If you are an eCommerce retailer or operate a brick and
mortar store there’s something you need to know. It could save you a lot on
shipping as well as open up new markets for your business.
You do want to
save on shipping and get access to new markets, right?
The thing to know is that under certain circumstances the
two best known parcel shipping companies – UPS and FedEx - are not the only
shipping options you have. Unfortunately, a lot of companies make the incorrect
and costly assumption there are no other alternatives.
The bad news is for smaller, lightweight shipments this is
still the case. Along with the U.S. Postal Service, Fed Ex and UPS still
dominate this market.
The good news is the bigger your shipment, the more shipping
mode options you have. And, the potential savings grows exponentially as well.
So what are the circumstances that open up these new
options?
With shipments that exceed a certain size or have certain
characteristics an LTL (Less Than Truckload) carrier is a cheaper, faster, and
frankly better option to handle the delivery.
First, a quick explanation in case you did not know – LTL
carriers specialize in combining multiple small shipments from different customers
to fill up larger trucks. The benefit is that by combining their volume, various
customers save by sharing the expense of using a large truck to make the
deliveries.
A long standing rule of thumb has been that shipments greater
than about 200 lbs. end up being more
expensive to ship with a small parcel carrier (UPS or FedEx) when compared to
an LTL carrier.
This means if you have a single, or multiple items
shipping to the same location that exceed 200 lbs. don’t use a small parcel
carrier, call an LTL carrier.
To complicate things further - enter dimensional pricing
by UPS and FedEx. This new method of rating some shipments introduced in early
2015 has changed the equation and made many lighter weight shipments less
expensive with LTL.
An important note: even if you already use LTL you should
re-evaluate your established break-even rules for deciding between the two
modes. Chances are LTL will be a better option for a significant new percentage
of your shipments you would have assumed should just go small parcel in the
past.
Along these same lines, LTL is a great option if you are
selling a product too big or awkward for the small parcel carriers. There are
plenty of successful online retailers selling products like couches and beds using
LTL carriers to make deliveries to customers, so chances are your products can
also economically ship LTL.
A common misconception holding some companies back from
exploring the LTL option is the concern that only the small parcel guys can
handle special delivery requirements like inside or residential delivery. There
are potentially additional fees for these types of extra services with LTL
carriers but they are simply things to make part of your calculation when
booking the shipment.
If you are a brick and mortar retailer, concern over
shipping large and bulky items may have prevented you from exploring eCommerce
as an option for growing your sales. Selling online and containing shipping
costs open up new markets, so don’t let concerns over shipping hold back the
growth of your company.
The principle applies to inbound shipping as well. For
example, look for opportunities to have your suppliers place those 20 boxes on
a pallet for LTL instead of shipping them as 20 different UPS Ground shipments.
You’ll not only save on shipping, but cut down on damages and missing boxes
too.
Using LTL can open up the option for you to order more
product in bulk as well. Doing this can reduce your per unit costs – both in
terms of what you pay for the product and also the per unit shipping cost.
There are some differences in preparing a shipment to go
LTL compared to shipping it small parcel.
LTL shipments are generally best packaged on a pallet
(although this is not always a requirement). It’s simply a matter of placing
the products on a pallet and shrink wrapping them securely to the pallet. This
is compared to small parcel shipments which require a small label on each piece
you are shipping.
For LTL, a single “pallet flag” should be attached to the
pallet. This flag is simply a large label or sheet of paper that describes the
product, as well as the delivery address.
The LTL carrier will also provide a “pro number” label.
This sticker has a unique number to identify the shipment in the carrier’s
system for billing and tracking purposes.
Also accompanying an LTL shipment is a Bill of Lading.
The “BOL” is paperwork that stays with the shipment while it’s in transit and is
the document the person receiving the delivery will sign as proof the delivery
has been made.
The bottom line is when it’s done right, LTL is a cost
effective alternative to UPS and FedEx.
If you are not sure how to find an LTL carrier, or are looking
for software to help determine the best method of sending a shipment then check
out www.freightcenter.com for more
information.
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