Over the last few years, carrier accessorial fees have increased at a much faster rate than the published base rates. Accessorial charges alone account for over 30% of a parcel carrier’s revenue. Fuel surcharges are calculated on the net package rate plus applicable transportation-related accessorial charges. In addition to these extra fees, shippers’ freight costs may be even higher in 2011 due to a recently announced change in the Dimensional Weight rating factor. For some shippers, this change could result in double-digit percent increases to the published freight prices. 

As a result, many organizations are looking for additional ways to mitigate expenses and improve processes as they finalize their 2011 budgets. While some may view the investment in a carrier-neutral shipping solution as simply a line-item expense, these systems make good business sense, as carriers want to maximize revenue while shippers want to minimize costs. Carrier-neutral shipping solutions can help organizations of all sizes better manage costs, enhance customer communication and improve processes. 

When evaluating shipping solutions, make sure you consider the following. Shippers will benefit most by seeing all services that can be delivered within a certain timeframe and associated costs rather than taking multiple steps or key strokes. This visibility maximizes a shipper’s opportunity of meeting delivery deadlines while better managing costs. So you want to look for a solution that maximizes service level selection among carriers. In doing so, a shipper can select a service based on a delivery requirement. All carriers and service levels within those carriers that meet that delivery objective are displayed. The system can reflect if the service is guaranteed or not, enabling the shipper to select one carrier versus another if the delivery need is critical. 

Also inquire if the system provides an indicator tool to reflect residential addresses. Shippers will have an indication when a Residential Delivery Surcharge (RDI) is likely and be able to consider the additional fee when selecting a carrier and service level. RDI data can also be used to evaluate and manage overall shipping spend.

Another key component is address validation functionality. Shippers should consider to what degree the system provides address corrections. Look for a solution that goes beyond the city, state, ZIP Code level. Instead, look for a solution that provides address information to the street level and indicates when a suite or apartment number may be missing. This functionality will help maximize timely deliveries while significantly reducing the number of address error fees a carrier may charge.

Options may also be important to some shippers that do not wish to put all of their “eggs in one basket.” Ask if the system includes courier services and regional carriers. Using these carriers could help reduce shipping costs and in some cases improve delivery service. Further, if a shipper decides to eliminate or add a carrier to a carrier-neutral system, there is little to no learning curve. 

Also consider the value of shipping solutions that provide conditional logic or business-rules functionalities. For example, if a package is going to “x” location, use “x” carrier. Another example is when a certain user group or a particular service is selected, such as early morning delivery, the system can prompt for an authorizing signature. 

Information is powerful in managing expenditures and enhancing cash flow. The accounting and carrier performance capabilities of carrier-neutral systems enable shippers to gather information based on criteria including: shipping location and destination; the service levels selected; weight of packages; and promptness of delivery. Interfaced shipping solutions can capture as much information as needed based on fields that are identified from multiple areas of the organization such as CRM platforms, customer service and sales. 

When shipping solutions are interfaced to an order management system, product can get out the door more efficiently and invoices generated more quickly. Shippers and customers can receive e-mail notifications that a shipment is on the way or was delivered. Interfaced solutions can maximize customer communications and positively impact cash flow while reducing days with sales outstanding.

As you evaluate shipping systems, look for solutions that optimize service selection based on cost and delivery objectives, offer alternatives to manage surcharges, and enhance rate and fee negotiations to help your organization achieve shipping success in 2011.

Elizabeth Lombard, CMDSM, CMDSS, MDP, MDC, EMCM, National Postal-Carrier Manager, Mailing Solutions Management Learning & Performance, Pitney Bowes Inc