Why Delivery Guarantees, Not Service Levels, Matter Most Author: Rich Harkey
December 16, 2015

When booking a shipment, it makes sense to assume that two-day air would be the best choice to get a package where you need it in two days. And the carriers are probably happy that overnight air would be your first choice! But, depending on what zone you’re shipping to/from, other, cheaper options may be available to get your shipment where you need it, when you need it.

In certain cases, your shipment can ship ground with the same time-in-transit guarantee, for much cheaper. Let’s learn how by reviewing this handy example:

Dave owns and operates an e-commerce business headquartered in Los Angeles, CA. Dave’s company ships a lot of stuff. One of Dave’s regular customers (located in San Francisco, CA) needs a shipment in two days. So by default, Dave’s shipping staff selects next two-day express air as the service level. The shipment arrives on time. Unfortunately for Dave, this shipment cost a fortune. What Dave's shipping staff didn't know is that since San Francisco is in the same zone as Dave, this shipment could have gotten to his customer, on time, for much cheaper via a ground service.

Now obviously this example won’t fit every shipper’s situation, but it definitely illustrates the potential for service level optimization that might be present in a number of shippers around the country. When analyzing your particular shipping situation, be sure to take into consideration:

  • Be sure to understand how delivery guarantees apply to deferred services
  • The most savvy shippers shop dates, not service levels (service level optimization)
  • Use ground services when the time-in-transit guarantee is the same as air services
  • Establish company-wide transportation purchasing controls 

Huge saving opportunities may lie within your transportation operations; you just might have to do some digging to uncover them. Here’s a couple key take-aways to help you actualize the potential savings within:

  • Create detailed routing guides in support of your shipping policies
  • Leverage shipping and or TMS to automate and enforce these policies
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