One of the most costly things when it comes to your parcel spend is hidden fees, or fees that you don't see because they happened after the fact. This is an issue that many companies experience when it comes to the cost of shipping regarding residential shipping costs vs. commercial shipping costs.
If you are shipping business to business, your parcel delivery cost is generally going to be lower than if you are shipping to a residential address. Sometimes, you might think your shipping to a commercial address because you only sell B2B, but then the carrier charges you for residential delivery. This happens when you have people who work from home, such as sales people, repair technicians, and field reps. With the impact of Covid-19, this is happening more now than ever.
When a shipping charge is being calculated, you may come up with an estimate of $10 on the delivery assuming it is a commercial delivery, but it ends up costing you $20 because, in the eyes of the carrier, that is a residential location. Most shippers never notice this cost because the price adjustment happens after the fact. After this happens a few times, you really start to drive up your parcel cost unknowingly.
In addition to higher transportation costs, some surcharges cost more for a residential delivery, such as oversized/large packages. Peak charges as well can be higher for residential deliveries.
Parcel BI offers a lot of helpful and easy to use tools that allows you to see right off the bat where you are being charged more than you expected. You can quickly expose the residential correction or a commercial correction and quantify it instantly, down to specific customers.
Knowing what receivers are residential is crucial to knowing which services to use and estimating delivery costs. Parcel BI gives you the data to update your address information to avoid repeated mistakes.
Customers who struggle with this unexpected residential surcharge can also take advantage of our Contract Edge tool. With Contract Edge, you can negotiate a better rate or discount if you find that your shipping to residential addresses frequently.
If you want to learn more about how Parcel BI can help you expose these charges and keep your parcel cost lower, contact us today! You can also learn more by watching more videos like this in our video library.