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Demystifying logistical expenses from first click to last mile

Shipping may be a variable figure from business to business, but it’s always a significant one. Every January 4th, carriers increase prices between 4-6%. Economies shift, fuel prices spike and trade agreements sour — how can a shipper hope to save any money?

The key is to make the entire shipping process transparent from first click to last mile so carriers and other logistics partners are held accountable for all unnecessary additions to a shipper’s expenses. 71lbs has made shipping transparency our business by educating and empowering our customers with knowledge and actionable tools that put them in charge of their shipping costs.

Let’s run down the main tips for minimizing logistical expenses and other things your business can do to ship smarter.

Understanding your shipping information

“Incoterms.” “Harmonized Tariffs.” “Parent and Child.” If these shipping terms seem mysterious to you, you’re not alone. The first step to optimizing shipping costs is knowing carriers don’t make them easy to understand. From freight duty and tax to summaries, country of origin and more, breaking down invoices piece by piece empowers shippers with the knowledge to take full control of their shipping spend.

Choosing the right shipper based on key factors

Every business is unique with its own shipping profile. Choosing a carrier who understands this can save them a lot in expenses in the long run. Standard postal options are better suited to smaller packages, while carriers like FedEx or UPS are a better fit for bulkier items. Other factors such as delivery distance, time window and nature of goods also play a part in carrier selection and overall shipping spend.

Don’t let carrier boasts sway your decision. Learn how size and other factors affect your choice and what the big carriers claim they can do to help.

Negotiating contracts 

Blind faith in big shipping companies like UPS or FedEx can cost a business dearly. We know it’s tempting to believe they’re doing the best possible job. It’s also understandable that businesses may feel they don’t have any negotiating power with such big companies.

Both mindsets can rob businesses of refunds and bury them in hidden charges. So, shippers should learn how to negotiate a revision of their carrier contract that is not only best for them today but will also be flexible if things change tomorrow.

Utilizing automated shipping-auditing

The cost of not auditing your shipping can be extreme, and yet the alternative is almost as bad for shipping managers. Invoice auditing is a demanding and time-consuming process that many businesses grow tired of no matter how much scanning shipping receipts may help their bottom line.

It's a complex and time-consuming effort, which requires a deep investment in terminology, semantics, and carrier contracts, which many companies do not have the in-house resources to afford. Automated auditing with a human touch provides a far greater ROI by being faster, more thorough and data-driven.

This consistent, time-saving approach reduces your labor and catches carriers every time they drop the ball. It grants your business enough potential savings to easily afford automated audits and focus your team's efforts where they’re needed.

Logistics

eCommerce is a $5.3 trillion market that has rewritten shipping logistics, driven by demand from consumers to get goods as quickly as possible.

Statistically, no logistical concern is more important than the Last Mile — a distance that accounts for over half of delivery costs. An estimated 28 percent can be eaten up by traffic problems, with package theft and hours of paperwork also draining shipping budgets.

Every business must know the basics of eCommerce logistics at scale in order to understand the complications that may arise and how much those setbacks could cost them. No logistics system is perfect, so paying a little extra for shipping insurance could lead to big savings in the long-term.

eCommerce 3PL

The demands of eCommerce make it almost a necessity for shippers to lean on third party logistics (3PL), especially as their business grows. 3PL providers offer shipping solutions, storage options and delivery/distribution services. This sounds like a great deal, doubly so when shippers can benefit from the industry experience of 3PL providers domestically and internationally.

The downside is that the more logistical control you pass onto others, the more they become responsible for your business performance. When they perform poorly, shippers pay the price. Understanding 3PL is crucial to making the most cost-effective decision, as is keeping a logistical eye on your goods via Premium Analytics.

Less than truckload shipping (LTL)

Sometimes, waiting until a truck is filled before starting deliveries is too costly. The time delay to fill the truck to capacity means losing sales and dealing with impatient customers who could take their business elsewhere. This makes LTL a good alternative for any business moving goods on the lighter side.

LTL allows businesses to ship more regularly, paying only for the portion of truck space that they use; the rest is paid for by other companies claiming room on board. LTL loads are typically more secure in transit due to how the freight companies pack these loads, further reducing costs like on-the-road damage and loss.

SaaS

Software as a Service (SaaS) is an investment that lets shippers run their operations around the clock from any location and protects supply chains against costly disasters like data loss and downtime. SaaS is more cost-effective in an era where data is currency. The platforms are continually being upgraded and costs are spread among their user bases, making it affordable and scalable enough for small businesses to access capabilities that would otherwise be reserved for larger companies.

Premium Tracking and the post-purchase experience

The Post-Purchase Experience (PPE) begins the instant a transaction is made. Shipping research reveals 96 percent of consumers consider the ability to track their shipments important, whether that means having a probable delivery date or even more precise information. The more data shippers can generate, the happier their customers will be.

Premium Tracking boosts productivity and reduces operating costs by freeing staff from answering customer delivery questions because they’re already informed with a personalized tracking page. This creates more engagement and satisfaction while lowering the risk of losing future business. In addition, first-rate tracking and analytics help prevent package loss, which goes a long way to keeping customers happy and preventing time-consuming and costly searches.

Why 71lbs?

Navigating the shipping process needn’t be a confusing journey. 71lbs can educate your staff and eliminate needless expenses, all without charging anything for monthly fees or even to sign up. It’s our mission to work on your behalf to gain refunds, monitor shippers and make your shipping expenses as clean-cut and cost-effective as they can be.

Connect with us and we’ll answer any questions you have about putting shipping control back in your hands.