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Parcel Spend Management

September 27, 2024

The industry’s best shippers treat parcel spend management as a constant priority. They use data to plan, measure, optimize and monitor.

A central repository of standardized data allows for powerful insights into your shipping network. This allows for cost-saving measures like contract negotiation, invoice auditing and more. This also enables intelligent scenario planning for maximum savings potential.


What is Parcel Spend Management?

As e-commerce continues to surge, the landscape of parcel shipping is undergoing remarkable transformations. The rise of innovative logistics solutions has given birth to a sea of new parcel carriers and competitive pricing. Effective parcel spend management is now critical to ensuring both profitability and customer service in this crowded marketplace.


It involves negotiating carrier contracts, auditing shipping invoices, and streamlining operational logistics to reduce overall costs without sacrificing service quality. And it’s important for all shippers to focus on these issues. The smallest oversight can cost your business thousands of dollars.


Fortunately, you can get back those hidden savings by adopting an intelligent parcel shipping system. It will help you reclaim lost refund credits, identify lowest-cost shipping options, audit billing discrepancies, and more.


In addition, a good parcel audit software will also help you eliminate the operational blind spots that can lead to unnecessary spending and missed opportunities for improvement. For example, a Zero Down client stumbled upon an 18% savings opportunity when they analyzed their data with an audit tool. They had overlooked the impact of changing volume tiers on service level optimization.


You can’t manage your shipping network effectively if you don’t have complete, accurate data. A robust transportation audit solution, provides a central repository of standardized data that you can use to make more informed decisions about your shipping network. This approach is called active shipping management and it helps you align your shipping strategies with your financial plans on a continual basis, rather than reacting to problems as they arise. This data-driven decision-making will ensure your company is maximizing efficiency and cost reduction across your entire shipping network.


1. Identify the Most Cost Effective and Time Effective Carrier

Effective parcel spend management requires a multifaceted approach, including negotiating carrier contracts, auditing shipping invoices, and streamlining operational logistics. Using technology to identify and eliminate cost inefficiencies is an important step, but identifying the most cost effective and time efficient carrier also requires insight into your business and shipping processes.


Having access to detailed and accurate data allows for proactive cost-cutting strategies. Whether it is correcting address corrections that are billed weekly or opting for ground instead of air to meet service level goals, the best shippers take advantage of all cost-saving opportunities. These fixes and efficiencies add up quickly, and the visibility into these issues provides a powerful ROI on your parcel spending management solution.


Additionally, a strong parcel spend management strategy includes comparing your rates and services against industry benchmarks and competitors. This ensures you aren’t overpaying, and that you’re competitive in the marketplace.


Managing parcel expenses is an ongoing effort, and sudden industry disruptions like rate hikes or carrier bankruptcy can increase your costs. An effective strategy enables you to act fast without disrupting your network or customer delivery experiences.


A good third-party logistics provider has a deep understanding of the shipping industry and can help you negotiate better rates with carriers, consolidate shipments, and manage your shipping policies. Having this insight into your shipping operations can reduce costly inefficiencies and save you valuable time and money.


Parcel spend management is an essential part of any business, and the ROI can be significant if done well. Using advanced software solutions, powerful data analytics, and expert guidance from experienced shipping auditors is an effective way to reclaim lost savings and optimize your shipping costs.


2. Provides Data to Negotiate Better Rates

There are many ways for brands to improve their shipping costs, such as negotiating better carrier contracts, regularly auditing invoices, and more. However, the key to unlocking these opportunities is having access to a powerful data analytics platform. This makes it easy to proactively align your parcel shipping strategies and financial plans, something that can save significant money and help you achieve long-term supply chain success.


It is important to have the ability to drill down into the details of your network, as well as view it in a big picture. This is possible only with a solution that provides specialized, user-friendly, and highly customizable dashboards that make it easy for teams to understand the data and identify opportunities for improvement. It is also helpful to have a tool that can provide standardized cost structure and delivery schedules, as well as the ability to compare the various types of services offered by each carrier.


In addition to these tools, having the right network optimization strategy allows you to take advantage of the best deals available. By identifying the lowest-cost options, you can negotiate rates and avoid paying unnecessary surcharges and fees. It’s also a good idea to monitor market trends, as it equips you with the insights you need to negotiate advantageous carrier contracts and ensure your terms align with real-time industry conditions.


In a time when customers are increasingly shifting their loyalty to products and prices rather than brand names, it is critical for companies to have control over their supply chains. Taking back financial control requires a comprehensive parcel management system   that combines intelligent lane and carrier selection, cost allocation, activity-based surcharges, and invoice auditing to minimize unexpected surcharges, optimize parcel carrier choice, and capture savings from carrier billing discrepancies.


3. Provides Data to Create More Effective Shipping Flows

During the peak shipping season, companies face increased volumes and costly operational logistics that require attention to avoid unnecessary expenses and delivery challenges. This is where effective parcel spend management can help.


Parcel spend management strategies can range from negotiating carrier contracts to auditing invoices and streamlining operations. A thorough approach is necessary for success, and leveraging advanced data analytics and rapid software solutions proves invaluable. These strategic measures can yield substantial cost savings and supply chain efficiencies, especially during peak shipping seasons.

For example, one of the most common cost-saving opportunities is ensuring that negotiated surcharge discounts don’t expire before their contracted term. By implementing a   regular audit schedule   with an experienced third-party company that specializes in invoice auditing, like P3, businesses can uncover these savings and maximize their rebates and refunds.


Another key aspect of parcel spend management is optimizing the use of a company’s shipping network. This can be achieved through intelligent scenario planning and carrier mix optimization. By analyzing service selection, pricing, delivery times, and capacity, an effective parcel management solution can uncover hidden cost savings by identifying carrier options that provide a balanced cost-to-delivery ratio and the highest level of customer satisfaction.


Managing a high volume of parcel shipping activity can be complex, and many costs and inefficiencies may be overlooked or slip through the cracks. With the right parcel spend management strategy, businesses can save significant money and maintain optimal shipping processes and compliance. To learn more about how to optimize your shipping process, contact a specialized third-party logistics provider with deep expertise in the industry. They can help you negotiate better rates, consolidate shipments, and streamline shipping policies to ensure that your company is maximizing its shipping potential.


4. Better Supply Chain Visibility

In order to effectively manage parcel costs, it’s essential to have full visibility into your network. That includes every aspect of your shipping operations, from negotiating accessorial fees and activity-based surcharges to analyzing and monitoring carrier performance. This information is crucial for making the right decisions about how to optimize your shipping network.


However, this type of comprehensive information can be hard to come by. Carrier portals provide a limited view into the data and are often difficult to navigate. This can make it time consuming to find the information you need, which ultimately slows down your decision-making process. It also makes it difficult to accurately track cost allocations and spot inefficient or costly processes.


The best shippers are constantly analyzing and optimizing their shipping processes to minimize costs and improve delivery times. This is no different during the holidays when the market experiences a surge in online shopping, driving higher than normal parcel volume. Without proper management, these spikes can cause serious supply chain disruptions and increase shipping costs.


Effective parcel spend management involves strategic carrier negotiations, invoice auditing, and streamlining operational logistics. These strategies can uncover hidden costs savings opportunities, allowing businesses to save money and maximize their shipping capabilities. Moreover, by using advanced data analytics and rapid software solutions, shippers can get a full picture of their shipping network. This helps them determine the optimal carriers for each lane and service level, as well as the best discounts to apply for their specific volume. This is important for maximizing discounts and minimizing the impact of sudden industry disruptions like rate increases. By understanding their shipping networks, businesses can be prepared to quickly react to changes without sacrificing quality of service or incurring unnecessary costs.


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UPS Zone Change

March 5, 2025
Understanding UPS Zone Changes and Their Impact on Your Shipping Costs Effective March 24, 2025, UPS is rolling out changes to its shipping zones, which could have significant cost implications for businesses. These updates will impact certain origin and destination ZIP code pairs, potentially increasing shipping costs for affected lanes. What Are Shipping Zones? UPS shipping zones are numerical designations that define the distance a package travels from its origin to its destination. The higher the zone number, the greater the distance, and typically, the higher the shipping cost. Key Changes to UPS Zones in 2025 Some ZIP codes will be reassigned to higher shipping zones, resulting in increased shipping costs for those routes. Businesses relying on specific regional lanes may experience cost hikes as delivery distances are reclassified. UPS has optimized its network, adjusting zones to align with shifting shipping volumes and operational efficiencies. How These Changes Affect Your Business For companies shipping high volumes with UPS, even minor zone adjustments can lead to substantial cost increases over time. A study of previous UPS zone changes found that nearly 70% of adjustments resulted in ZIP codes moving into higher zones, directly impacting shipping expenses. What Can You Do? Review the New Zone Charts: The updated zone charts will be available on the UPS website starting March 24, 2025. Businesses should analyze how their key shipping lanes are affected. Evaluate Your Shipping Contracts: If your primary shipping lanes are impacted, consider renegotiating your UPS agreement to offset potential cost increases. Compare Carrier Rates: If certain routes are significantly affected, exploring FedEx or regional carrier alternatives might provide cost-effective solutions. Optimize Shipping Strategies: Consolidating shipments, adjusting delivery schedules, or leveraging alternative fulfillment locations can help mitigate zone-related cost increases. Final Thoughts UPS zone changes are a reminder of how dynamic shipping costs can be. Businesses should proactively review their shipping data and adjust strategies to minimize the financial impact of these updates. Staying ahead of these changes will help ensure that your company remains competitive in an evolving shipping landscape. For detailed information and access to the revised zone charts, visit the UPS Shipping Costs and Rates page. For more Support in Discovering How This May Impact You, Contact Us.

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Tips for Effective Parcel Spend Management

December 12, 2024
Parcel shipping costs are a significant expense for many businesses, especially in industries like e-commerce, manufacturing, and retail. Managing your parcel spend effectively is crucial for maintaining healthy profit margins and operational efficiency. With carriers frequently adjusting their rates and introducing surcharges, businesses must adopt strategies to minimize costs while ensuring reliable service. Here’s a guide with practical tips for managing your parcel spend effectively. Understand Your Parcel Spend The first step in managing parcel spend is gaining a thorough understanding of your shipping costs and patterns. 1. Analyze Shipping Data Dive into your shipping data to identify trends and areas for improvement. Look for: Average shipping cost per package. Shipping volume by carrier and region. Most common package sizes and weights. 2. Review Carrier Invoices Carrier invoices often include surcharges and fees that can inflate costs. Carefully review invoices for charges like: Fuel surcharges. Address correction fees. Residential delivery fees. Oversize package surcharges. 3. Benchmark Costs Compare your shipping rates with industry averages or similar businesses. This helps you understand whether you’re overpaying or missing out on discounts. Negotiate Carrier Contracts Negotiating carrier contracts is one of the most effective ways to manage parcel spend. 1. Leverage Shipping Volume Carriers are more likely to offer discounts to businesses with higher shipping volumes. Consolidate your shipments where possible to maximize your negotiating power. 2. Ask for Discounts and Incentives Work with carriers to secure: Volume-based discounts. Waivers for specific surcharges. Incentives for reaching shipping targets. 3. Consider Multiple Carriers Relying on a single carrier can limit your flexibility and negotiating leverage. Partnering with multiple carriers allows you to compare rates and services to choose the most cost-effective option for each shipment. 4. Negotiate for Specific Needs If your business frequently ships large or international packages, tailor your contract to minimize associated fees. Carriers may offer customized pricing for your shipping profile. Optimize Your Shipping Strategy A strategic approach to shipping can reduce costs without sacrificing service quality. 1. Optimize Package Sizes and Weights Carriers often charge by dimensional weight (DIM weight), which considers the package’s size and not just its weight. Avoid oversized packaging and use materials that minimize package dimensions. 2. Consolidate Shipments Combine multiple smaller shipments into a single larger shipment whenever possible. This can reduce per-package costs and minimize handling fees. 3. Ship from Multiple Locations If your business has multiple facilities, ship orders from the location closest to the destination. This reduces shipping zones and costs. 4. Utilize Regional Carriers Regional carriers often offer competitive rates and faster delivery times for local shipments. Explore these options for short-distance deliveries. Leverage Technology for Parcel Spend Management Advanced tools and software can provide valuable insights and streamline your shipping operations enabling a smoother parcel spend management. 1. Shipping Management Software Invest in software that automates key tasks such as rate shopping, label creation, and tracking. These tools can help you identify the most cost-effective carrier for each shipment. 2. Parcel Audit Tools Use audit tools such as parcel audit software to monitor carrier invoices for errors. Many businesses are overcharged due to incorrect surcharges or missed service guarantees. These tools help identify discrepancies and recover refunds. 3. Data Analytics Leverage analytics to continuously monitor your parcel spend and identify trends. Real-time insights allow you to make proactive adjustments to your shipping strategy. Control Hidden Costs Hidden costs like surcharges and fees can significantly impact your parcel spend. Taking steps to minimize these expenses is essential. 1. Address Verification Ensure that customer addresses are accurate to avoid address correction fees. Implement address validation tools at the checkout stage. 2. Plan Around Peak Season Surcharges Carriers often impose higher fees during holiday seasons. Plan your shipping strategy to minimize peak season impact, such as encouraging early purchases or offering in-store pickup options. 3. Monitor Delivery Preferences Residential deliveries often incur additional fees. If your customers are willing, offer the option to deliver to commercial addresses or pickup locations to save on costs. Train Your Team A well-trained team can play a crucial role in managing parcel spend effectively. 1. Educate Employees on Shipping Best Practices Ensure staff understand the importance of accurate package dimensions, proper labeling, and selecting the right carriers for each shipment. 2. Create Standard Operating Procedures (SOPs) Establish clear guidelines for packaging, carrier selection, and cost tracking. SOPs help maintain consistency and reduce avoidable mistakes. Partner with Experts Sometimes, managing parcel spend requires outside expertise. Partnering with logistics consultants or third-party firms can yield significant benefits. 1. Contract Negotiation Services Experts can help you negotiate carrier contracts with better terms, leveraging their industry knowledge and relationships with carriers. Read more about when to use them here . 2. Spend Analysis and Optimization Consultants analyze your shipping data to uncover inefficiencies and propose cost-saving strategies tailored to your business. 3. Ongoing Monitoring and Support Logistics firms provide continuous monitoring to ensure carriers adhere to agreed-upon terms and proactively address changes in shipping trends. How Mindful Logistics Can Help Mindful Logistics specializes in helping businesses manage parcel spend effectively. Their comprehensive approach includes: 1. Contract Analysis and Negotiation Mindful Logistics reviews your existing carrier contracts and negotiates on your behalf to secure the best possible rates and terms. 2. Advanced Technology Solutions With access to cutting-edge shipping management tools, Mindful Logistics helps automate processes and reduce costs. 3. Custom Shipping Strategies They analyze your shipping patterns and recommend strategies tailored to your needs, such as consolidating shipments or optimizing package sizes. 4. Parcel Invoice Auditing Mindful Logistics monitors your carrier invoices for errors and helps recover refunds for overcharges or missed guarantees. 5. Proactive Support Their team provides ongoing guidance to adapt to changing shipping trends and ensure long-term savings. Conclusion Effective parcel spend management is essential for controlling costs and maintaining operational efficiency. By analyzing your shipping data, optimizing workflows, and negotiating smarter contracts, you can significantly reduce expenses while ensuring reliable service. Partnering with experts like Mindful Logistics can make the process easier, allowing you to focus on growing your business while they handle the complexities of parcel spend management. Take proactive steps today to gain control over your shipping expenses and set your business up for long-term success.
A woman is holding a cardboard box in her hands.

How to Prepare Your E-Commerce Store for Hikes in Holiday Shipping

November 25, 2024
The holiday season is a critical time for e-commerce businesses. With increased demand comes the potential for shipping delays, higher costs, and logistical challenges. Preparing your store for these seasonal fluctuations is essential to maintaining customer satisfaction and protecting your profit margins. This guide provides actionable strategies to navigate the holiday shipping season with ease. Anticipate Holiday Shipping Challenges The holiday season amplifies common shipping challenges. Awareness of these issues allows you to plan effectively. 1. Carrier Delays Major carriers experience higher volumes during the holidays, leading to potential delays. Understanding their holiday deadlines can help you set realistic expectations for your customers. 2. Increased Shipping Costs Carriers often impose peak season surcharges, adding to your operational expenses. Factoring these costs into your pricing strategy ensures you don’t take an unnecessary financial hit. 3. Inventory Shortages Shipping slowdowns can delay inventory replenishment, leaving you unable to fulfill orders. Stocking up in advance can help prevent this. 4. Customer Expectations Holiday shoppers are often more demanding, expecting fast shipping and accurate delivery. Failing to meet these expectations can harm your reputation. Audit and Optimize Your Shipping Process Before the holiday rush begins, review your shipping workflows to identify inefficiencies and potential bottlenecks. 1. Review Carrier Agreements Evaluate your existing contracts with carriers. Look for opportunities to negotiate better rates or explore new partnerships with carriers offering better terms for high-volume shipping. 2. Leverage Multiple Carriers Relying on a single carrier increases risk during peak seasons. Partnering with multiple carriers provides flexibility to route shipments more effectively during delays or capacity shortages. 3. Audit Fulfillment Operations Assess whether your current fulfillment setup can handle increased demand. Ensure your packing stations are well-organized, and consider hiring seasonal staff if needed. 4. Upgrade Shipping Technology Invest in shipping software that automates label generation, calculates real-time rates, and tracks deliveries. These tools save time and improve accuracy. Communicate Clearly with Customers Transparent communication about shipping policies and timelines is key to managing customer expectations. 1. Set Realistic Delivery Timelines Publish your holiday shipping deadlines prominently on your website. Base these on carrier cutoff dates to avoid last-minute disappointments. 2. Offer Multiple Shipping Options Provide standard, expedited, and same-day delivery options. This gives customers flexibility based on their urgency and budget. 3. Send Delivery Updates Use email or SMS notifications to keep customers informed about their order status. Proactive updates reduce the number of customer inquiries and build trust. Prepare for Increased Costs Shipping cost increases during the holidays are inevitable. Proactively managing these expenses can prevent them from eating into your profits. Read more about 2025 FedEx rate increase here 1. Incorporate Shipping Costs Into Pricing Adjust your product pricing to account for higher shipping expenses or offer free shipping above a minimum order threshold to maintain profitability. 2. Negotiate Peak Season Rates Work with carriers to secure discounts or capped rates for the holiday season, especially if you anticipate a significant shipping volume. 3. Utilize Regional Carriers Regional carriers may offer more competitive pricing and faster delivery times for local shipments. Explore these options to offset surcharges from national carriers. Ensure Your Inventory Is Ready Proper inventory management is crucial to meeting demand and avoiding stockouts during the holiday season. 1. Forecast Demand Accurately Use historical sales data to predict which products will be in high demand. Order inventory early to avoid delays from suppliers. 2. Organize Your Warehouse Streamline your warehouse layout to make it easy to locate and pack popular items. This can speed up the fulfillment process during peak times. 3. Implement Safety Stock Levels Maintain a buffer stock for your best-selling products to account for unexpected demand spikes. Streamline Returns Management Returns often increase during the holiday season. Preparing your store for this can enhance customer satisfaction and improve operational efficiency. 1. Simplify the Return Process Make it easy for customers to initiate returns by providing prepaid labels or clear return instructions on your website. 2. Offer Extended Return Windows Holiday shoppers often buy gifts early. Providing extended return periods accommodates this and encourages more purchases. 3. Inspect and Restock Quickly Establish a system for inspecting returned items and restocking them promptly to maximize inventory availability. Leverage Holiday Shipping Incentives Strategic shipping promotions can drive sales and increase customer loyalty during the holiday season. 1. Offer Free Shipping Free shipping is a top incentive for holiday shoppers. Use it as a marketing tool for orders that meet a minimum purchase threshold. 2. Promote Fast Shipping Highlight expedited shipping options for last-minute shoppers. Include clear messaging about cutoff dates to create urgency. 3. Provide Gift Wrapping Services Adding gift wrapping as an optional service can differentiate your store and add value for customers during the holidays. How Mindful Logistics Can Help Managing holiday shipping requires expertise and a proactive approach. Partnering with a logistics consultant like Mindful Logistics can ease the burden and ensure your operations run smoothly. 1. Carrier Contract Negotiations Mindful Logistics can help you secure favorable terms with carriers, minimizing the impact of peak season surcharges. 2. Shipping Process Optimization Their experts analyze your workflows and recommend changes to improve efficiency, reduce costs, and speed up fulfillment. 3. Advanced Shipping Software Integration Mindful Logistics offers tools to automate shipping tasks, ensuring you stay on top of holiday demand without overwhelming your team. 4. Real-Time Problem Solving When shipping delays or inventory shortages arise, Mindful Logistics provides timely solutions to keep your operations on track. Conclusion The holiday shipping season presents both challenges and opportunities for e-commerce businesses. By anticipating issues, optimizing processes, and proactively managing costs, you can turn the holiday rush into a period of growth and customer satisfaction. Partnering with experts like Mindful Logistics can make a significant difference, ensuring your store is prepared for the busiest time of the year. Take the steps now to safeguard your success and deliver an exceptional holiday shopping experience to your customers.
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