To reduce shipping costs, you need to be mindful of address correction charges. These bill-backs can quickly add tens or even hundreds of thousands of dollars annually to your freight cost. Major carriers like UPS or FedEx will impose address correction charges for incorrectly-formatted or improperly addressed mail and packages. This covers the shipping company for incorrect or late deliveries. They often have to find the correct zip code, or correct the street number or name, or even re-format the shipping address to meet the shipping company and/or international postal standards.
UPS address correction charges run $11.00 per address per package. Last year, the address correction charge rose $1.00 for UPS Ground Services and remained the same for UPS Air Services. To save on shipping costs, you need to realize that most of the address errors come from the consumer--entering wrong street numbers or using the wrong abbreviation--St. instead of Rd., or even the wrong zip code. Admittedly, the UPS WorldShip address verification system could do a better job at catching some of these errors and helping to reduce your freight cost.
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FedEx notes that to save on shipping costs, one should pay particular attention to the recipient's address on an airbill, air waybill, and/or shipping label. If it's incomplete or incorrect, the fee is $11 per package per address. Over time, this can significantly impact your freight cost.
To save on shipping costs, and reduce your overall freight cost, one should look into address verification software. With this type of software the addresses are standardized by cross-referencing the U.S. Postal Address Database. The software will then perform several additional checks to ensure the address on file is correct.
Author
Rich Harkey
Rich Harkey
Senior Strategy Manager
Rich Harkey is a results-driven professional with extensive experience in the logistics and supply chain industry.
As the Senior Strategy Manager at Lojistic, Rich leverages over three decades of expertise to help businesses improve their shipping strategies and reduce costs. With a deep understanding of the requirements of shippers and the operational intricacies of carriers, he excels in everything from optimizing business rules and managing carrier invoices to negotiating carrier contracts.
Rich's comprehensive knowledge of the logistics industry, combined with his strategic insights and passion for data analysis, has enabled thousands of companies to gain visibility into their shipping expenses, driving impactful results.