The ecommerce industry has had a great deal of influence on small parcel shipping. You can buy just about anything online today. As expected, this leads to enormous amounts of packages being shipped around the world, and it’s happening every day. Companies are starting to adapt to the needs of the consumer, who has more power than ever.

Ecommerce shipping companies are using parcel carriers to meet the demands of the consumer, which means cheap parcel shipping rates, and faster shipping times. The rise of ecommerce shipping has influenced the parcel shipping industry in other ways, however. The rising growth in parcel shipping has changed rules, rates, regulations, shipping options, and more in the industry.

There are ways to improve your parcel shipping operations, however. Here are some of the big issues with parcel shipping, and what shippers can do to counteract them.

Benchmark Carriers

A mistake a lot of shippers make is not to benchmark carrier performance. The only way to know you’re saving money shipping is to look at all your options. There are more parcel carriers and parcel shipping service options than ever before. It’s very common for shippers to make their decisions based off habit, or what they believe are good shipping rates, just because they don’t look outside of their comfort zone. It’s important to review and analyze various competing services and compare them to other parcel shipping services. Ecommerce businesses are pressured to provide free shipping and faster delivery, so it’s important to find the cheapest services. Failure to benchmark different services likely means you’re paying far too much.

It can be tough to switch large volumes of ecommerce or parcel shipping to a new carrier, but paying high shipping rates can be detrimental to a business. It’s not only about comparing parcel shipping rates, though, service levels are also necessary to benchmark. Different carriers will be able to provide different services, like how regional parcel carriers can be faster than major carriers like FedEx, DHL, UPS in certain instances, and USPS is now a very viable option.

A final thing to consider on benchmarking parcel shipping rates, is that long term customers pay more than new customers. Without considering rates of different carriers you’ll be paying more than you think. It may be that you’re correct, and the incumbent carrier may be the best for your parcel shipping, but without benchmarking you’ll never know if there’s a cheaper and more efficient carrier for your ecommerce shipping needs.

Carrier Agreements

Failing to properly analyze carrier agreements is another common mistake. There is a pricing agreement or contract with parcel carriers which outlines services and their baseline rates. Even if the agreement seems to be perfectly in your favor, don’t sign it without reading contracts closely. Make sure services and shipping rates are exactly what your ecommerce shipping business and the parcel carrier had agreed upon, because there may be unexpected terms which add on fees or expenses you were not expecting. When you’re negotiating a carrier agreement there is a lot to consider.

Did the carrier add a guaranteed service refund waiver into your parcel shipping contract without bringing it to your attention?

Did your carrier keep the discussed dimensional weight divisor in your contract?

Are you aware of all the provisions from the service guide your contract is subject to? Are you aware they can change service guides without notifying you?

Did the carrier accurately include all negotiated discounts and incentives?

Many parcel shipping companies have experienced issues like this, but didn’t discover that they were harming them until it was too late. It’s important to have experts in the industry look over your contracts with parcel carriers. Experts in small parcel shipping and carrier contract negotiation can make sure that you get cheap shipping rates, quality services, and hold carriers to the negotiated agreement.

Small Parcel Auditing

Deciding not to audit or to do small parcel auditing in-house is one final mistake. It’s a good start to work on negotiating better contracts and parcel shipping rates, but the agreements won’t mean anything if you don’t utilize effective small parcel auditing. Parcel auditing is how you ensure the cheap shipping rates you negotiated with carriers are met. It’s smart to use an external parcel auditing service to hold your carriers accountable. Using parcel auditing services will go through every parcel shipping invoice to ensure carrier contracts and service guides are met exactly, and if they aren’t, the parcel auditing service will file refund requests on your behalf to help you save money shipping. Things like late deliveries, inaccurate service levels, incorrect accessorials, and so on can be discovered with parcel auditing.

Parcel auditing services can also provide the shipper with access to the parcel shipping data accumulated from the audit by looking at key performance indicators. It provides reports on your shipping to help you make better shipping decisions and save further money. You can only manage shipping operations that you can measure, which is why parcel auditing is essential for all ecommerce businesses. It’s not easy to accomplish accurate and thorough auditing in-house, so third-party auditing is the best way to get industry experts looking over your invoices to help you save money shipping.

These are common mistakes that parcel shipping companies make, but starting to benchmark monitor performance, having experts look over your carrier contracts, and using small parcel auditing are steps towards a more efficient supply chain.

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