A Few Easy Ways to Discount UPS and FedEx Shipping Costs Author: Rich Harkey
June 17, 2016

Most shippers are aware that it is possible to discount shipping costs. But, what most might not know is that there is a multitude of ways to do so. The savviest shippers are aware of contract optimization, the practice of negotiating better shipping carrier rates. Chances are they also know about implementing a parcel and freight audit, the process of seeking out credits and ensuring invoice accuracy. Beyond these two great shipping cost saving techniques lie many other ways to reduce your shipping costs.

So, let’s go over a few ways to help you reduce shipping costs. We’ll retouch on carrier contract negotiations and parcel auditing, and introduce a few potentially new (to you) techniques to reduce shipping costs.

Parcel and/or Freight Auditing

One of the most typical ways to reduce shipping costs is through a parcel or freight audit. A parcel or freight audit is the process by which your shipping invoices are checked for accuracy, and any inaccuracies are credited and refunded back to you. Some typical recovery points are invalid DIM weight, invalid residential charges, and late shipments. In addition to audit services, companies like Lojistic also provide pay services, to help streamline the audit/pay process. This can also help clear up some of the AP manpower on the backend (minimal) to support a parcel audit. All in all, a parcel or freight audit is the safest, easiest, and quickest way to start saving money and reduce shipping costs.

Carrier Contract Negotiation

The second most typical way to reduce shipping costs is to try and negotiate better carrier rate discounts on your carrier shipping contract. This is much easier said than done, though. As a shipper, you are pitted against a team of local, district, and regional pricing teams looking to maximize their profits. Your carrier rep is your messenger to the pricing departments, so you arming your rep with the tools they need is of the utmost importance. Lojistic speaks the carrier’s language, and can make sure your rep has what they need to make the carrier pricing teams make big moves to improve your rates. Without a doubt, a carrier contract negotiation can make the biggest impact on your shipping rates and help reduce transportation costs.

Parcel Shipping Insurance

If you are actively insuring your parcel shipments, a 3rd party parcel insurance provider (like Lojistic) can help you save a bunch of money on nearly every shipment. In certain circumstances, the savings can be between 50% and 92%! The major carrier insurance rates have increased more than 33% over the past five years, so there is no better time than now to shop around and see if there are any other 3rd party insurance providers that can help you reduce these costs. Check out our handy parcel insurance calculator to estimate your potential parcel insurance savings.

Shipping Software

 Implementing a transportation management software (TMS) is a great way to ensure that all of your shipments are going out in accordance with your routing guide, and at the best possible service level. Most shippers are unaware that in certain circumstances, shipments sent via an express service could have arrived in the same time on the ground or by using a deferred service level. A TMS like Intelliship is able to automatically pick the fastest, cheapest shipping option to guarantee your shipment to arrive by your necessary due date. A good TMS system will also auto-validate the shipping addresses for your outgoing shipments, preventing address correction charges.

In addition to these functionalities, make sure your TMS has advanced tracking & reporting capabilities. You’ll gain a concentric view over your transportation operations, allowing you to ensure you’re running as lean as possible. The initial setup of a TMS can be pricey and take some time to implement, but unlike most, Intelliship can be set up almost instantly… and it’s free.

Purchase Discounted Shipping Rates

Finding a 3PL, other shipper, or transportation consultancy that has access to killer rates (like Lojistic) is a super-easy way to save money on your freight shipments. These companies normally represent a large collective shipping spend, and will sell their rates to other shippers who otherwise wouldn’t be able so secure such massive discounts. The Lojistic wholesale rate marketplace is full of super-competitive rates that any shipper can shop and ship with. And you’re free to keep 100% of the savings! This is, without a doubt, one of the easiest ways to reduce transportation costs.

No matter what services you choose to reduce transportation costs, be sure to first understand your transportation operations, because not every cost saving solution will be applicable to your situation. Want to learn more about how Lojistic can help you with any/all of the above? We’re here to talk!

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