Small Businesses Cope With Rising Shipping Costs

April 20, 2012 at 2:35 PMScott Frederick

Manage Shipping CostsWith ever-soaring fuel costs and the resulting rise in shipping rates, many businesses may find their profit margins shrinking even as production increases. Many small businesses use e-commerce in the start-up stages, but with the recent rise in shipping rates, owners are looking for ways to reduce shipping costs.  

In-House Strategies

  • Postage meters are an inexpensive way to save time and money for companies that either ship very small light weight products or for which shipping is a smaller portion of their overall product delivery.  A Postage meter will weigh packages accurately, assess precise postage charges and print the shipping label. By taking the guessing out of shipping estimates, both your company and your customer will be satisfied, and shipping overages will be eliminated.

  • Compare services and pricing for each carrier on common shipping requirements. Factor in delivery time as well as shipping costs; customers satisfaction is higher when delivery times are shorter.  Eventually you'll gain a picture of what shipping criteria is best serviced by which service. For example FedEx Express has overnight and 2-day delivery options for small packages, but if your shipment is heavier (more than 10 pounds) and isn't under strict time constraints, it might be more cost-effective to use FedEx Ground service.

Outbound Shipping Solutions for Larger Volumes

  • Consolidate your orders into less-than-truckload (LTL) freight shipments (more than 200 pounds) could save you even more on shipping. If your company has multiple products going to the same customer, it might make sense to consolidate them into one shipment and use an LTL freight carrier like UPS Freight or YRC Freight. You'll pay quite a bit less than parcel or express service and your liability coverage will be much better as well should there be any loss or damage in transit. 

  • Work with a third party logistics (3PL) company. If you don't have the time or resources to figure out which carriers and services would be best for your shipping volumes, a company like PartnerShip can handle the logistics for you and often negotiate a better overall shipping rate for you.

Inbound Shipping Costs

  • Small business owners may lump their inbound freight costs into the cost of goods, but poor inbound freight management can severely impact your gross profit margin.  Be sure every vendor invoice is reviewed for hidden fees. Vendors can inflate "Shipping and Handling" fees to compensate for lower priced items. 

  • Send routing instructions to your vendors specifying which carriers you want them to use when shipping you your products. You can also set up a direct billing account for vendors that ship to you via FedEx or LTL freight carriers through your 3PL partner. With a direct relationship, you'll be able to track shipping volume putting you in a place to negotiate a better overall rate. 

Small businesses must continually adjust their practices to survive and grow in today's economic climate. Adapting to rising shipping costs is something your company can't afford not to do.

NMFC Changes That Could Affect Freight Shipping Rates

April 5, 2012 at 10:32 AMScott Frederick

The National Motor Freight Classification (NMFC) is a standard for thousands of NMFC bookcommodities likely to be shipped by carriers who agree to use this system. Factors such as weight, item type, dimensions, density, and valuation, among others, are used to determine the NMFC. The NMFC identifies what you are shipping and its freight class, which ultimately affects your freight shipping rates.

Frequent freight shippers and users of the NMFC will want to take note of some changes to the classification system – which will be effective April 14, 2012:

ITEM

DESCRIPTION

18260

AUTO BODY PARTS – MOVING TO A FULL SCALE DENSITY ITEM

44515

NEW ITEM FOR FLAMMABLE SOLID, SPONTANEOUSLY COMBUSTIBLE OR DANGEROUS WHEN WET MATERIALS

80580

TO INCLUDE THEATER CHAIRS, REVOLVING CHAIRS AND STOOLS-FULL SCALE DENSITY ITEM.  CANCELLING ITEMS 80640 AND 80700

90500

STONE BLOCKS – ON RACKS (AS A-FRAMES) CLASS 150, SHIPPED FLAT CLASS 55

109700

WILL INCLUDE LAMPS, ARTIFICIAL SUNLIGHT, HEATING OR THERAPEUTIC – FULL SCALE DENSITY ITEM.  CANCELLING 109460

114140

AIR HEATERS – GOING TO A 3 TIER DENSITY

158880

TO INCLUDE ALL SINKS – FULL SCALE DENSITY – CANCELLING ALL LAVATORY SINKS AND SINK ITEMS.


As always, PartnerShip is here to help you determine your commodity's NMFC. Contact us at 800-599-2902 or email select@PartnerShip.com
with any questions. Our freight experts stand ready to help you with your freight shipping or to provide you with LTL freight quotes if needed.