Carrier Selection: A Detailed Look at Determining the Right Carrier
Selecting the right carrier is essential for any business shipping parcel packages. Utilizing the correct carrier for your shipping needs can improve the bottom line and increase customer satisfaction. However, determining the carriers to use can be more challenging than it may seem.
Carriers use several factors when determining costs; they include weight, dimensions, and shipping destination.
Package weight and dimension are the most critical factors when choosing a shipping carrier. Some carriers restrict package size and weight, while others have additional fees for oversized or overweight packages. Carriers like UPS and FedEx will use a dimensional weight factor to determine package weight. The calculation is Length x Width x Height divided by the dimensional factor. The greater of the package’s actual weight and the dimensional weight of the package is used to determine the billable weight. If you are looking to rate shop between multiple carriers, knowing the dimensional weight before shipping is critical to selecting the appropriate carrier.
Carrier zones are geographic areas that shipping carriers use to calculate shipping rates. Shipping rates typically increase as the distance between the shipping origin and the destination increases. Companies should determine the carrier zone of their shipping destination to get an accurate estimate of shipping costs when trying to optimize their shipping carriers. Carriers like UPS and FedEx will add additional “Delivery Area Surcharge” fees for rural deliveries.
On the surface, comparing carrier rates using rates and zones looks pretty simple. However, carriers have many additional charges not included in the base rates. The charges vary by carrier and service but often include Fuel, Delivery Area, Residential, oversized, and more. When comparing costs, be sure that you have any additional costs that are over and above the base rates are included.
Other options to consider when selecting Carriers:
While cost is significant when optimizing your carrier network, it is not the only factor that should be accounted for.
– Transit times – the most significant factor outside of costs is often transit times. Customers have expectations of when they want to receive their orders, and often, cost and transit times have an adverse correlation.
This makes it challenging to reduce costs while decreasing transit times.
– Reliability – the carrier’s ability to deliver products on time can be crucial for many companies. This is especially true if customers rely on your products for business or personal needs.
– Technology and Reporting – Having visibility into your shipments and near real-time data can help decision-making quickly. If reporting and visibility are essential to your business, be sure you are working with a carrier that can provide the information you need.
Making all of this work:
In the business of fulfilling orders, time is money. Being able to do rate shopping with everything described above can seem lengthy, especially if you do this for every shipment. Have no fear; there are ways to automate much of this. Using multi-carrier manifesting software can help rate shop in real time to allow associates on the warehouse floor to quickly ship orders without making decisions. Implementing a weight scale and dimensional scanner at the time of packaging manifesting can help capture each package’s actual weights and dimensions. Accurate information will allow you to ship the correct method every time accurately.
Optimizing the perfect carrier mix and services can seem like a lengthy process. However, starting simple and growing into more complex rate shopping can still provide savings on low-hanging fruit. Looking at your carrier mix, services, and packages at least once a year is essential. Rates, services, and new carriers are changing all the time. Doing so will help save money and improve customer satisfaction to help you sell more products.