Like so many other industries, apparel and footwear suppliers and retailers are feeling the effects of the global pandemic. For many, mandatory store closures and in-person shopping restrictions have accelerated the shift from brick-and-mortar sales to online sales.
While predictions vary, it’s estimated that online sales will increase by 50% industry wide [lumping together apparel + footwear] by 2024. That’s incredible growth! It also means that businesses who optimize their shipping stand to gain a substantial advantage over their competition.
We know from our apparel and footwear supply and retail partners that online sales are up, however, in many cases it’s not quite enough to fully offset the loss of in-person sales. To add further complication, as online sales grow, so do shipping expenses. In some instances, we’ve seen shipping expenses balloon due to unnecessary surcharges and fees - not just because of an increase in sales volume.
Getting your product into the hands of your customers is critical to the success of your business, and right now, so is protecting your profit margins by making savvy shipping decisions. Although its often overlooked, shipping is one of the biggest factors in determining a business’ profitability.
Regardless of where you are in terms of online sales volume, now is the time to reassess your shipping operations. You can get instant insight into where your biggest cost savings opportunities are by setting up a free Lojisitic account. Our platform will pinpoint those cost savings opportunities and, in some cases, take the corrective action for you, and in others, it will highlight how operational tweaks can save you some money.
Surcharges and fees are having a real impact on apparel and footwear suppliers and retailers. Let’s take a look at two of the most common surcharges and fees: residential surcharges and address correction fees.
What is a residential surcharge?
A residential surcharge is incurred when a carrier is required to make an “extra effort” to deliver a shipment to a home (including a business operating out of a home) when no public entrance is available.
What should I look out for?
If you’re mainly B2B, you may be getting dinged by residential surcharges if one of your customers operates their business out of their home. If you’re mainly B2C, and depending on your carrier, there are different service levels you can use to get your products to your customers in the most cost-effective way possible.
How can I track residential surcharges?
You can review every line item on each and every invoice you get from your carrier or you can have the Lojistic platform do it automatically. Our platform identifies and quantifies every surcharge, so you can see how often you’re paying for surcharges, the cost per occurrence and the total cost to your business. You might be surprised with how much potential revenue is lost due to unnecessary surcharges and fess within your shipping operations.
How can I mitigate residential surcharges?
UPS and FedEx are constantly adding new residential surcharges and the parameters for when the residential surcharges are applied seem to change all the time. The best way to mitigate residential surcharges is to track each occurrence to see where the costliest residential surcharges occur. With a free Lojistic account, you’ll be able to see how the origin, destination, timing, and service level used for your shipment can affect how much you’re paying in surcharges.
What is an address correction fee?
Address Corrections are extra charges that occur when a carrier has to connect or edit a shipment’s “Ship To” address during the process of transporting the shipment. Anytime UPS or FedEx is unable to deliver a package as addressed by the shipper, OR if the package has an incomplete or inaccurate address, you’ll be charged a fee. The carrier will make an effort to deliver the package and/or find the actual address before it’s returned to you.
What should I lookout for?
See how many times you’re paying address correction fees. Are these shipments recurring, or one-offs? To avoid paying address correction fees, you’ll need to track each occurrence (PS – your Lojistic account will do that automatically). If you see that you’ve been dinged once, be sure to make the correction to avoid paying the same fee over and over.
How can I reduce address correction fees?
Here’s another tip to avoid address correction fees: review the address collector form on your website. If you’re seeing multiple address correction issues, you’ll need to adjust how your form is collecting information. Both UPS and FedEx offer “address validation” integrations, which will help avoid invalid addresses from being submitted.
If a third-party or another entity has access to your shipper account, or they’re shipping on your behalf, you can use Lojistic to track exactly when and where you’re paying address correction fees. This will help you pinpoint the source of the issue. Then, you can take the appropriate action.
Got address correction fees? You’re not alone.
Address correction fees are one the most common fees plaguing apparel and footwear suppliers and retailers, but it’s also one that’s easy to remedy.
We’ve helped apparel and footwear suppliers and retailers significantly reduce their shipping costs.
If you want to see how much you stand to gain, create a free Lojistic account [it takes less than a minute]. There’s no cost. No catch. Just a free analysis of your shipping profile. Get started here.
Are you looking to save big on your shipping?
Here’s another helpful resource: https://www.lojistic.com/blog/top-misconceptions-best-in-class-carrier-agreement