We talk to shippers every day about their challenges, and we’ve heard just about everything — including the lies they tell themselves about their own shipping practices and costs.
Most are just too busy or have been doing things a certain way so long that they can’t see how changes in the shipping industry have affected their business. But the two biggest ones can have a major impact on their shipping costs.
“I have the best deal on shipping.”
Nearly every shipper seems to think this, and sometimes they’re right. But after the year we’ve all just had, most don’t have as good a deal as they could for one simple reason: It’s not based on their data.
To truly know what to ask for in a carrier negotiation, you need to first understand your shipping profile and your specific pain points — using your own shipping data. Then you can address those issues by working on the surcharges and rates that affect your costs the most.
But this isn’t a fix-it-and-forget-it situation either — your carrier agreement requires consistent attention. The chart below illustrates just how crucial continued management is in controlling your costs.
“I know my rate increase for 2021 — it’s 4.9%.”
Most shippers overlook or underestimate the impact of the GRI when it’s announced by the carriers each year. But it’s another issue that’s deeply affected by your shipping profile.
While the carriers announce their average increase, too many shippers make the mistake of assuming that’s the exact increase that applies to them. But the GRI contains a range of changes that might affect you more than other shippers, like:
- Individual surcharge increases: Additional Handling – Weight, Additional Handling – Dimension, Residential, and Delivery Area surcharges all rose 6.25% or more for next year.
- New surcharge triggers: In addition to triggering at 48 inches on the longest side or more than 30 inches on the second-longest side, the Additional Handling – Dimension surcharge will now kick in when a package’s length and girth combined exceeds 105 inches.
- New fees: FedEx has added a 6% late fee with a standard net-15 payment window. UPS has added a fee for shipping to a UPS Access Point, which will now cost $2.99 per instance.
Were you aware of these changes? If not, it’s time to dig into your data and clean up your agreement.
Stop assuming and start saving
There are three more assumptions we hear day in and day out:
- “My contract isn’t up for renewal for another year.”
- “I can offer free shipping.”
- “I don’t need to change anything internally.”
Any of those sound familiar? Don’t worry if they do — like we said, they’re common misconceptions. But we want to help you understand them and make the right changes.
Read more about how to combat these assumptions in our new eBook, Five Lies You’re Telling Yourself About Your Shipping. The sooner you learn what they are, the sooner you’ll be able to get your shipping costs down.
