Keeping Up with Carrier Fuel Surcharges

Have we found something to join death and taxes as a "sure thing" - the carriers' fuel surcharge increases? The surcharge amounts for August have been announced. They are over 10% for ground and almost 35% for air. And for some carriers these amounts are even greater. YIKES!!

I see fuel surcharges see-sawing up and down, not just as a way for carriers to take money from businesses, but more a way to let carriers be able to offer their services in trying economic times without having to change their rate tables constantly. Recently, the surcharges have gone up and up, but so have oil prices, in fact faster than any US or global company ever expected (except maybe the traders - that's another story). Eventually, I expect parcel carriers to include these operating costs directly in their standard rates with their annual price increase, lowering the fuel surcharges. Or even better, the fuel surcharges fall due to decreased oil costs or increased efficiencies in the carriers' delivery system. All businesses adjust pricing over the long haul in a free market system. As long as the economy changes, nearly all services will increase in price. Just a fact of life we all have to deal with. Now, how to best handle this?

Last time, I talked about "Using Your Shipping System to Get the Lowest Shipping Rates". Keeping your shipping system up to date with the fuel surcharge is absolutely necessary for you to have accurate rate comparisons among the carriers for your packages. Accurate "best rate" shipping (the more automatic the better!) is a primary line of defense against these increased shipping costs. I'm sure you agree that, today, you need every advantage you can get.

Larger shippers might consider using a fulfillment service. The more you can move in bulk that can be delivered from local centers, the more you can save. This can also be seen in services where carriers use USPS for final delivery or in consolidated clearance services for international shipments. In all of these cases the key is in what you have to ship and the best logistics channel to move your goods to market - all balanced against doing it for the least cost. All of these factors mean that the time has ended for freight charges to just be passed to the consumer without any concern about the effects.

Today, this must be done while fulfilling the end customer’s normally high expectations for time of delivery, condition of the end product at the time of delivery, but not losing the sale due to shipping costs and order abandonment.

It's a tall order, but there are professionals in shipping software and fulfillment centers to help.

Using Your Shipping System to Get the Lowest Shipping Rates

You've negotiated a great rate with your package carriers. You also want to use the USPS since they have new commercial rates and great rates for lighter packages shipped to residences. You know you have good rates, but what's the next step so you can use all of these carriers and make sure you pay the best price for every package you ship? There, as they say, is the rub.

It's easy in concept. For each package you ship, check each carrier's rate, and then choose the least expensive. The problem is making that work efficiently. Looking up rates in two or three different systems can add 5 minutes processing time to every package. Also, to shop for the best carrier and service in your order system, you need the exact shipping weight of the items in the order, including the packaging. In a number of order systems, this final shipping weight can be difficult to obtain.

There is one more wrinkle. If you use a carrier provided shipping system, it may only give published rates, not the rates you worked so hard to negotiate. This is when 3rd party shipping systems can really earn their keep. Here is how it works in our CPS™ shipping software.

With CPS, you can use your company's UPS and FedEx contract rates, plus CPS supports the new USPS commercial rates. This means you can quickly see at a glance, on just one screen, a rate comparison and select the best from just one list.

And there's more. CPS also lets you set up automatic rate comparison codes that we call RateBots™. For example, set up a RateBot to get the best price for ground delivery service, and then use that RateBot for your ground packages. CPS even optionally determines if the address is commercial and residential, so the entire "best rate" process is hands-off and automatic. You can set up as many RateBots as you need, such as one for ground service, another for best next day service, etc.

Look for these features like these in your shipping system and really start putting those competitive rate bids to work for you.

SmartWay Partner Networking Opportunity

For those interested in learning more about the SmartWay Partnership there will be a meeting in Toronto on September 30th through October 2nd. For details of this meeting click here…

Saving Can Be as Simple as Becoming a SmartWay Transport Partnership Shipper

Want to know another great way to save money, help improve our environment and decrease our dependence on foreign oil? Consider committing to using SmartWay Transport Carriers and becoming a SmartWay Partnership Shipper. SmartWay Partners receive many great benefits for their efforts. They also quickly realize that going green can not only help our planet but it also goes straight to the bottom line with significant green savings. For more on becoming a partner click here...

You can also visit http://www.epa.gov/smartway/newsroom/index.htm for the latest SmartWay news, events and e-updates.

WHOOPS! Latest Microsoft XP Security Update Stopped Our Internet Access

After applying the latest Windows XP updates from Tuesday, 7/8/08, we've had reports of problems with connecting to the Internet. In our offices we had to make firewall setting changes so that our Internet and email would work again. We use ZoneAlarm and had to change the Firewall setting for the Internet Zone Security from High to Medium to be able to communicate again with the outside world.

Of course, our shipping system could not be used until its Internet connection was restored. Not a good thing!

Watch out for this issue with your security software when you apply this month's Windows XP updates.

If you use ZoneAlarm and want to know more click here…

Reduce Shipping Costs with Free Shipping Boxes

Shipping cost is more than just how much the carrier charges to deliver a package. For example, let's look at the package itself.

If you use the carriers' air services, each carrier provides boxes and envelopes at no cost to you. Here are some examples.

The USPS has an Express Mail 12" x 15.5" x 2" box, the Tyvek envelope, the 6" x 25" tube mailer and the 6" x 38" tube mailer, all that you put postage on based on the weight. They also provide the Express Mail Flat Rate Envelope and a Legal Size Flat rate envelope which each needs 1 postage amount regardless of what you have in the envelope. For every one of these, the packaging is free. You pay only the postage.

For their air delivery services, UPS and FedEx provide envelopes plus shipping boxes in 3 sizes. They are also free. It is important to note that dimensional weight rates apply, so use the box that just fits. How can dimensional weights affect your shipping costs? Even if what you send weighs less then a pound, if the box dimensions rate the package as 3 pounds, you pay the 3 pound rate as a mininum.

For USPS Priority Mail, there are a variety of envelopes and boxes. A number include flat rate shipping as an added benefit. One rule is the box needs to keep its original form, not packed until it's bulging. For instance, a Large Flat Rate Priority box needs $12.95 in postage. If 7 pounds of merchandise fits, you’ll save up to $6 dollars versus regular Priority mail rates. More information about USPS supplied packaging materials is at http://shop.usps.com/.

Will these boxes be right for every package? Maybe not, but whenever you can use these boxes, it's money you keep. Between the actual cost of the box and using flat rate services, smart use of these may save you up to $20 dollars per package!

International Shipping Tips for UPS, FedEx and USPS (Part 4)

Next we will cover some of the commonly used forms for international shipping. The samples below are customs forms as printed by our CPS shipping software. These are typical but can vary slightly in appearance from application to application. They are according to the current, approved layouts, which is always subject to change. The data about the goods is included in some way on each form. The commercial invoice form is the same for all carriers. The different USPS forms are used according to the value of the goods as well as other criteria. The USPS 2976A form is a single page but the 2976 is six pages and even has its own required envelope, the 2976E.

As you see, there is a lot of data in the forms, and a mistake with any part can stop your packages cold at customs. The forms for UPS and FedEx are identical. Click on the links below to view the sample forms:

Sample UPS Shipment Commercial Invoice
Sample UPS Shipment Certificate of Origin
Sample USPS Shipment Form 2976
Sample USPS Shipment Form 2976A
Sample USPS Shipment Commercial Invoice

Did you know that you could need a license to export a pencil to Canada? No kidding! Need more information about export licensing and when it's needed?

You can learn more from the actual regulators. Where? For those who think that it can't be hot enough, in Orlando on August 5 & 6, the US Department of Commerce will present a seminar titled "Complying with U.S. Export Controls" which will cost $350. This seminar will cover the Export Administration Regulations (EAR), U.S. sanctions programs, and the Foreign Trade Statistics Regulations (FTSR). You'll learn to classify your commodities, services and technologies; understand whether a license is required; apply for a license; and you'll learn about the documentation that you will need to keep to prove your due diligence. Click here to register or see the attached document. You can also visit:

U.S. Trade Information Center (General export information)http://www.export.gov/exportbasics/exp_001602.asp

U.S. Department of Commerce (for a Basic Guide to Exporting)http://www.unzco.com/basicguide/index.html

U.S. Department of Agriculture (For Food Products)
http://www.usda.gov/wps/portal/!ut/p/_s.7_0_A/7_0_1OB?navid=

US Customs (More general information)
http://www.customs.ustreas.gov/xp/cgov/home.xml

International Monetary Fund - SDRs per Currency unit and Currency units per SDR (Dollar conversion rates)
http://www.imf.org/external/np/fin/data/rms_five.aspx

This is it for this series on international shipping. But that is not all. We will continue to publish more on related subjects over the up coming weeks, so subscribe to our feed now to receive this information automatically or visit us again soon.