How to Beat the Peak Season Surcharges

While we prepare to enter what could be the strangest and certainly one of the most challenging Holiday Peak Shipping Seasons (see here, here and here for more information), major parcel shippers are trying to figure out ways to avoid not only paying the higher Peak Season Residential Surcharges, but perhaps even more importantly, how to get their products delivered to their customers in a timely fashion.

There is no doubt that all major parcel and last mile delivery service providers will be even further “capacity challenged” in the coming weeks due to the incredible, explosive growth of online shopping during the Covid-19 Pandemic.   

There are obviously cost reduction strategies these major parcel and last mile shippers are considering, (or should at least be considering), including consolidating packages to reduce overall package volumes to help them stay under the volume caps imposed by the major parcel carriers.  

Another option that is being considered by these major parcel shippers is to encourage their customers to pick up packages at local shops and delivery lockers, in an effort to avoid paying additional residential delivery surcharges.

And finally, one option that is probably least attractive, is for these major parcel shippers to pass the Peak Season Surcharges on to their customers as a cost of doing business in these unprecedented times.  We doubt however that there is a great interest in taking this action as the expected negative customer feedback may not be worth the effort to recover some or all of these additional costs.

While these efforts may seem futile, shippers cannot afford to just roll over and play dead, as their very survival may depend on how they navigate through the service and financial challenges they will face during this upcoming Peak Shipping Season.

So, if there ever was a time to take a deep dive into a company’s transportation and logistics operations and spend management, now is that time.  Year after year we hear way too often from shippers that they don’t have the time to analyze and evaluate their current shipping characteristics in an effort to finally wrap their arms around what they are actually paying for shipping compared to what they should actually be paying. 

In addition to this “leave me alone, I’m busy” response, many shippers actually lack the ability to do a comprehensive deep dive into their own shipping data to determine exactly what their shipping characteristics are, based on package size, weights, origins, destinations, zones, services utilized, versus services that should be utilized, etc., you get the picture.  Also, what options are available between the many service providers in the marketplace, and even more importantly, how to make sure their shipments are attractive to those carriers to ensure win-win relationships. 

This all sounds very complex and it is if a company does not align itself with industry experts to help them navigate through these complexities, but merely try to “go it alone” if they do not have the necessary resources in-house. But the good news is there is help available, and that help involves working with an independent third party logistics consultant who can perform the necessary data mining analyses, report their findings and provide comprehensive benchmarking capabilities to clearly establish what are the best service and freight cost options available. 

Typically, these firms work on a success fee basis, meaning their only compensation is derived as a percentage of the “actual savings” they achieve as a result of providing their comprehensive analytical and negotiation strategy efforts. 

Companies should always negotiate from a position of strength, and by utilizing a third party expert to walk you through the complexities of rates, surcharges, fees, contract terms and conditions etc., your company will be perfectly positioned to obtain the best value for your company, even in these crazy times. 

Think your firm has the best available rates for the services provided?  Let our team of specialists benchmark those rates so you can FINALLY be sure.  And if not, there could be hidden profits that you’ve been missing.

Wonder how we do it?