the PartnerShip Connection blog
the PartnerShip Connection blog
the PartnerShip Connection blog
the PartnerShip Connection blog
the PartnerShip Connection blog
Keys to Success for Vendor Compliance and Inbound Shipping
07/10/2018 — Leah Palnik
For many retailers, obtaining vendor compliance and maintaining smooth inbound shipping operations may seem like a tall order. However, with the right planning and follow through, it is achievable. By following these keys to success, you’ll be on your way to reducing your freight costs, avoiding chargeback issues, and creating efficient operations.
Developing an effective routing guide
The very foundation of achieving vendor compliance is developing an effective routing guide. Routing guides provide shipping instructions to your vendors that help you gain control of your inbound shipments. They often include modes and carriers for specific lanes, as well as rate and service requirements.
In order to create routings that are best for your business, you’ll need to consider several factors. Price, transit time, and reliability are all important when selecting a carrier and determining how to have your product shipped. For different services and weight breaks, you want to designate a carrier that provides you with the best rate and can deliver your product in the time you need.
Conducting an in-depth analysis of your inbound shipments can be time-consuming but necessary when determining your routing instructions. This is where working with the right freight broker can make a huge difference. The broker you work with should provide inbound management services that help determine the routings that will be best for your business and will create the routing guide for you – saving you valuable time.
Maintaining good relationships with your vendors
For smooth inbound shipping, you want to have a good rapport with your vendors. Like any other relationship, communication is key. For example, when you send your routing guide out to your vendors, it’s a good idea to include a request for confirmation. However, you won’t always receive one. If that’s the case, following up and opening the lines of communication will be your best bet to ensure vendor compliance.
If your vendors aren’t using your routing instructions after receiving your routing guide, you’ll need to follow up with a call or email. When you have a good relationship with your vendor, you’ll have the right point-of-contact and will be able to resolve the issue quickly. If not, you could have a harder time achieving vendor compliance.
Maintaining a relationship with your vendors can be difficult and time-consuming. This is another area where working with the right freight broker can make a difference. When selecting a freight broker, ask about experience in your industry. Quality freight brokers familiar with your industry will already have an established relationship with many of your vendors, which will help with compliance efforts.
Perfecting your order forecasting
Managing your inventory can be challenging. But the advantages of forecasting and planning your orders ahead of time are too great to ignore. When you don’t plan ahead and then need your product within a shorter time-frame, you will have to rely on costly expedited services. Spending the time up front to make sure your orders are placed with ample time will be better than spending the extra money in the long-run.
Also, with more lead time, you’ll be in a better position to handle any issues that arise. For example, if your shipment gets lost or damaged in transit and you need your product immediately, you’ll be out of luck. In that event, you’ll need to file a freight claim which doesn’t always guarantee compensation and is often a lengthy process.
If you’re not able to place your orders ahead of time, it’s a good idea to consider freight insurance. Unlike relying on carrier liability coverage, you won’t have to worry about if the carrier is found liable or not and often times you’ll get paid out much faster – making it easier to resume operations as normal.
Conducting regular reviews for improvements
Once you do have a routing guide in place and have vendor compliance, you can’t just set it and forget it. It’s best to review your routing instructions periodically so that you’re always getting the best rates and service possible.
You can choose to set aside a specific time each year to do a review. But if you make any changes throughout the year with your orders or any other factor that affects your shipments, you’ll want to take that time to evaluate and update if necessary.
It’s also important to stay on top of carrier rate increases, accessorial changes, and NMFC updates. These kinds of changes can have a significant effect on your freight costs and you'll want to make sure that you fully understand how these changes will affect your specific shipments. For example, carriers announce general rate increases every year and will present an average increase. If you simply use that average to judge how your costs will be affected, your budget will most likely be off. The increases vary greatly across the board depending on a number of characteristics, so it's important to evaluate them based on your specific shipments.
Partnering with the right freight broker
The keys to vendor compliance and inbound shipping management are easy to master when you work with the right freight partner. PartnerShip can help conduct a complete inbound shipping analysis, create a routing guide, and send routings on your behalf for vendor compliance. Contact us today to get started, or download our free white paper to learn more about managing your inbound shipments!
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Slow Season Tips for Shippers
02/19/2018 — Jen Deming
The make-or-break peak season for shippers has passed, and the holiday rush and subsequent surge of returns is over. Months of preparation and planning have paid off and now is the time businesses get to take it easy and enjoy the lull, right? Truth is, this is the most valuable time you can use to plan and forecast for the next year, so you better make the most of it. Here's some core tips on what shippers and business owners can do during the intermission.
Review and Reflect
One of the most important things a business can do almost immediately after a peak shipping season ends is step back and review how the busy period went. By taking a high-level look at successes and opportunities, it's easier to see what adjustments need to be made for more efficient operations in every area of business for a better bottom line. Is your industry consistently cyclic? Are busy times evolving into lengthier periods? Do you need to prepare earlier than you used to? Did you have a large enough workforce to fulfill orders easily? How effective were your marketing promotions? It's also imperative to take a closer look at this year's expenses and where most of your costs, both anticipated and unforeseen, were invested. How close did you come to your projected budget for the period? These are all variables that you need to look at in order to have successful subsequent peak seasons.
With less stress on order production, fulfillment, and replenishment, it's a great time to get organized and focus on what you can't during peak season. In order to operate more productively, it's important to make sure everything is in order from top down – office space, production facilities, and warehousing. Reviewing everything from payroll applications, updated production equipment, inventory strategy, and warehouse management technology is crucial in identifying potential roadblocks that may impede your business from operating at maximum potential. It's also a great time to reinvest in your staff, from developing additional training programs to conducting employee reviews on workplace culture and performance. With less immediate emphasis on production and meeting deadlines, a forward-looking business can also evaluate industry trends as well as evaluate peers. That way, you can better project what you need from purchasing inventory to hiring your sales force.
Good inventory management procedures are important in creating a seamless peak period, specifically for order fulfillment and replenishment. Now is the time to implement proper organization and best practices, in order to maximize efficiency and save time and money on the front-side. Depending on budget and expenses, the slower period is a good time to take a look at updating tech and software. RFID (radio frequency identification) systems, wireless LAN, and bar code systems can all help with monitoring of your sell-through cycle by improving accuracy giving you real-time data. It's also a very good time to take a look at your inbound shipping procedures for your supply orders. Are your vendor-directed options making sense for your business and your customers? If you haven't already, it's a good time to take control of your inbound shipping and take advantage of available alternatives.
To piggyback off of inventory management, it's a great idea to take a look at your shipping procedures as a whole. Was there a high amount of damages to your shipments during transit? Limiting the costs put into freight claims replacement orders is a great way to avoid unexpected expenses, and you can do this by reevaluating packaging type and procedures. Did you have difficulty hitting delivery deadlines? Oftentimes, fulfillment centers can charge for late arrivals or hold-overs in addition to sort and segregation fees. It may be smart to take a look at your available carriers or service options to see which make the most sense for your business and your customers. Different service options can save you time and offer peace of mind about the security of your shipments. With more time available to shop options, it's a great opportunity to collect shipping invoices and conduct a shipping audit with different carriers to see if you are getting the best rates available. Shipping costs add up, especially during heavier freight times, and this is another effective way to keep your expenses down.
Remaining vigilant and being proactive after peak season is crucial for businesses to prepare for upcoming peak periods. Taking a look at what can be improved going forward, and what worked for you in the past an ensure success, and less stress! A huge portion of preparing your business is making sure you have your shipping processes streamlined, and the experts at PartnerShip can help. From analyzing your freight costs, to making sure you have the proper services selected for your shipments, we find the solutions that are right for you. Call 800-599-2902, email sales@PartnerShip.com, or click below to get a free quote today!
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5 "Scary" Shipping Mistakes
10/26/2017 — Jen Deming
Halloween season is here! As pumpkins are being carved and candy bowls set out, it’s also just the right time to discuss some scary mistakes made by shippers. Let’s take a look at the top 5 errors commonly made in freight shipping, so we can be sure your fall business is full of treats, not tricks!
Mistake #1: Improperly Packaging Your Shipment
The first mistake freight shippers make happens even before a pick-up is scheduled and the load is in transit! Packaging your product critically protects from damages both during the move and unloading at multiple terminals. Whether you are shipping in boxes or on a pallet, it’s important that both are sized just right, and in solid condition. In fact, a box can lose up to 50% of its structural integrity after a single shipment. Too much space can allow your product to shift, which can increase opportunity for damage. Use proper cushioning and foam inserts, as well as exterior wrapping especially if you have multiple pieces. Be smart, try to group multiple units into a single load so they do not get separated during the move.
Mistake #2: Bill of Lading (BOL) Errors
Another scary shipping mistake concerns paperwork errors. These include details such as entered weight, freight class, and shipping addresses provided on the BOL. All three are elements that help determine a freight rate for your shipment. Any errors made on these factors will most likely cause a discrepancy and an increase in rate due to re-weigh fees, adjusted classes, and re-delivery charges if an address is invalid or incorrect. Holding a shipment at a terminal for any length of time while determining the appropriate address can incur holding fees as well. Often, shippers will intentionally use a lower class than what is accurate for their shipment, hoping to slide by inspection. If flagged, the shipment will be billed at the higher actual class, and the shipper will be responsible for the difference. Guessing approximations for weight is risky too, because if the discrepancy is caught, the shipper will pay a re-weigh fee and the difference in weight. Having accurate details on your shipping paperwork is key in avoiding unplanned shipping costs.
Mistake #3: Forgoing Additional Insurance Coverage
A third scary shipping mistake refers to insurance and liability. This becomes extremely important in the unfortunate case that your shipment should become lost or damaged. Each carrier offers limited liability on freight shipments, with the amount of coverage set at a fixed dollar amount per pound of freight determined by carrier and commodity. It is the responsibility of the shipper to prove that the shipment was in good condition and packaged correctly at pick-up. The carrier will then attempt to prove that it was not negligent or responsible for the damages incurred in transit. The final approval or denial of the claim can take some time, and you cannot always count on getting damages paid out, no matter how thorough you are. Your best line of defense is looking into supplementary insurance. Freight insurance acquired on your own or through your shipping partner provides more protection than relying on the carrier alone. Even if you do win a claim and get paid out by the carrier, liability may be limited, and you may not get the full amount of your claim. Purchasing additional insurance can help, and it’s important to understand your policy before you ship. PartnerShip understands you need peace of mind, and we offer supplementary freight insurance at a minimal additional cost as an option on all freight quotes.
Mistake #4: Choosing the Incorrect Service/Accessorials
Most carriers offer different time-sensitive service levels depending on the urgency of your freight shipment. Expedited, guaranteed, time-critical, and truckload are a few. Guaranteed services help you stick to a delivery schedule with a specified on-time delivery, by either 12 PM or 5 PM. Expedited and Time-Critical services offer faster transit times and a more urgent delivery. All of these services tend to be costly, so it is important to determine what your transit time needs are, well in advance. Delivery schedules can be delayed due to inclement weather, missed pick-ups, and a heavier shipping season. Building extra time into a delivery deadline can help avoid unnecessary expedited costs that add up, especially as we head into the holidays.
Another common error that shippers make is neglecting to add-in the cost of additional services, or accessorials, when they get their freight quotes. Be mindful of what is needed at the shipment's origin or destination. Does the shipper need a lift-gate at pick up? Do they have a dock? Is it being delivered to a residential location, or at a school or construction site? Chances are, there's a fee for that. It's important to learn everything you can about pick-up and delivery services that may be required, and inform your carrier or service provider before you get a rate for your freight.
Mistake #5: Leaving Inbound Shipping to Vendors
A final, costly error that many shippers make is leaving inbound shipping decisions completely up to their vendors. Commonly, businesses may allow the vendor shipping your order to arrange with their own carrier choice, marking the freight charges as "Prepaid," and then including those charges in your invoice. Taking control of your inbound shipping is one of the easiest ways to cut your shipping expenses, and working with a 3PL such as PartnerShip is one way to make sure you are saving on your inbound freight.
At PartnerShip, we can provide an inbound shipping analysis by looking at what you pay and whether we can save money on your shipping costs. Our team can contact your vendors on your behalf, create updated routing requests, and inform them of your specific shipping instructions. We offer consolidated invoicing and audit all of your inbound freight bills for accuracy. Think you might be able to save on your outbound shipment? We've got your back on those, too.
Keeping your shipping costs low and your freight safe may seem intimidating, but it doesn't have to be scary. When you work with PartnerShip, our shipping experts will double check shipment details, compare your pricing, and make sure you are covered from pick-up to delivery. Take your freight shipping from spooky to stress-free and contact us for a free shipping analysis!
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Get Control of Your Holiday Shipments
10/11/2017 — Leah Palnik
As a consumer, it might feel like it’s too soon to start thinking about the holidays, but retailers know that waiting is not an option. If you’re in the retail industry, you’ve probably already been receiving shipments from your vendors and preparing for the increase in business. As you’re getting ready for this busy time of year, there are a few things you’ll want to keep in mind.
Set up inbound management
While you’re forecasting sales and preparing your inventory for the holiday season, it’s more important than ever to make sure you are properly managing your inbound shipments. You need to have a good relationship with your vendors and be assured that they’ll be able to deliver your goods on time. You need efficient routings set up and you need to be able to plan ahead so you can avoid costly expedited services when you’re replenishing throughout the season.
This is where working with a third-party logistics (3PL) provider or broker can make a big difference. A quality 3PL will create routings for you and ensure vendor compliance. They can also make sure you’re getting the best rates and service options for your time-sensitive shipments, by utilizing their buying power in the market.
Make sure your website is prepared for increased traffic
Online shopping is more popular than ever and will be a crucial part of your sales this holiday season. Don’t let technical issues get in the way of sales, when customer traffic to your site will likely be the highest of all year. Use a reliable web host and develop back-up plans in case of problems.
Clearly communicate shipping deadlines
There are some of us who are guilty of waiting until the last minute to do their holiday shopping. When’s the last day to order for Christmas? Do you offer expedited options or any special seasonal guarantees that could give you a leg up over the competition? Managing customer expectations will increase your customer satisfaction. Clearly communicate this information on your website, during the purchasing process, and in emails to your subscribers.
Consider special promotions
Now is the time to pull out all the stops to maximize your sales. People are looking to buy, and it’s your job to incentivize them to bring their hard earned dollars to your store. According to a report by the National Retail Federation, 50% of shoppers cited a limited-time sale or promotion as the reason they were swayed to purchase an item they were on the fence about.
Even more notable, 64% of shoppers said that free shipping has influenced them to make a purchase. Offering free shipping has become the new normal in the world of ecommerce. If you’re worried about the costs of “free shipping” there are several different strategies you could try. For example, try setting the free shipping threshold above your average order amount to increase the amount people spend when making a purchase on your site. When executed properly, consumers will be more likely to add items to their cart to meet the minimum and it becomes a win-win.
Be aware of holiday surcharges
UPS recently introduced an additional surcharge for residential shipments during their peak season. The charge applies during two of the busiest online shopping days of the year, Black Friday and Cyber Monday, and for the week before Christmas. We don’t have to tell you that these are very critical parts of the year for your online orders. These charges can add up quickly and cut into your profits for the season. The good news is, FedEx won’t be following in their footsteps. The UPS competitor is only implementing an additional surcharge for oversized packages and special handling. Evaluate how you’re shipping out customer orders now and make any necessary changes before these times hit.
Set up a streamlined returns process
With increased holiday sales comes the inevitable – returns. According to a Narvar Consumer Report, 74% of customers said return shipping fees will prevent them from making a purchase. On the flip side, 72% said that a “no questions asked” return policy would make them more likely to buy from a retailer. The influence of the return policy on the purchase decision is undeniable. Make your return policy as customer friendly as possible and communicate it clearly at the beginning of the shopping experience. Also, take proactive steps like providing return labels in the original order and offering in-store returns so it is less of a headache for you and your customers.
Striking a balance with inventory, preparing your online store for increased traffic, and being mindful of your shipping options over the holidays can help make your season bright. When you work with PartnerShip, our shipping experts will help you with routings and ensure you’re receiving competitive pricing on your inbound and outbound shipments so you can focus on your business. Contacts us for a free shipping analysis to see how we could help you.
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How to Use Routing Instructions for Better Inbound Management
07/27/2016 — Leah Palnik
Retailers face many challenges when it comes to inbound shipping. Freight costs are constantly on the rise and resources are limited. On top of that, many retailers lack visibility and control of the shipments they receive from suppliers. The good news is that can be remedied – simply by utilizing routing instructions.
Before you can compose your routing instructions, you need to conduct a thorough analysis of your current inbound shipping operations. Take a look at the invoices from your major suppliers to identify what they allocate for shipping and handling. Compare these rates with the rates that you receive with your preferred carriers or broker. Often times, you’ll see that you’re able to get better pricing by using your providers.
If you don’t currently have better rates, working with a freight broker can help. Brokers are able to aggregate the freight volume of their customers and help them negotiate better discount rates and terms. They can also provide additional value-added services, sometimes at no additional cost, that are designed to lower your overall logistics expenses.
Once you’ve conducted your analysis and you have secured competitive pricing, you’re ready to create your routing instructions. It’s important to use clear language and include specific service requirements about the mode and carrier. Here are a few examples:
- Ground shipments between 0 lbs. and 199 lbs. – FedEx Ground billing account #999999999
- Ground shipments between 200 lbs. and 5000 lbs. – UPS Freight Third Party Prepaid billed to PartnerShip at 500 E Lorain Street Oberlin, OH 44074
- Air shipments between 0 lbs. and 149 lbs. – FedEx Express billing account #999999999
In most cases, to obtain vendor compliance you simply need to draft a letter that includes your instructions. Be sure to include your full company information and a message requesting compliance within 30 days to avoid shipping fees being charged back to them. You can then include your routing letter in your next order or next communication with your vendor.
Once your routing instructions are in effect, you’ll benefit from streamlined receiving operations, lower costs, and dependable service. When everything is running smoothly, you can focus on growing and improving other parts of your business.
At PartnerShip, we know that it can be difficult for retailers to conduct an in-depth analysis and prepare routings on their own. That’s why we provide our customers with full inbound shipping management. We can provide you with a free analysis, create routing instructions, and work with many of your vendors on your behalf to obtain compliance. Get started by clicking here to request a free inbound shipping analysis.
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5 Resolutions You Should Make in 2016
01/13/2016 — Matt Nagel
Now that the countdown is over and you’ve vacuumed most of the confetti out of your carpet, it’s time to look forward to the rest of the year and make (hopefully not empty) promises to yourself for a better future. Your overall resolution as a business, when it comes to your shipping operation, should be to save money. In order to successfully achieve this resolution over the next year, you’re going to have to make sure key operations and processes are in place and followed. Not to fear, as Your Shipping Connection, we’ve compiled 5 recommended resolutions for your company to make in 2016 to achieve your end goal – saving money!
- Consolidate - As a general rule, one big order ships for less than three smaller orders. That means businesses should consider consolidating multiple orders into a single large shipment whenever possible, and always try to minimize the number of packages it sends. All too often, shipments are arranged as they come in from sales or order processing. However, a little planning and visibility will go a long way towards saving on shipping costs, supplies, and time.
- Commit to Saving on Inbound Shipments - Many companies that have outbound freight will more often than not have shipments coming into their facility from vendors and suppliers. These shipments are often billed to the consignee even though the consignee has no control over how the shipment is shipped or handled by the carrier. Even if your company isn’t seeing a direct invoice for these shipments, there’s no such thing as “free shipping” and the charges are probably being hidden elsewhere. In short, staying on top of your inbound shipping cultivates a healthy bottom line.
- Avoid Reweighs and Reclasses – Making this simple commitment to a more detail-oriented shipping operation will no doubt save you time and money in the long run. Most of avoiding costly reweighs or reclasses comes down to one document – your Bill of Lading (BOL). Make accuracy a priority on your BOL and enjoy a hassle-free shipping operation.
- Make New Connections – If you’re not yet working with a 3rd Party Logistics (3PL) partner, you can knock the above resolutions (and many more) out of the park in 2016. There are many benefits to taking on a shipping partner, but, in short, a good 3PL should put a great deal of effort into concentrating on the shipping industry, developing solid relationships with carriers and drivers alike, and leveraging that stability into savings and service for their customers. Thereby taking costly time commitments from your staff and providing savings for your company.
- Catch-up on Your Reading – Between our blog and our white papers, PartnerShip puts out a great deal of information to keep you informed on happenings in the constantly changing shipping industry and tips on how to save money on any and every shipment.
Interested in making and keeping these resolutions? Consider PartnerShip as your dedicated shipping partner! We have over 25 years of experience managing less-than-truckload (LTL), tradeshow, truckload, and small package shipping operations for thousands of businesses. Every year since 1989 our New Year’s resolution has been to save you money!
Visit PartnerShip.com/LearnMore for more information.
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How to Accept Freight and Handle Claims
08/28/2015 — Leah Palnik
Knowing how to properly check your inbound freight can save you from a big headache when handling any resulting claims. To help you understand exactly what you need to do in these situations, we’ve developed a new white paper on how to accept freight and handle claims. You’ll learn:
- What procedures to follow when receiving freight
- How to check for damages or shortages
- How to make notations on the delivery receipt
- The steps you need to take to file a claim
- How to improve your inbound shipping management
If you receive shipments from your vendors, this white paper is a must-read. For more educational resources, visit PartnerShip.com/WhitePapers.
When you work with PartnerShip, you benefit from the personalized attention of a dedicated account representative who can provide you with routing management, claims assistance, and the competitive freight rates your business needs. Request a free inbound shipping analysis today by visiting PartnerShip.com/InboundAnalysis.
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How to Accept Freight and Handle Claims
10/20/2014 — Leah Palnik
Sometimes the unthinkable happens – your shipment arrives to your location damaged or short on quantity. Anyone who has experienced this and had to file a claim will tell you that the process can be a little stressful. However, knowing exactly what to do and what to expect in this situation can save you from a major headache. Here are some tips on what you should do when you receive freight:
1. Inspect your freight immediately. Before you sign the delivery receipt, you’ll want to count your boxes and check for any damages. The driver is required to let you inspect your freight – even if he says he’s in a hurry – so take a few minutes to make sure everything looks okay.
2. Document any damages or shortages. If you do find damages or a shortage in your shipment, it’s important to document them for your claim. Take pictures of the damaged products and notate any damages or shortages on the delivery receipt. You will also need to obtain a merchandise invoice illustrating the value of the damaged commodity.
3. Save your damaged freight. Even if you document your damages, an inspector from the carrier may need to come to your location to inspect the shipment. Be sure to save your freight in case this situation arises.
4. Contact your PartnerShip representative. You have 9 months from delivery date to file a claim, however, the sooner you file it – the better. Provide your rep with the information that you documented and your shipment’s PRO number. Your rep will start the claims process for you and help you every step of the way so you aren’t dealing with this alone.
5. Await confirmation of the filed claim. You can expect some kind of communication from the carrier within 30 days of the claim being filed. This could be an approval or denial of the claim, or simply just an acknowledgment that the claim is being processed. Every situation is different and the time required for resolving the claim may vary, but throughout the whole process you can obtain claim statuses from your rep or directly from the carrier.
Dealing with damaged or missing freight is never ideal, but when you work with PartnerShip you don’t have to sort through it on your own. Our dedicated representatives are claims experts and can help you throughout the entire process to make sure your claim gets resolved. Click the button below to download our helpful guide for a quick reference on how to accept freight and handle claims. New to PartnerShip? Click here for a free quote.
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Inbound Shipping Resources
06/04/2013 — Scott Frederick
Since PartnerShip released its improved inbound management tools on PartnerShip.com, we've have hundreds of current and new customers create new or updated vendor lists through PartnerShip. As we have committed to our customers, each of these vendors receives personalized contact and updated routing instructions from a PartnerShip representative through email, mail and/or telephone.
If you're still "on the fence" as it relates to gaining control of your inbound shipping, you might want to check out our brand new electronic white paper (or ePaper as we call them) on 4 Steps to Gain Control of Your Inbound Shipping. You can also check out this abbreviated PowerPoint presentation that was recently posted to our SlideShare profile:
If you need help getting started, you can always request a free, no-obligation Inbound Shipping Analysis from PartnerShip by simply clicking the button below.
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4 Ideas to Reduce Shipping Costs
02/06/2013 — Scott Frederick
Am I Overpaying for Shipping?
Shipping can be one of the most complicated — and costly — activities for any small business. Poor or no planning can result in overpaying, as well as losing sales if the business can't provide consistent and cost-effective delivery to its customers.
Do you negotiate competitive discounts with your shipping providers? Do your purchase invoices include shipping and handling charges? If you answered —yes' to either of these questions, then you could very well be overpaying for your shipping.
Here are four ideas for you to consider to reduce your overall shipping costs:
#1 Obtain Discounts with Carriers
Most carriers — whether express, parcel or freight — provide discounts to businesses that routinely ship or receive merchandise. The old adage —everything is negotiable' is an immutable fact when it comes to shipping fees. The challenge, however, for small businesses is how to go about obtaining the same, steep discounts that are normally reserved for large businesses and heavy freight shippers.
One tactic a small business should consider is joining an industry trade association. Often times, industry trade associations are able to aggregate the buying clout of its members to negotiate and provide better shipping rates to all the businesses that participate in the program. PartnerShip LLC is an example of a third party logistics provider that specializes in working with industry trade associations across the country to create discounted shipping programs for participating members.
Another approach a small business can take is to work directly with a third-party logistics provider (3PL), or even directly with your carriers, to see if you can get better discounts then you presently have today. Often times if you simply —ask for better pricing' you will get it because 3PLs and carriers are always looking to retain and grow their business. Be prepared to share example shipping invoices or manifests with your 3PL or carrier to help them best assess your shipping patterns and provide you with the best pricing.
#2 Develop an Inbound Shipping Management Program
One of the simplest and easiest ways to immediately cut your inbound freight costs is to change your shipping terms from —prepaid and add' to —inbound collect.' Having your vendor or supplier ship collect on your recommended carrier eliminates any handling charges, thus saving you money.
When you gain more control over your inbound shipping, you can save on small package and freight shipments coming into your business every day. As the buyer and receiver of the goods, you can-and should-designate the carrier and arrange for shipping charges to be billed directly to you at your discounted rate. This is called routing shipments inbound "Collect."
In general, there are many benefits to having your inbound shipments routed collect. As the example below shows, it often saves a lot of money. But even if you don't have shipping discounts that are better than your vendor, their handling mark-up could still make the overall shipping costs higher than your own.
Inbound shipping programs are often best managed through a third-party logistics provider. A good 3PL can help you develop routing instructions for your vendors, monitor compliance, and audit invoicing to ensure you're saving the most on your inbound shipping.
#3 Use the Correct Mode & Service Level
A common dilemma for small businesses is deciding the appropriate shipping mode to use for their important shipments. Shipping mode choices include LTL freight, small package, ground, air, ocean, rail, intermodal, and others. When deciding whether to use a small package or LTL freight carrier, for example, shippers must take into consideration the weight and characteristics of the shipment, the shipment destination (e.g., business, residence, etc.), service needs, pricing and fees, and loss or damage concerns.
The table below illustrates an example shipment of varying sizes moving across three different shipping modes. Each mode carries with it a certain level of cost, speed, and liability protection. Choosing the right mode will help your business maximize shipping costs and customer satisfaction.
#4 Consolidate Orders When Possible
As a general rule of thumb, one big order ships for less than three smaller orders. That means small businesses should consider consolidating multiple orders into a single shipment whenever possible, and always striving to minimize the number of packages it sends. All too often, shipments are arranged as they come in from sales or order processing. However, a little planning and visibility goes along ways towards shipping savings as the table below shows.
Consolidating orders provides additional benefits to both shippers and receivers of small package and freight shipments, including:
- Reduced shipping supply expenses
- Greater fuel efficiency (better on the environment)
- Less time needed to receive, handle, and restock orders
One strategy for shipment consolidation is to create a simple shipping guide that takes into consideration all of your business rules for carriers, weight breaks, orders, and shipping contacts. Distribute this guide to your vendors and discuss it with your customers. A little communication can often go a long way towards small business savings.
Shipping is an important cost factor for any small business that ships or receives materials or merchandise. It is often possible to reduce these costs with a little planning and effort. Utilizing some or all of these four tips to control shipping costs can eliminate the strain shipping expenses put on your business. If you're not sure where to start, consider finding a reputable third-party logistics provider that specializes in working with small businesses to help you with the process. There's a good chance your shipping costs will go down and your bottom line will improve!
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Vendor Prepaid versus Inbound Collect Shipping
08/16/2012 — Scott Frederick
One of the simplest and easiest ways to immediately cut your inbound freight costs is to change your shipping terms from prepaid and add to collect. Having your vendor or supplier ship collect on your recommended carrier eliminates any handling charges, thus saving you money.
When you gain more control over your inbound shipping, you can save on small package and freight shipments coming into your business every day. As the buyer and receiver of the goods, you can-and should-designate the carrier and arrange for shipping charges to be billed directly to you at your discounted rate. This is called routing shipments inbound "Collect." Collect is a billing option, in which you are invoiced by the carrier. It does not mean paying the driver at the time of delivery.
In general, there are many benefits to having your inbound shipments routed collect. First, it usually saves a lot of money. But even if you don't have as aggressive freight deals as your vendor, their handling mark up could be a lot higher than your freight deal.
Shipping inbound collect also reduces the number of carriers from different suppliers arriving at your receiving dock every day. When you control the routings, you control how many trucks deliver to your door. That also makes it easier to maximize your staff's efforts.
There may be some cases where your supplier's prepaid freight can actually benefit you. First, some suppliers do not add any fees for handling, and freight is just a pass-through. In this instance, you may want to continue having your supplier pay the freight to save some time and money. But if you are trying to consolidate the number of trucks at your dock, and increase the control you have over inbound shipping, it might still be worth routing by your carrier, even if it will cost you more.
Another example of where inbound prepaid may continue to make sense is if your supplier has poor packaging. If you have a supplier that ships a high-value product with suspect packaging, you may want them to prepay and add the freight. Even if they are charging a premium for freight, you do not want to deal with the hassle if that shows up at your door damaged. You will be much better off refusing it and letting your supplier deal with the claims process if there are any damage issues.
Taking control of your inbound shipping may take a little work, but the final payoff is reducing your overall inbound freight spend. If you're ready to take control of your inbound shipping and you're not sure where to start, PartnerShip has the process, tools, and experience to help.
- We can provide a complete, inbound freight analysis to help you determine where you can save additional money on your inbound shipping
- We provide simple Inbound supplier/vendor management forms making it easy to choose which vendors you use most frequently
- We create updated routing requests and shipping instructions and then we contact your vendors on your behalf
- We maintain great relationships with the common suppliers in the industry to gain routing compliance
- We can provide inbound shipment visibility reports so you know exactly what was shipped to you and by whom
- We consolidate and audit all of your inbound freight bills so you can enjoy the simplicity of a single invoice with generous, net 20 payment terms
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Three Steps to Take Control of Inbound Shipping
05/08/2012 — Scott Frederick
Like many small businesses, you may not currently have control over the shipments coming into your business. It is common for small businesses to let the vendor shipping the product to you arrange the carrier, select the mode of transportation, and manage the actual pickup and delivery times. In some cases, the convenience of this sort of arrangement may work well for your situation. However, that convenience comes with a cost: you may find that you are paying significantly more for inbound shipping than if you had arranged for it on your own.
Reducing inbound shipping costs is one of the easiest, yet most overlooked ways to reduce your overall transportation expenses. Since you are the buyer of the goods, you can and should determine how those goods are shipped to you. When you control and route your own inbound shipments, you have an excellent opportunity to lower your costs.
Here is a quick, three-step process for getting control of your inbound shipping expenses:
Look at one or two invoices from your major suppliers. See what dollar amount they allocate for “shipping and handling.”
Compare your suppliers’ freight shipping rates with the rates you have in place with your preferred shipping provider. If you’re a PartnerShip customer, you can easily log into our website and perform a couple rate quotes to see how your freight rates compare (or just give us a call – we’ll do it for you).
If you find your rates are lower, draw up a letter for your purchasing department to forward to your suppliers providing details on how you want your products shipped, your small package carrier account number, and your preferred LTL freight carriers (again, PartnerShip can do all of this for you if you’d prefer). The letter also acts as an insurance policy if your supplier mistakenly ships by a carrier not on your routing letter. Having a signed letter allows you to charge vendors back for their mistakes.
Updating your routing instructions with all of your suppliers is the first important step in gaining control of your inbound shipping costs. Ensure your products are delivered to you via your preferred carriers and at your known rates. This takes the unpredictability out of inbound shipping costs, and can save you money in the process.
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