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Shipping in the Age of Covid-19
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Posted Wednesday, July 29, 2020 - 8:27pm

2020 has been a year like no other. Every industry has been impacted by Covid-19 in one way or another. Many businesses have suffered, some have closed, and others have innovated and survived. One thing has been certain no matter the industry; the virus has forced us all to adapt and innovate. Supply chains have faced unpredictable disruption both domestically and abroad. Any companies relying on goods manufactured in China quickly realized it was time to diversify, if not long overdue. 

Right before the COVID chaos, the major carriers decided to lower the weight thresholds to apply higher fees at lower weights. Overweight charges did not apply until a package weighed seventy pounds; that dropped to fifty pounds, instantly tacking on a $24 surcharge for millions of packages. To that heap, they added fuel surcharges for the first time this year. 

Even if you used forecasting tools to predict your sales the next year out, chances are no scenario could have prepared your business for complete shutdowns, labor shortages, and border closures. In short, the world has changed as we knew it and survival in the new world will depend on a business’s creativity, flexibility, and finding ways to save money.

On a normal day, businesses waste thousands of dollars on excessive shipping fees with large carriers. Even without all the yearly increases each one imposes (approximately 5% per year), money lost to inaccurately calculated accessorial fees, or unclaimed shipping refunds can amount to very substantial costs for businesses.

How a Freight Audit Can Help

There are many ways to save money on freight and all can be tedious for a business to address on their own. The labor costs and man-hours required to review and audit invoices is something most businesses are not equipped to handle. If outsourced to a freight auditor, many works on consignment, charging businesses a percentage of savings realized. Working with a freight auditing company really is a win-win situation because if they don’t save your business money, it costs you nothing.

Where Can Savings Be Realized?

1. Late Delivery – when UPS or FedEx do not deliver a package on time, the business can request a refund of charges. The carriers do not make it easy to navigate refunds and often benefit because businesses are not equipped to take advantage of it every time it happens. When you do not, you are missing out and leaving thousands of dollars on the table over time. Finding these mistakes requires a careful review of invoices, submitting before the rebate request deadline, and filing the paperwork properly.

2. Usually, the most unanticipated loss of profit is due to employee theft. Often hard to find, it can be substantial over time. Changing employees or implementing new policy protocols may be the solution, but you cannot fix what you do not see and awareness is the key to making positive changes.

3. Overcharges – When you are shipping thousands of packages on a regular basis, paying careful attention to when you are being overcharged is near impossible.  Automated software designed to uncover these costs will amount to lots of found money.

4. Adapting to Rate Changes – Fees regularly increase. Knowing how to navigate them to take advantage of savings, when possible, is essential to keeping your shipping fees down. Identifying inaccurate rates and fixing them will help you lower costs.

5. Negotiating Better Rates – You do not have to wait for your contract term to be up before negotiating new rates. This can be done at any time of the year. The carriers will always be in competition with one another and they know if you are not happy, you can take your business elsewhere.

Shippers are bound to face many challenges this year with the increase in online sales orders, disrupted supply chains, and holidays on the horizon. Should Covid-19 flare up during the holiday season, businesses will be battling layers of additional challenges to meet demand while juggling suppliers and production challenges with the potential of labor shortages. Any help in being more profitable can go a long way in extending the life of a struggling business. The ones that survive and grow post-COVID are the ones that evolve and reinvent themselves with a stronger business model. Uncovering shipping savings is a highly effective way to add to the bottom line that does not depend on external, uncontrollable factors. It’s low hanging fruit just waiting to be picked.

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