Mailing Systems Technology - May/June 2009 - (Page 16)

Ship It In these economic times, every mail operations manager is looking for ways to cut costs. An area that is often overlooked is finding a way to increase revenue for your operation. Is it possible to turn your mailing operation from a cost center to a profit center, perhaps by passing on costs to customers? Your customers are usually departments within your organization, and still, most mail operations charge their postage costs to a department or cost center. Are you charging for all your costs? Today, mail operations not only process postage but also utilize overnight carriers such as FedEx or UPS. Every item that leaves a mail operation should be accounted for and included. I propose that mailing operations take on some of the best practices of parcel shippers. Let’s look at some of the ways that parcel shippers turn their shipping into a profit center and see if it could apply for a mail operation. When it comes to charging for shipping, it is not an easy task, especially since it is much more complicated nowadays. The rates on your scale or computer are not the rates you pay. The ques- With Mark Taylor Can You Make Shipping a Profit Center? available at the time the label is produced. In order to account for these extra fees, most parcel shippers add a handling fee and hope that it works out. a Implementing the Solution On average (according to PARCEL surveys), accessorial charges were 20% of transportation costs. An easy-to-implement solution would be to add a 20% handling charge to all of these type of items shipped and measure if it covers all the costs or produces a profit or loss and Fact: Last October, PARCEL magazine adjust from there. If, however, your organization does not allow you to add a flat percentage, there are other options. Most shipping technologies provide a data field where a cost code or department name can be entered and transmitted to the carriers. By using this strategy, accessorial charges can be tracked and charged back to specific accounts. The bottom line is that your bottom line does not need to be in the negative. did a survey of 600+ shippers and found that 78% passed on the cost of shipping and handling to their customers. tion becomes: What fees should be charged? The way most parcel shippers (29%) assess the amounts is to charge their customers the actual carrier costs, including surcharges, plus a handling fee. The problem is that most of the shippers surveyed were still losing money using this method. The reason is because of the amount of surcharges that parcel carriers like FedEx and UPS add to the basic rates. The accessorial charges are for items such as residential deliveries ($2-$2.40), dimensional weights (which could add 30% more) and address corrections ($6-$10). There are over 80 surcharges that small parcel carriers can add to a package. The major problem that all shippers experience is that they don’t know about these extra charges until after their item has been delivered and they receive the carrier invoice weeks later. This was never a problem for the typical mail operation that only processed postage because the U.S. Postal Service does not have surcharges. No matter what technology an operation uses for processing packages and express envelopes, the information is not 16 MAY - JUNE 2009 a Mark Taylor, MBA, DLP is the nation’s leading authority on parcel , shipping, with 32 years of experience consulting for thousands of organizations. He is a writer, speaker, business consultant, and entrepreneur. Taylor has been featured as the industry expert in the New York Times and has been interviewed on ABC News. He spent 13 years at Pitney Bowes, working with mail center managers on increasing productivity. The American Society of Transportation and Logistics has named Taylor a Distinguished Logistics Professional (DLP) in recognition of the contributions he has made to the field of logistics during his 30-year career. He can be reached at

Table of Contents for the Digital Edition of Mailing Systems Technology - May/June 2009

Mailing Systems Technology - May/June 2009
Editor’s Note
Real Life Management
Software Byte
Employing Technology
Everything IMB
Ship It
Best Practices
What You Think
From the Source
The Key to Approval
Practical Insights
Mail.XML and Services Oriented Architecture (SOA)
Implementing the Intelligent Mail Barcode
Internet-Powered Postal Mail
Using Personalization Technology
Reality Check
Pushing the Envelope

Mailing Systems Technology - May/June 2009