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5 Tips to Reduce Small Parcel Transportation Costs
Despite best efforts, most businesses today spend more on transportation-related costs than budgeted, or are necessary. In this article, we discuss how some simple changes or additions to your small parcel processing will help you; 1) reduce freight costs; 2) eliminate errors that result in carrier accessorial charges; and 3) improve the on-time delivery of customer orders.
In a recent Aberdeen Group survey of logistics executives who manage their organizations transportation management group cited increasing freight rates and/or accessorial charges as one of their greatest pressure facing transportation managers.
With rising fuel costs, ever increasing carrier tariffs, and accessorial changes, today's transportation managers are being asked to accomplish something that appears at times to be at odds; reduce transportation spend, but exceed customer expectations on delivery. While it is not the intent of this article to address all the problems facing transportation executives, we hope to share a few insights into areas that have helped shippers reduce transportation costs while at the same time enhance service levels to their customers.
Tip 1: Validate Addresses Prior to Shipping
The on-time delivery of a customer's order begins with a valid and deliverable address. While the most common errors are misspellings or "typos", omitting key address data such as suite or apartment number, street extensions (Rd., Ave., Blvd., Hwy., Expy., St., etc.) or directionals (W, S, SE, SW, N, NE, etc.) ensures that at best your customer's order will be delivered late, and at worse result in a return. Also, did you know that carrier's charge you between $7 and $10 for each bad address?
Tip 2: Mark Addresses as Residential or Commercial
Carriers invoice shippers a surcharge for delivery to residential addresses. When you consider that 91 of your annual freight costs by rate shopping. So, if you annual transportation budget for small parcel shipping is $850,000, your savings could range from between $ 25,500 to $ 59,000. Not bad.
Tip 5: Consolidate Orders into Fewer Shipments
Do you ship multiple orders to the same customer, on the same day? If so, being alerted at the time of shipping the first order that other order are out there, gives you the opportunity to consolidate all line items into fewer packages. Having visibility into each customer's orders at the time of packing and shipping does require technology, however. The good thing about this technology is that it not only alerts you to consolidation opportunities, but it also provides you with the ability to validate items and quantities as they are packed, capture lot and serial numbers, and account for the contents of each box and link it to the carrier's tracking number. Fewer packages, lower costs
About Nexxio
Since 2002, Nexxio has been a pioneering developer and vendor of high quality logistics software and services; with focus on providing complimentary and supporting technology to help our clients better leverage their investment in existing enterprise applications.
A privately held company located in Plano, Texas, Nexxio's clients range from small, privately held businesses to large, globally located, public companies. Common to all our clients, however, is the need to automate and streamline logistics processes, re-purpose logistics data to multiple front-line business operations and enterprise applications, and improve their bottom-line on costs and profits.
Nexxio's industry leading suite of solutions includes:
-NexxShip (Multi-Carrier Shipping)
-NexxPack (Packing Automation)
-NexxAddress (Address Validation)
-NexxStatus (Supply Chain Visibility)
Corporate Headquarters
2000 N. Central Expy - Ste 113 | Plano, TX 75075 | USA
Phone: 214-526-0014 | Fax: 972-424-1824 | www.nexxio.com | info@nexxio.com
