability to provide proof that a package was delivered to a patient (or customer). The faster this process can be completed, the more quickly claim payments can be received.  So, naturally, any automation that can be applied to this process is beneficial.

Carrier provided shipping systems such as UPS Worldship and FedEx Ship Manager are not capable of automatically tracking shipments and posting proof-of-delivery results back into your database.

The two most common solutions are (1) a custom tracking solution or (2) a third-party shipping system.  In both cases, the automatic tracking must also result in either storing the results in your order management or other host system or by generating reports or export (Excel) files.

Some third-party shipping systems can automatically track every package shipped routinely until every package is delivered. As the results are updated, they should be able to automatically post the delivery date, time, signed for by, etc information back into your business system. Tracking results are generally also available from search screens within the shipping software and in reports and export files that can be generated by the shipping system.

When Medicare claims processing is problematic due to slow and manual Proof-of-Delivery processing, the cost for a third-party shipping system can be quickly and easily justified. 

There's no question that you can save money by implementing shipping software that automatically compares rates between carriers.

However, another great way to save money is by shopping around for parcel insurance. Many shippers are not aware that they do not have to insure their packages directly with the carriers (such as UPS, FedEx, Postal Service, DHL, etc.) Let's face it, these carriers are not in the insurance business. So, why should they offer competitive insurance rates?

There are many great, third-party parcel insurance carriers out there including Shipsurance (formerly DSI), U-PIC and PIP (Parcel Insurance Plan). These providers offer savings of up to 50% (or more) off the carriers' rates.

Here's how parcel insurance works...  Rates are based on $100 units. For example, if your parcel has a declared value of $400, it contains (4) $100 units. For UPS, FedEx and USPS Express Mail, up to $100 of every shipment is covered at no cost. So, parcel insurance is necessary to cover the additional $300 (or 3 units) of value above the base $100.

In 2009, UPS and FedEx charge $0.65 per unit (with a $1.95 minimum). The average third-party parcel insurance carrier rates are approximately $0.25 per unit (typically with no minimum). So, if you process 25 shipments per day valued at $300, your approximate monthly savings would be:

   UPS/FedEx = $1.95 (min) x 525 pkgs /mo = $1,024 

   3rd Party Insurance = 2 Units x 525 pkgs /mo x $0.25 /unit = $263

   Estimated Savings: $761 per month

Most shipping systems have standard support for these third-party parcel insurance providers. So, if you insure a large percentage of your shipments but your shipping system does not accommodate third-party insurance, now is the time to consider a shipping system upgrade. With a monthly savings of $761 (in the example above), the return on investment would be extremely rapid.

Generally speaking, once you activate third-party parcel insurance in a shipping system, the declared value no longer gets sent to the carrier and you begin paying the carrier for just the actual freight charges. Then, on a monthly basis, a printed report or electronic upload is transmitted to the insurance carrier to generate a bill for your discounted premiums.

In summary, if you ever insure packages for over $100 or if you insure postal packages at all, you should look into using third-party parcel insurance.