Its not unusual to put on a little extra weight over the holidays, but some companies were surprised when their invoices for package shipping arrived in February looking like their packages had also put on a couple of pounds. The culprit? Increased surcharge fees levied by their parcel carriers in January plumped up the price of some packages by as much as 25% or more.
Shippers looking to shape up their bottom line are moving to a tried and true formula. Eliminate unwanted fat and dont forget to exercise! Fat-conscious companies know that its not the baked potato but the add-ons like butter, sour cream and bacon that tip the scales in the wrong direction. These companies are staying lean by identifying add-ons and cutting out back-end surcharges that bloat the bottom line. They are also exercising their shipping options where it makes sense to save a buck without sacrificing quality. A few simple moves are slimming down shipping invoices at many companies.
Give Your Address List a Makeover
Poor address hygiene can add flab to shipping costs. Businesses can dramatically reduce address correction and return fees by simply running their address lists through a CASS (Coding Accuracy Support System) certified address matching software, advises Rick Arvonio, Director, Product Management and Address Quality.
Customers may obtain CASS software directly from the Postal Service National Customer Support Center (NCSC) in Memphis, Tennessee or may choose to purchase the software from a CASS vendor. Companies may also send their mailing lists to a list processor who will clean up the mailing list for a small fee.
CASS Certified software will correct bad ZIP Codes, one of the most common causes of address correction fees and returns. A CASS cleanup will alert the shipper to multi-point addresses where an apartment or suite number is required, indicate undeliverable addresses and flag for a missing directional and correct some improper street suffixes such as road vs. place.
Starting August 1, 2007, (CASS Cycle L), CASS Certified ZIP + 4 address matching software will implement a correction and validation process before adding a ZIP + 4 Code to an address. CASS Certified software will accomplish this first by converting old style rural route and box number addresses to city-style addresses that have undergone a 911 emergency conversion, using the LACSLink product within CASS and will then validate the primary number with the DPV product within CASS, which validates delivery points. Only those addresses that have confirmable primary number information (street numbers or P.O. Box numbers, or, in rare cases, Rural Route Box numbers) will be assigned the proper ZIP + 4 Code from the USPS ZIP + 4 database. Those address records where the primary number does not DPV confirm will not receive a ZIP + 4 Code.
Will this new requirement affect you? Yes, in two ways. First, it will give you confidence in the quality of addresses in your database that have been ZIP + 4 Coded, knowing that your mail will reach your customer. Second, it will identify those addresses that would be undeliverable because there are problems with primary numbers, providing you with an opportunity to correct them prior to mailing. Overall, these new requirements in CASS Cycle L will help you to reach more of your intended recipients and avoid lost opportunities with your customers due to undeliverable-as-addressed mail.
LACSLink and DPV, working in conjunction with CASS Certified software, benefits both mailers and the Postal Service, says Arvonio. It helps mailers identify problem addresses that are undeliverable as addressed, also known as UAA mail. It saves postage and processing costs for mailers while reducing processing and delivery costs for USPS.
Learn Some New Moves
Another program that is available to shippers is the Postal Service NCOALink (National Change of Address) program. This program is available directly from the Postal Service NCSC or through a certified vendor. The NCOALink database includes change of address information for any business or residential customer who has registered a move with the Postal Service within the past 48 months. The NCOALink program will match a companys database against these changes and provide the updated corrections. NCOALink keeps you on top of address changes BEFORE you mail and can qualify you for some of the Postal Services best postal discounts when used within six months of mailing.
Read the Label
Another Service provided by certified vendors as well as by the Postal Service is RDI (Residential Delivery Indicator). This software allows shippers to run their mailing lists and determine the addresses that are likely to incur a residential surcharge with the private carriers. Residential surcharges by private carriers run from $1.85-$4.40 per package. This includes a residential surcharge of up to $2.20 and an additional surcharge of up to $2.20 if the delivery is located in one of over 23,000 ZIP Codes nationally that qualify for Delivery Area Surcharge (DAS). Many shippers are slimming down their costs simply by moving some residential bound packages to USPS.
Delivery Area Surcharges (DAS) are causing many large companies to be fast on their feet when it comes to cost avoidance. Over 25% of US residents live in an area that the private carriers consider rural, including Malibu, California and Dulles, Virginia. Some shippers have been surprised to discover that even business addresses are subject to the DAS. One large shipper acquired an out of state subsidiary and believed that because their new satellite location was in an industrial area, the DAS would not apply. The company moved their shipping business to USPS when they discovered that 100-150 packages a week going to the new branch office were being surcharged an additional $1.40 each for a business address.
Watch for Hidden Fat
The impact of surcharges on a shippers bottom line has increased exponentially over the past five years. Fuel surcharges are one area where companies are battling the bulge. As we go to press, the private carriers are charging almost four percent for a ground package and over 10% for an air package. For example, a typical five-pound overnight package traveling from New York to Los Angeles is subject to an add-on fuel surcharge of as much as $5.50 by private parcel carriers. There may not be a lot companies can do about fuel surcharges, but the Postal Service does not charge them.
Other Surcharges that Companies Need to Be Aware of Saturday, Sunday and holiday delivery. Saturday delivery is free for all packages with the Postal Service, but fees are $12.50 with private carriers where the service is available. Sunday and holiday deliveries are free with Express Mail from the Postal Service, but these services are not typically offered by the private parcel carriers.
Invalid Account Number If a customer inadvertently misprints his or her account number on a package a penalty may be charged as much as $10.00.
Excessive Tracking Charge Although carriers may not charge for package tracking, a surcharge of up to $3.00 may occur if a customer checks for tracking information more than 20% of the time.
Weekly Service Charges The Postal Service offers Free Package Pickup at www.usps.com. Customers with private carriers will pay a weekly service charge of as much as $17.00 per account number for pickup service. Saturday pickup is typically $12.50.
Exercise Your Options
Recent advances in rate shopping technology allow shippers to seamlessly integrate USPS shipping options into their workflow. New technology is available to allow both quick and easy implementation of USPS shipping solutions using web services so there is no disruption to a shippers integrated workflow environment.
Now You Can Have a Great Figure
If you are interested in more suggestions for slimming down your shipping invoice, we recommend you contact your local USPS Sales Representative and ask them for assistance in doing a cost analysis. In many cases a companys accounting department is responsible for bill payment and does not take the time to review the weekly invoice with the shipping department because they are worried about incurring a late fee.
Not all surcharges are easy to identify on a billing statement. Thats where a USPS sales representative can help. Our representatives have the tools and training to make a detailed comparison between a companys weekly invoice and the shipping manifest to identify hidden costs. In many cases, surcharges are applied after the discounts that customers are given, and they eat away the supposed discount.
The USPS sales representative also has software to compare private carriers products and services to USPS offerings of equal value. This enables shippers to battle the budget bulge by choosing lower-cost shipping options for some of their packages without sacrificing service, convenience or efficiency of operations.
Information about USPS products and services can be found on www.usps.com. Customers can access a list of USPS certified vendors for CASS, NCOALink and RDI by calling the USPS National Customer Support Center at 1-800-238-3150 or by logging on to http://ribbs.usps.gov/files/vendors/. Customers can learn more about CASS by visiting to: http://www.usps.com/ncsc/addressservices/certprograms/cass.htm.
