Five golden tips FedEx & UPS don't want you to know
Your package arrives only minutes late, get that refund!
Generally, FedEx and UPS do a good job of guaranteeing their service for on time delivery. They ship a combined total of over 17 million shipments a day, with only 3% arrive late. That seems very good, however those 500,000 late shipments translates into millions of unclaimed dollars!
FedEx and UPS offer a Money-Back Guarantee (MBG) on all service failures. They advertise plenty about their guaranteed service, but surprisingly only a small fraction of late shipments are actually claimed for a refund. Why is that so? Because they leave it up to YOU, the shipper, to claim that refund. The shipper has to go through every single shipment to determine if it was late or not, and then request credit from the carrier. Most companies don’t have the capacity to do this in-house nor the time so they use a professional auditor (such as Betachon) to handle it for them. A freight auditor should only work on a contingency basis, so they only get paid based on what they save you.
Are you getting the right discounts??
Most businesses aren’t aware that their current discounts with their carrier can be a lot better. If you are a small business, for example, and you ship online, you will automatically save 10-12% with FedEx. In addition, if you pay your FedEx bills with an Amex card, you save another 5%! Take a look at the FedEx Promotion Center for further discounts - http://www.fedex.com/us/promotions/index.html. Also, get that Association Discount with UPS if you connect your account number with you association!
For medium and large volume shippers, the process becomes a little bit more complicated. To correctly negotiate with your carrier, you have to be an expert on your shipping volume, type of service, the zones, weight, and several other factors that determine discounts.
When negotiating:
Know exactly what you don’t mind giving up and what to push for.
NEVER give up your money-back guarantee on service failures in exchange for increased discounts. We have proven in many cases that the shipper will save more by claiming refunds on service failures than a few percentage increases in their discounts.
Use your shipping history as extra bargaining power in projecting higher volumes in the future (FedEx and UPS like to see that you are confident that your shipments will increase and therefore will give you a greater discount).
Don’t be afraid to threaten the carrier that you will leave them if a reasonable discount isn’t offered. The carrier most likely wants to retain you as a client and will therefore do their best to accommodate your wish.
Of course, it is always recommended to consult with a professional auditor before taking any steps (such as Betachon).
‘Overnight’ or ‘Next Day Air’ shipments are not always faster than ground shipments!
Take for example, a package leaving Philadelphia and headed to New York City. You might not have realized this but that same package would actually get to NYC overnight whether you shipped it Ground or Next Day Air! You see, UPS and FedEx hope that you their Next Day Air service over the Ground because it is a lot more expensive and therefore they profit more. The Air shipment is usually 3-4 times more expensive than Ground. A 5lb shipment for the above 2 points will cost you $8.10 for a Ground shipment and $33.15 for a Priority Overnight shipment. That’s around a $25 difference in cost for the same service!
Conclusion: Be careful choosing the service type when you want to ship to a nearby destination. The shipment will arrive at the same time by using Ground and will save you more money
Stop insuring your shipments with UPS & FedEx and start using a 3rd party shipping insurance provider!
Another way that UPS & FedEx make their money is by overcharging the customer on insurance costs. While UPS/FedEx charge $0.70 for every $100 of Declared Value, a 3rd party will charge significantly less, usually around $0.30 per $100 of Declared Value. So for a shipment that has a declared value of $5,000, UPS/FedEx will charge you $34.30 (the first $100 of declared value is free) and the 3rd party will charge you only $14.70. So that equals to a 57% discount by using a 3rd party! Multiply this amount by hundreds of packages that you might insure a month and you are greatly decreasing your insurance costs.
Betachon has partnered up with several reliable 3rd party shipping insurance providers so don’t hesitate to ask us who to use!
Avoid those Address Correction fees!
Did you know that whenever you ship a package and the address was incorrect UPS/FedEx will charge you a fee? That’s right, a $10 fee is charged to your account for every single address correction. This even includes a slight misspell in the street name, put “Dr” instead of “St”, and was only one digit off on the zip code! What’s even worse is that if you ship again to that destination, let’s say for a repeat customer, the carrier will continue to charge you for the incorrect address. That means that it is up to you to correct the address to avoid future fees. UPS/FedEx offer several reports in their online system to help manage your shipping details.
To wrap it all up....
Betachon is a privately owned freight audit company that offers consulting and cost reduction services in the shipping industry. Since 2006, Betachon has employed highly experienced professionals and created sophisticated software to produce maximum savings for clients. Betachon is known as a leader in the freight audit industry, with an emphasis in small parcel packages with UPS & FedEx. Contact Betachon for a free trial today!