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Small Parcel Audit

Optimizing Your Business Health with a Follow Up Exam

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Follow Up Exam

Last month, we released the article, Optimize Your Business Health: Why Now is the Perfect Time for a Small Parcel Transportation Checkup, that drew parallels between personal health, and the health of the Small Parcel marketplace. In this article we pointed out how important it is to pay close attention to your Small Parcel Transportation program and market place, the same way that you should pay close attention to your own health. Failure to do so in either case could have long lasting, dire results.

So, our question is, have you been following the news in the Small Parcel market for the past month? Are you aware of the potential epidemic that could be coming your way? If not, you could be heading for trouble a lot quicker than you think!

Call an Ambulance???

Just like your own health, the conditions of the Small Parcel Market can change very quickly. So, it is important to check the temperature of the market, and take appropriate actions based on the results. If you checked your own temperature and noticed that you were running a fever of 102 degrees, would you just ignore it?? Most likely not. You might take an aspirin and get some rest. If this didn’t help, you would probably call your Doctor.

Our blog presented a pretty solid case that demonstrated that the temperature of the Small Parcel marketplace was pretty hot. The fever for packages being driven by UPS and FedEx’s attempts to improve their financials, created the need for shippers to consider a visit with a qualified professional, or in the case of the Small Parcel Market… an expert Logistics consultant!

At this point, if you have ignored the symptoms of a potential illness, you could be facing a trip to the Emergency Room! Failure to gain control over your parcel rates now, could lead to more serious issues in the future. Once again, you are probably wondering where we are going with this!

Based on what we are hearing; we feel that there are some pretty serious things brewing that could lead to a major down turn in the health of the Small Parcel market place.   We are referring to the changes being considered and proposed by the United States Postal Service (USPS).

Basically, the USPS is pushing for an increase in rates for their Parcel Select Service. This is a shipping solution typically used by high volume shippers, or consolidators to inject packages deeper into the USPS network vs. injecting them close to the shipper’s origin location. These packages are dropped off at USPS regional sorting facilities that are closer to consignees, or even at local Post Office locations (or DDU’s/ Destination Delivery Units as the USPS calls them).

On May 10th, the U.S, Postal Service filed notice with the Postal Regulatory Commission, (PRC) for Parcel Select price changes to take effect July 14, 2024. The proposed rates include an average 25-percent increase for Parcel Select service.  The proposed increases for Parcel Select packages being dropped at local Post Offices/ DDU’s are as much as 43%!

It appears that the USPS is attempting to make it unattractive for consolidators to inject packages at certain facilities. There is speculation that they are pushing to improve their profit margins by forcing consolidators to inject packages further upstream, at a higher cost.

Some companies and services that utilize USPS Parcel Select service include; DHL e-commerce, OSM Worldwide, Amazon, Pitney Bowes, UPS Mail Innovations, and UPS SurePost and more.

Don’t think that your safe since you’ve been vaccinated!

Some folks that are reading this might be thinking, “I’m immune from the impact of this, since I don’t use any of these carriers or services.” Sorry but that shot that you received a while back is not going to help you. Neither will the booster! All shippers could be infected/ affected by the changes being proposed by the USPS.

If these increases go through, it could have a big impact on capacity for carriers in the Small Parcel Market. For example, UPS may choose to move more SurePost packages that are normally delivered by the USPS back into their own Small Parcel delivery network, which would decrease capacity for all UPS shippers.

What would Amazon do with the packages that they normally hand over to the USPS? They could pass this volume over to other carriers as well.  The bottom line is that this could lead to decreased capacity in the Small Parcel market, and everyone knows that decreased capacity = increased rates!

For shippers using any of these consolidation services, they will surely be hit with major price increases from their carriers if this proposed pricing is approved. So, the bottom line is that this could have a ripple effect on pricing across the entire Small Parcel market place.

There is a lot of debate online regarding whether or not these increases will be approved by the PRC. There are also questions regarding how these changes might impact existing agreements that the USPS has with the big users of these services. Obviously there are many people and companies opposed to this. There is also a lot of concern that this could further damage the profits of the already struggling USPS.

So, these increases are not imminent. However, just as one should not ignore things that could impact their own health, they should not ignore things that could have a negative impact on the health of their Transportation program or company profits!

Should I go for surgery or just Another Booster?

Once again, shippers are left to consider their options and precautionary measures that they should be taking. There are many different questions that shippers should be asking themselves now. For example, should I be considering alternatives to services that utilize USPS Parcel Select now? If I’m not using these services, is my current carrier agreement going to protect me from unforeseen increases? Will my current Transportation program protect me from tightening capacity in the Parcel Market? What cost cutting measures can I take now, to offset increases that could be driven by these potential increases?

As you can see, there are a lot of complexities to consider with this scenario. The whole situation could be considered pretty scary, given the unknown outcomes. This is not any different than the uncertainty and fear that one can experience when diagnosed with a potentially serious illness. But when this happens with your health, what do you do? Most rational human beings will turn to the experts to determine the best course of action.

Do we really need to provide any more insight regarding how you should handle this? As we stressed in our last blog, we don’t charge any copay for our thorough Transportation and Logistics examination. Also, the outcomes of our engagements are always positive. So, please reach out to us today to take advantage of the free transportation health insurance that we offer to avoid out of control cost increases!

Strategic Approach to Reverse Logistics

Turning Returns to Revenue: Mastering Reverse Logistics

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Reverse logistics plays a crucial role in logistics and supply chain management, though it’s often overlooked. As companies seek more efficiency and cost savings, being good at managing returns is becoming vital for a competitive edge. This blog looks closely at reverse logistics, providing a clear industry outlook and practical strategies for businesses wanting to improve this key operation.

The Rise of Reverse Logistics

Reverse logistics involves moving goods back to the company for return, repair, recycling, or disposal. It’s become essential in logistics. With the growth of e-commerce and changes in consumer expectations, managing returns efficiently is more important than ever.

The reverse logistics market is growing due to more returns, stricter rules, and increased focus on sustainability. This growth brings new opportunities and challenges for businesses.

Top Strategies for Better Reverse Logistics

  1. Clear Return Policies: Have easy-to-understand return policies. Clearly state the process, including time limits and rules, to reduce confusion and make returns smoother.
  2. Efficient Processing: Make your return process quicker and more cost-effective. Use technology that helps speed up and improve the accuracy of processing returns.
  3. Use Data Analytics: Apply analytics to find out why returns happen. Spotting trends can lead to changes in product design, packaging, or customer service, reducing the number of returns.
  4. Build Strong Partnerships: Work closely with logistics providers, suppliers, and third-party services. A strong network helps manage the flow of information and products better, increasing efficiency.
  5. Eco-Friendly Practices: Focus on environmentally friendly ways to handle returns. Methods like refurbishing can help the environment and cut costs.
  6. Adopt New Technologies: Embrace the latest technologies to manage reverse logistics better. Automated systems and real-time tracking can significantly improve efficiency.

Taking a Strategic Approach

Mastering reverse logistics is vital and strategic. By taking proactive steps and investing in the right technologies and partnerships, businesses can turn reverse logistics into an advantage. This leads to cost savings and better customer loyalty.

We are here to help your business overcome these challenges. With careful planning, straightforward policies, and innovative technologies, you can manage reverse logistics confidently and succeed over the long term.

Contact us today

Optimize Your Business Health: Why Now is the Perfect Time for a Small Parcel Transportation Checkup

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Time for a Checkup!

Everyone knows how important it is to pay close attention to their personal health. Health guidelines will tell us that we need to have a physical once a year, see a dentist every six months, or to start having specific tests done once you reach a certain age.  Failure to abide by some of these guidelines or ignoring environmental issues could have painful, even dire results.

It is even more important to get engaged with your doctors if you notice any changes in your body, like new aches and pains, less energy, or if just don’t feel right. We are fortunate that our bodies can provide us with signs that it is time to check things out!

Where are we going with this?

At this point, you might be wondering why a Logistics company is writing an article about personal health?? Well the reason for this is that we feel that you can draw a parallel between how you approach your personal health and the way that you address the health of your current Small Parcel Transportation program!

However, the difference is that there are no specific guidelines that tell you when it is time for a Small Parcel program checkup.  Also, there may not be any obvious signs that you have issues with the health of your Small Parcel agreement or shipping program. Unfortunately, the uncertainty of how and when to examine your existing Transportation program can lead to undetected internal bleeding……. OF YOUR PROFITS!

Is it time for a Physical?

One of the first things that you need to consider when trying to determine if it’s the right time to assess the health of your Transportation program, is current market conditions. You need to “Check the Pulse” of the Small Parcel market, to determine if it’s safe to proceed. You don’t want to open negotiations in a market where capacity is tight, or when carriers are trying to boost margins. This could actually lead to worsening of health of your transportation program!

If you are wondering if current market conditions are appropriate to consider moving forward with an exploratory surgery of your Small Parcel agreement, the answer is an overwhelming YES! Recent developments in the Small Parcel arena have suggested that now is the perfect time to make a move.

Over the past few weeks, there have been some interesting developments with the major Small Parcel carriers that help to confirm that these carriers are, and will continue to battle for packages. First, there was the news that UPS had been awarded a significant air cargo contract by the United Stated Postal Service (USPS). This new agreement will greatly expand the existing relationship between the two organizations. The important thing to realize is that this business had been previously been handled by FedEx.

So, we feel that this will likely contribute to greater intensity in the battle for packages between UPS and FedEx. The loss in revenues that this will cause, along with the additional Air capacity this will create, will likely inspire FedEx to offer more competitive rates for Express packages.  This will help to intensify the battle for Air packages that typically provide higher margins for Parcel Carriers.

From the UPS perspective, they are still pushing hard to win back volumes lost last year during the Teamster negotiations. We have recently heard from customers that they are seeing more aggressive UPS discounting and pricing, in an effort to win back their volumes.

Also, in an interview on CNBC on March 26th, UPS CEO Carol Tome’ outlined her “1+2” plan to improve UPS Financials. She described that year 1 initiatives will revolve around efforts to grow “Volume, Revenue and Operating –Dollars”, and that years 2 and 3 they will concentrate on “Volume, Revenue, and Operating –Margin”. So, in our eyes, this can only be beneficial for shippers as when carriers stress their desire for volume and revenue growth, it typically suggests a willingness to increase discounts.

So, to sum things up- It’s time to book your appointment with your Doctor!

How to choose a doctor?

So now that you know that is time for an assessment of your Shipping program, what do you do?  You could just call in your carrier representative and tell them that you are looking for better rates, because you know that they are looking for volume. You can threaten to move your business “to the other guys”. However, we can tell you that this will most likely result in your carrier providing you with a lot of detail and presentations related to how their service provides tremendous value to your company. This will probably lead to a long, drawn out process, that will end with little or no movement on rates. Remember, the longer the process goes on, the longer you could be bleeding profits!

Basically, trying to negotiate your agreement without the help of the experts, is like trying to do your own personal health physical. Would you really consider checking all of your own vitals, and assessing your health based on information that you find on Google???

So, if you are really concerned about the health of your Logistics program you really need to engage with a company that has an in depth understanding of Carrier agreements and pricing. It is crucial to take a deep dive into the contents of your carrier agreements, including rates, discounts, and terms and conditions. You will need to understand how your agreement stacks up compared to other companies with similar shipping characteristics in order to determine if you have unhealthy agreements.

The best part of this is that the companies that provide these services (including ICC Logistics), do not charge a co-pay for a Transportation Program check-up!

Time for Surgery

Once the health of your Transportation and Logistics program has been properly assessed by a professional, they may find that you are in good shape and that there is no need for further action. Or they may find that you have some issues, and need to take action to avoid continued damage to the overall health of your business.

The bottom line is that there will need to be a solid strategy built to help cure the issues that are having a detrimental affect on your profits. This is the same thing that Doctors do when they identify a major health issue. They will prepare a plan of attack that will help to ensure the best outcome.

Please reach out to us today so we can explain how our surgical approach to negotiating Carrier contracts can help to ensure the long term health of your profits and business. We can assure you that you will be able to get an appointment with us a lot faster than you can get one with your Doctor!

Navigating FedEx and UPS Surcharge Changes: What You Need to Know

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As businesses brace for ongoing shifts in the shipping industry, recent announcements from FedEx and UPS regarding upcoming surcharges for deliveries in specific ZIP codes have sparked concerns and raised questions about navigating these changes effectively. Let’s delve into the details of these surcharge updates and their implications for your business.

Key Takeaways:

  • FedEx and UPS will add surcharges for deliveries in 82 ZIP codes this month, many of which cover parts of major urban areas, according to updates from both companies.
  • These newly announced changes to Delivery Area Surcharges are in addition to additions/ changes made with carrier General Rate Increases at the beginning of this year.
  • The delivery area surcharge, or DAS, for the new ZIP codes will take effect on April 8 for UPS and April 15 for FedEx. The additions will impact areas in Boston, Chicago, New York, Los Angeles, and San Francisco.
  • The DAS ranges between $3.95 and $5.85 for FedEx and UPS, but that can climb higher in areas with ZIP codes categorized as “extended” or “remote.” The surcharge amount is influenced by the package being shipped via ground or air transportation and if it’s a commercial or residential delivery.
  • UPS also announced that “Effective June 17, 2024, the applicable zone will change for certain origin/destination ZIP code pairs.”

What Are Delivery Area Surcharges?

Delivery area surcharges (DAS) are additional fees imposed by shipping carriers like FedEx and UPS for delivering packages to specific geographic areas. These surcharges are applied when a package is being delivered to locations that are deemed more remote or difficult to access, such as certain ZIP codes or rural areas. The rationale behind DAS is to offset the higher costs associated with delivering to these locations, which may require additional time, resources, and logistics planning.

DAS amounts can vary based on several factors, including:

  1. Geographic Location: Certain ZIP codes or regions may be categorized as “extended” or “remote,” leading to higher surcharge amounts.
  2. Delivery Type: Whether the package is being delivered to a commercial or residential address can influence the surcharge rate.
  3. Transportation Mode: Whether the package is shipped via ground or air transportation can also affect the surcharge amount.

It’s important for businesses and consumers to be aware of DAS as it can impact shipping costs and delivery timelines, especially for shipments to areas subject to these surcharges. Understanding carrier policies regarding surcharges helps in accurately estimating shipping expenses and planning logistics accordingly.

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Understanding FedEx & UPS Audits

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Navigating the Logistics Maze: Understanding FedEx & UPS Audits

In the world of logistics and supply chain, efficiency is the key to successful operations. Businesses rely on FedEx and UPS to deliver their products swiftly and safely to customers around the globe. However, with the complexity of shipping contracts, service agreements, and surcharges, it’s easy for errors to occur, leading to overcharges and unnecessary expenses. That’s where FedEx and UPS audits become a company’s secret weapon to cost savings and optimization.

Understanding the Basics

A FedEx & UPS audit is essentially a thorough review of shipping invoices to identify billing errors, overcharges, and discrepancies. These audits are typically conducted by third-party companies, specializing in parcel auditing services. The goal is to ensure that businesses are paying the correct amount for their shipping services and to recover any refunds owed due to billing errors or service failures.  Finding the right company to perform the audit is essential. Look for a company with experience and a proven track record of success in uncovering invalid charges and billing inaccuracies.  

How It All Works

The audit process involves several steps:

  1. Data Collection

The auditing company collects electronic shipping data from the business, including tracking numbers, and complete shipment details. This information provides a comprehensive overview of the company’s shipping history and expenses.

  1. Analysis

Experienced auditors, using sophisticated analytical software, analyze the shipping data to identify potential billing errors and overcharges. This includes examining factors such as incorrect weights or package dimensions, improper service charges, late deliveries, and all billing discrepancies.

  1. Claim Submission

Once errors are identified, the auditing company submits claims to FedEx and UPS on behalf of the business. These claims outline the specific errors found and request refunds or credits for the overcharged amounts.

  1. Refunds and Credits

FedEx and UPS typically have refund policies in place for billing errors and service failures, but they must be claimed in a timely basis in order to obtain refunds, so timing is of the essence.  Once the claims are processed and verified, the carriers issue refunds or provide credits to the business’s shipping account.

  1. Reporting

Throughout the audit process, the auditing company provides detailed reports to the business, outlining the findings, refunds obtained, but more importantly, potential cost-saving opportunities for future shipments which can be significant.  

Remember: Not all logistics consultants are created equal.

UPS audits

Benefits of FedEx & UPS Audits

Cost Savings

One of the primary benefits of conducting FedEx and UPS audits is cost savings. By identifying and rectifying billing errors and overcharges, businesses can reduce their shipping expenses and improve their bottom line.

Improved Accuracy

Audits help businesses ensure the accuracy of their shipping invoices, eliminating discrepancies and billing errors that can arise from complex rate structures and surcharges.

Time Savings

Outsourcing the audit process to third-party companies saves businesses valuable time and resources. Instead of manually reviewing invoices and tracking down errors, they can focus on core operations while experts handle the audit process on their behalf. It also gives businesses the opportunity to leverage years of experience and expertise that audit companies have in-house, for their own benefit, without the expense of hiring.

Performance Monitoring

Audits also provide valuable insights into carrier performance, including on-time delivery rates, service failures, and areas for improvement. This information enables businesses to make informed decisions about their shipping strategies and carrier partnerships– as well as creating data for additional optimization through parcel carrier negotiations.

The video below gives a fast and easy explanation on how audits work and why they can be so valuable to a business. Take a look!

Conclusion

In today’s competitive business landscape, every penny counts. FedEx and UPS audits offer a proactive approach to managing shipping expenses, ensuring that businesses only pay for the services they receive. By partnering with experienced auditing companies, businesses can streamline their shipping operations, reduce costs, and enhance overall efficiency. In the complex world of logistics, audits provide a valuable tool for navigating the maze of shipping contracts and tariffs, ultimately leading to cost savings and improved profitability.  Ready to get started and see immediate value? Reach out to our parcel carrier experts and get started.  

 

UPS invoice audit services

Poor Data Quality and Logistics

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Securing the Future of Logistics: Combating Profit Loss with Enhanced Data Capture

The logistics industry, a labyrinth of moving parts and data streams, is increasingly vulnerable to the silent scourge of poor data capture. 

This isn’t mere inefficiency; it’s a financial sinkhole that can quietly bleed companies dry, with the potential loss averaging a staggering $12.9 million each year due to poor data quality. 

The ripple effects are manifold: from product mislabeling to inventory errors, businesses find themselves grappling with inflated operational costs and delayed decision-making, necessitating an urgent shift to smarter data-capture strategies. 

Harnessing Analytics for Strategic Advantage 

Predictive analytics tools and strategies have become an industry standard for supply chain managers.  These sophisticated tools parse through extensive data sets, enabling enhancements across the supply chain spectrum—from judicious carrier selection to acute risk management. 

The integration of big data is particularly transformative, equipping organizations with comprehensive visibility and the agility to make decisions in real-time, crucial for keeping pace with the volatile ebb and flow of market requirements. 

The Ripple Effect of Data Capture Failures

In a survey among logistics managers, a striking 41% of professionals rank data analysis as a top technological priority. 

Yet, this focus contrasts starkly with the harsh reality that the effectiveness of analytics is often severely compromised by subpar data capture practices. Inadequate data collection acts as a critical bottleneck, warping the flow of information crucial for advanced analytical systems. 

This distortion leads to a series of strategic errors: inefficient carrier routes, skewed risk assessments, and a clouded view of supply chain operations. These disruptions not only impede immediate operational effectiveness but also pose a significant threat to the long-term strategic position in an industry increasingly dominated by data-driven decision-making.

Operational Inefficiencies and Employee Impacts 

In the logistics sector, each error in data capture acts as a multiplier of operational inefficiencies, driving up costs and eating into profit margins. But the implications extend into the workforce as well. With a significant percentage of employees facing burnout due to inefficient processes, the need for an overhaul of data-capture systems is clear.

Closing gaps in data capture is not only crucial for the financial vitality of logistics operations but also for bolstering the employee experience. Improving data capture methods enhances job efficiency, reduces the strain on employees, and ensures adherence to safety standards, creating a more engaged and compliant workforce. These improvements are essential in building a sustainable, resilient, and employee-friendly logistics environment.

AI and Machine Learning: The New Frontier 

The logistics sector’s adoption of AI and machine learning algorithms is not just an upgrade—it’s a paradigm shift. These technologies are critical in deciphering complex demand patterns and translating them into accurate forecasts, with the potential to reshape the industry’s approach to inventory and risk management. 

The transformative power of AI in the logistics market is expected to exceed a valuation of $17.5 billion by 2028, underscoring the profound impact these tools will have on the profitability and resilience of supply chains.

Embracing Change for Profitability 

Companies can no longer afford to ignore the silent killer of profitability, which is poor data capture. To navigate a path to efficiency and resilience, the sector must embrace the data revolution, investing in technologies that not only predict the future but also create it. 

A commitment to this digital evolution is the first step towards safeguarding against the unpredictability of global markets and securing a profitable future.  Ready to take that step?  Contact our data experts today to learn more!