Parcel - June 2008 - (Page 26)

management EDUCATE THE SHIPPER, OR FIX THE SOFTWARE? A new look at accessorial fees By Peter Starvaski ately, I’ve been spending a signiﬁcant amount of time with larger shippers (>1K/packages per day) helping to deﬁne business rules, routing guides and taking as much of the guess work out of shipping as possible. In most of these large implementations, the shipping component is a black box that doesn’t require any real-time human interaction once it’s in production. So it was a refreshing change when I had the opportunity to work with a smaller customer that was shipping with an attended station. Some of the information for shipping came from an automated integration with another application — mostly address information. However, the real bulk of the shipping decisions were being made by the shipping attendant. The client was concerned over discrepancies in its carrier invoice relative to what the shipping software was providing. This was hurting his bottom line; he was under-billing his customers for shipping. L with accessorial fees and suspected the reason for the discrepancy. I’m sure that most readers of this article could have also ventured an informed guess and got it right: The user had not entered in the dimensions, and the shipment had not been ﬂagged as residential. When asked about the dimensions, the user stated that he had selected the packaging type, which he assumed would have populated the dimensions. That’s a reasonable assumption, but in this instance, it was not true — the ﬂexible bubble type envelopes he was using can have a varying height, depending on what’s placed inside it. Moreover, the shipper was not checking the residential indicator. Although he didn’t come right out and say it, the culprit in part was the shipping software; although it could have been conﬁgured to set a ﬂag for him, it hadn’t been conﬁgured that way. In this example, it was costing the company a total of $3.10 for one package. A commercial delivery area surcharge of $1.50 was applied, but it should have had both the residential surcharge ($2.30) and the residential delivery area surcharge ($2.30) for a total of $4.60 in residential surcharges, rather than the $1.50 commercial charge. Additionally, had they entered in the accurate information, another carrier would have been selected based on any comparison rate shop, because this particular weight/zone/ residential combination also happens to be the sweet spot for another carrier. One positive take-away in all of this is that the shipper folded the soft packing in half, over the top of the box. He stated he did this because he thought it would protect the container better. While he did provide more padding for the top of the parcel, he shortened the length of the soft-sided package in half (a 16-inch side became eight inches) and only slightly raised the height by a ½ inch or so. Folding this packaging reduced approximately one and a half pounds from the dimensional weight, calculated as LxWxH divided by a dim factor of 194. Unfolded: (12 X16 X 3.5)/194 = 3.5 Folded: (12 X 8 X 4)/194 = 2 www.PARCELindustry.com Step One: Reviewing Invoices and Shipping Processes We started by reviewing a recent invoice from one of the major carriers. One of the ﬁrst shipments we looked at was a zone 8 that was dimensional-weighed at two pounds (actual weight was one pound). It detailed the fuel surcharge ($3.64), the Residential Surcharge ($2.30) and a Delivery Area Residential Surcharge ($2.30). The total cost of the shipment was $23.29. I suggested we go to their shipping system and ﬁnd that package. The shipping system had posted the total cost of the shipment at $14.93, a difference of $8.36 from what the carrier charged. The client — and, more speciﬁcally, the operations manager I was working with — had his ﬁnger on a lot of the changes 26 May 2008 http://www.PARCELindustry.com

Table of Contents Feed for the Digital Edition of Parcel - June 2008

Parcel - June 2008 Contents Editor's Note What Would Augello Say? Success Means Never Being Satisfied Moving from Manual to Automated Fulfillment Regional Carriers Move to the Forefront Understanding Warehouse Management Systems Negotiating Carrier Contracts It’s All About the Data! How Long Will The East-West Trade Imbalance Last? Educate the Shipper, or Fix the Software? Product Profile On the Mark New Products & Services Advertiser Index Wrap Up

Parcel - June 2008

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