We had a new user who was not really managing spend. They are a fast growing company, and they are focusing on other issues besides parcel. New Customers, New Reps, New e-Commerce Engine, Operations.... Good problems for a growing company. But what they had no idea of, was how parcel costs could be eroding all of their hard work and margin. The leaders wear many hats, and the head of e-commerce agreed that parcel spend was worth a look and signed up for Parcel BI.
Company policy was to provide free ground shipping and bill for expedited shipping (Anything above ground). Their objectives are just like 99% of all shippers:
Once they took a look at their data in Parcel BI, eyes were opened. What Parcel BI instantly exposed was a Dimensional Weight or "DIM" issue. The company sells clothing, so boxes are not always heavy, and they were unaware they were getting billed at a higher weight then they were entering. The use UPS as their primary carrier and in June of 2018, UPS started adding an Audit fee to every package in a shipment when a low threshold of corrections was met. So they were adding a dollar to every package.
DIM impacts priority shipments even more, driving up cost exponentially, so when they are pre-paying and billing their customers, they are basing it off the expected cost generated by the carrier shipping software, which is giving them the wrong numbers because the estimate is of actual weight, not billed weight.
Then it got worse...
We did some more digging and saw that they were not even billing some customers at all, forgetting to put the charges in as billable. There were cases we exposed where shipping charges completely wiped out and margin they may have had.
"We have a problem, but now we know we have a problem ... and how to fix it. If only we would have had Parcel BI sooner"
Annual Spend - $900,000 - 8% savings exposed
In today's world where free shipping is expected, you need to know the impact. You need the data. You need Parcel BI.
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