Carrier Fuel Surcharge Opportunity for the Holidays

With all the negative economic issues affecting retail buyers today, many companies are questioning how holiday sales will be this year. We feel that despite an overall retail sales decrease, Internet sales will be higher for 2008. We also feel that these sales will be spread over many more retailers than in years past. For many it could be tough. Many retailers who did not sell on the Internet in past years are now turning to Internet retailing as a way to increase overall retail sales. Many of these are huge, well funded companies. The reason for all of the interest is mainly due to energy costs. Experts feel that more buyers will be shopping from their PCs rather than driving to stores in 2008. With many more established Internet retailers creating a much more competitive market this holiday season, everyone will need to be more innovative to survive.

Keeping this in mind, we have noticed in the last week that the major carriers have announced a decrease of their current fuel surcharges, starting October 6, 2008. This decrease in cost could be an opportunity for you to increase your company's sales right now. With the uncertainty in the energy market, it's possible these prices may not be around very long. To see examples of the decreases, you can visit the UPS and FedEx Fuel Surcharges links on this Blog page.

Now you ask, "How can I benefit from this carrier fuel surcharge decrease?" That is easy. You need to focus on offering deals to your visitors to purchase heavily from your web site during the month of October.

Offering a lower flat-rate (or even free) shipping for volume purchases is a great special to take advantage of this opportunity. If you are a CPS user, now is the time to use your Flat Rate Report to help you determine the right strategy for flat rate or free shipping. We feel this is a good time to get a jump on the holiday market before the fuel surcharges increase again. Let's face it - the odds are in favor of them going up again. And if that's wrong, you still got a jump on 2008 holiday sales.

New International Shipping Document Requirements Mandatory for October 1, 2008

Back in June, we wrote about an upcoming change effective July 2, 2008, that the Census Bureau would require mandatory filing of export information through the Automated Export System (AES) or AESDirect. This is for all shipments where a Shipper’s Export Declaration (SED) is required. Beginning October 1, 2008, the "adjustment period" is over and there are fines and potentially prison time if these filings are not filed accurately and on time. The fines and prison time are significant - up to $10,000 and 5 years per shipment.

Some history-

The changes are in the Foreign Trade Regulations (FTR) that affect the Shipper’s Export Declaration (SED) (now known as Electronic Export Information - EEI) procedures. The new Regulations became effective July 2, 2008. By October 1, 2008, if EEI is required for a U.S. export, the EEI must be electronically filed to the Automated Export System (AES) by the U.S. Principal Party in Interest (USPPI) (normally this is the exporter) or their designated agent.

There are more rules about when EEI is required than can be covered well here. UPS, FedEx and the USPS want different information about EEI, some of the exemption numbers have changed, and there are many other requirements. Be sure to contact your carrier(s) so they can advise you about how to comply with this new requirement. The USPPI can file for themselves directly with AESDirect. You may also find that the carriers offer other filing method options.

You will find additional information about this at the U.S. Census Bureau web site.

Handling Carrier Strikes and Other Service Disruptions

Recently, the 12,000 member Teamsters Local 705 in metro Chicago authorized a strike against one of the major carriers. Although an agreement was reached just hours before deliveries stopped, it reminded me that there is another important aspect of a multiple carrier shipping system - carrier choice. Sure, carrier choice in your shipping system gives you the best price for each package and more negotiating power with the carriers at contract time. But "best pricing" is in second place compared to making sure your packages get shipped.

Labor problems are not the only reason a carrier may stop picking up your packages. What about weather like hurricanes and winter storms? If a carrier stops picking up your packages, whatever the reason, you need to do something immediately. If packages aren't flowing out, then money is not flowing in. Even a one day interruption is disruptive, and you never know when it will be over until it's over (with apologies to Yogi!). If you miss just one shipping day, you could be facing expensive service upgrades when you ship the next day to you meet promised delivery times.

When an interruption becomes extended, history tells us other carriers may not even accept new customers to prevent overloading and poor service to their current customers. Even if you have selected a "primary" carrier, consider giving another carrier some packages each week so you have an alternate carrier available if the worst happens. As an example, with the CPS shipping software, you simply change the three carrier initials and you are immediately shipping with your alternate carrier, printing carrier accepted labels and sending them accurate data for billing and tracking.

Strikes, weather, etc. are "worst case" situations, and a shipping system with carrier choice can do more than just save money, it could save your business.