Have you made a list of New Year’s resolutions? Did you include popular items such as losing weight, spending more time with family and friends, or getting organized? While you’re working to improve yourself this year, it’s also a good time to fine-tune your business by expanding into international shipping or identifying ways to reduce the budget while maintaining high service levels.
With each new year come rate increases from all the major carriers. Without a comprehensive understanding of how these upfront, hidden and back-end costs impact the bottom line, you could be losing more than just unwanted pounds this year.
Get Bright About DIM Weights
You’re most likely aware many shipping firms increased their prices from 5 to 5.9 percent in January, while the USPS changed international rates by 3 to 3.9 percent. FedEx and UPS also reduced the divisor in the Dimension weight formula from 166 to 139. For many, this change will result in significantly higher prices for international shipments falling under DIM weight fees. However, not all shipping firms apply DIM weight fees across the board. The USPS doesn’t charge DIM weight fees on Express Mail International (EMI) and Priority Mail International (PMI) shipments. For Global Express Guaranteed (GXG), only select shipments fall under the DIM weight fee, since they are delivered by FedEx and subject to these charges.
Packaging Perks
Take a deep dive into the percentage of total shipping costs attributable to packaging, which can significantly add to your overall shipping budget. Some carriers provide packaging supplies at no cost. The USPS offers free GXG, EMI and PMI packaging for international shipments, along with a variety of Priority Mail Flat Rate options for international shipments. All EMI shipments, including Flat Rate Envelope options, offer date-certain delivery to ten of the top export destinations. If maintaining a consistent brand is a corporate requirement, consider a customized or cobranded Flat Rate Box with your corporate logo, which are available to qualifying USPS customers.
Downsize to Economize
Look into ways to reduce the overall size of your shipping containers or consider USPS Flat Rate Shipping options. A variety of Priority Mail Flat Rate Box options are available, and items shipped in these containers ship for one flat rate. A limit of 70 pounds applies for domestic shipments, while international shipments can hold up to 20 pounds for medium-size and large boxes. If it fits its ships around the block or across the globe.
Conserving Cash
Consider switching to an online shipping solution or PC Postage provider. This provides you with the flexibility to pay as you go rather than tying up funds in an account requiring upfront funding. This move alone will make you a hero with the CFO, since your firm will have greater control over its cash management. These options may also help qualify you for commercial pricing discounts, such as 10 percent for GXG, 8 percent for EMI, and 5 percent for PMI. You’ll also simplify your life since this classification reduces the complication of customs documentation. Most PC Postage providers offer software that generates a cost comparison by piece and identifies the carrier offering the best price. The software calculations include surcharges, net minimums, and can be programmed to include quoted discounts so you are assured of getting the best price for international shipments.
If you do a lot of business internationally or are looking to expand beyond the U.S., you may qualify for special pricing such as a Global Expedited Package Agreement (GEPS) with the USPS, and save even more. To find out if you qualify for a GEPS, contact globalbusiness@usps.gov.
Surcharge Surgery
Other cost factors have increased in 2011, including those dreaded surcharges. Some, like fuel surcharges, can be pricy and add significant costs to your shipments, making it almost impossible to budget your shipping costs for the entire year. The Postal Service does not add surcharges.
Slam Dunk Net Minimums
When prices go up, so do Net Minimums. Net Minimums represent the lowest price that a carrier will ship an item; provided your company meets an agreed upon volume over a specific period of time. The cost is usually the 1 pound rate for that zone of the world or country. As prices go up so does the 1 pound rate and the Net Minimum amount. This can significantly reduce or eliminate quoted discounts touted by carriers, depending on the weight of the shipments.
Clearing Up Visibility
During tight economic times, many shippers look to reduce costs by selecting slightly longer transit times in exchange for better prices, while holding the line on service levels. Those that look into PMI are pleasantly surprised to see that visibility levels have improved significantly as many foreign posts have implemented processes to guarantee visibility performance, giving shippers another strong option for international shipping.
So while you’re making good on those resolutions by sweating it out at the gym or spending more time with friends and family, remember that the time spent organizing your international shipping operations means you won’t have to sweat out surprise costs, and that’s a financial reward that pays its way year long.
With each new year come rate increases from all the major carriers. Without a comprehensive understanding of how these upfront, hidden and back-end costs impact the bottom line, you could be losing more than just unwanted pounds this year.
Get Bright About DIM Weights
You’re most likely aware many shipping firms increased their prices from 5 to 5.9 percent in January, while the USPS changed international rates by 3 to 3.9 percent. FedEx and UPS also reduced the divisor in the Dimension weight formula from 166 to 139. For many, this change will result in significantly higher prices for international shipments falling under DIM weight fees. However, not all shipping firms apply DIM weight fees across the board. The USPS doesn’t charge DIM weight fees on Express Mail International (EMI) and Priority Mail International (PMI) shipments. For Global Express Guaranteed (GXG), only select shipments fall under the DIM weight fee, since they are delivered by FedEx and subject to these charges.
Packaging Perks
Take a deep dive into the percentage of total shipping costs attributable to packaging, which can significantly add to your overall shipping budget. Some carriers provide packaging supplies at no cost. The USPS offers free GXG, EMI and PMI packaging for international shipments, along with a variety of Priority Mail Flat Rate options for international shipments. All EMI shipments, including Flat Rate Envelope options, offer date-certain delivery to ten of the top export destinations. If maintaining a consistent brand is a corporate requirement, consider a customized or cobranded Flat Rate Box with your corporate logo, which are available to qualifying USPS customers.
Downsize to Economize
Look into ways to reduce the overall size of your shipping containers or consider USPS Flat Rate Shipping options. A variety of Priority Mail Flat Rate Box options are available, and items shipped in these containers ship for one flat rate. A limit of 70 pounds applies for domestic shipments, while international shipments can hold up to 20 pounds for medium-size and large boxes. If it fits its ships around the block or across the globe.
Conserving Cash
Consider switching to an online shipping solution or PC Postage provider. This provides you with the flexibility to pay as you go rather than tying up funds in an account requiring upfront funding. This move alone will make you a hero with the CFO, since your firm will have greater control over its cash management. These options may also help qualify you for commercial pricing discounts, such as 10 percent for GXG, 8 percent for EMI, and 5 percent for PMI. You’ll also simplify your life since this classification reduces the complication of customs documentation. Most PC Postage providers offer software that generates a cost comparison by piece and identifies the carrier offering the best price. The software calculations include surcharges, net minimums, and can be programmed to include quoted discounts so you are assured of getting the best price for international shipments.
If you do a lot of business internationally or are looking to expand beyond the U.S., you may qualify for special pricing such as a Global Expedited Package Agreement (GEPS) with the USPS, and save even more. To find out if you qualify for a GEPS, contact globalbusiness@usps.gov.
Surcharge Surgery
Other cost factors have increased in 2011, including those dreaded surcharges. Some, like fuel surcharges, can be pricy and add significant costs to your shipments, making it almost impossible to budget your shipping costs for the entire year. The Postal Service does not add surcharges.
Slam Dunk Net Minimums
When prices go up, so do Net Minimums. Net Minimums represent the lowest price that a carrier will ship an item; provided your company meets an agreed upon volume over a specific period of time. The cost is usually the 1 pound rate for that zone of the world or country. As prices go up so does the 1 pound rate and the Net Minimum amount. This can significantly reduce or eliminate quoted discounts touted by carriers, depending on the weight of the shipments.
Clearing Up Visibility
During tight economic times, many shippers look to reduce costs by selecting slightly longer transit times in exchange for better prices, while holding the line on service levels. Those that look into PMI are pleasantly surprised to see that visibility levels have improved significantly as many foreign posts have implemented processes to guarantee visibility performance, giving shippers another strong option for international shipping.
So while you’re making good on those resolutions by sweating it out at the gym or spending more time with friends and family, remember that the time spent organizing your international shipping operations means you won’t have to sweat out surprise costs, and that’s a financial reward that pays its way year long.
