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Distribution Centers Can Save Money on Small Parcel Shipping

Navigating the complex sea of small parcel shipping requires knowledge of vendors andthe options for pricing, visibility, timing, and more.

(Boonton, NJ, December 9, 2010) — Shipping small parcels with FedEx and UPS can be a budget buster, but savvy optimization of small packages could save you hundreds of thousands of dollars a year, says Melissa Priest, in the December issue of industry newsletter, Distribution Center Management.

Priest, the managing director of AFMS of Portland, OR, recommends looking in six areas for savings on small parcel shipping. One of the most important things to keepin mind is that you can renegotiate with carriers at any time.

"A lot of people are under the assumption that once you sign a long-term contract with a carrier, you are locked in and you can't negotiate again until the contract expires," says Michael Erickson also of AFMS. However, that is not true, as most contracts contain an out clause in case your business changes.

For example, if you close a regional warehouse, you may have to start shipping product from other areas, thereby increasing shipments across zones.

Erickson recommends tracking your discount performance. If you are falling off of your discount tier because your shipping volume is decreasing, you may want to change the revenue commitments. In the same way, if you are far exceeding your requirements, you're probably not getting the discounts that you should be.

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For more than 40 years, Distribution Group publications have helped distribution center and warehouse managers increase productivity, cut costs, and meet increasing customer demands. Distribution Group publishes Distribution Center Management newsletter, books and reports, and a free e-newsletter.

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