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How To Save Money on Carrier Management Services Across Your Enterprise

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Postal Advocate manages the carrier management spends with organizations that could have hundreds to thousands of locations that need to be managed to control their carrier cost. Most of the spend never touches a shipping center, is not a core shipping function (including documents, samples, computers, labs, etc.), and will be processed by end users with little experience. This creates unique challenges and opportunities for savings that often get missed.

At a corporate level, many organizations will use a third-party company to audit their carrier bills, looking for late shipments or items that do not adhere to their contract. Some entities may also use a service to help negotiate their rates. Where we see the biggest gap is the way the spend is managed inside the organization that can have the largest impact on costs. This webinar focused on the top things you can do to create better controls and optimize the spend.

Items We Covered:
1.) Administrative Challenges
2.) Account Management
3.) User Management
4.) Rights Management
5.) Local Questions/Issues Resolution
6.) Reporting
7.) Technology Options
8.) Best Practices and Tips

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How To Save Money on Carrier Management Services Across Your Enterprise

  1. 1. Adam Lewenberg - Background and Experience • President of Postal Advocate Inc. – The only mail audit and recovery firm in the US and Canada – Manage a portfolio of over 160,000 pieces of mailing and shipping equipment for the largest US companies. – Speak and teach nationally on mail savings and industry trends. • Former Industry Co Chair- Boston Postal Customer Council/Mail Systems Management Association member. CMDSS and MDC Certifications. • Featured Writer for Mailing Systems Technology Magazine. • Worked for one of the largest mailing vendors for over 17 years – Director of national sales for presort, tabletop inserters, addressing hardware/software and green offerings. – Was one of the top 5 account managers nationally working with some of the nation’s largest accounts. Not affiliated with any mailing vendor - Unbiased advice. June 17, 2020 2
  2. 2. What We’ll Cover: 1. Administrative Challenges 2. Account Management 3. User Management 4. Rights Management 5. Local Questions/Issues Resolution 6. Reporting 7. Technology Options 8. Best Practices and Tips June 17, 2020 3
  3. 3. Enterprise Shipping Challenges June 17, 2020 4 Little visibility or controls to how people are shipping and what services they use Auditing Carrier Invoices is infrequent and not detailed Users are added to these free systems but infrequently purged to remove inactive employees. This creates a risk of theft. Shipments are typically documents/ad hoc requests that are not going through an order entry system Limited envelopes/ boxes available to make sure the item is going the most optimal method Limited Support to Help Users Transportation Dept only review core hubs – What about the other locations? Educating Locations to Utilize Services to Save Cost - #WFH Free carrier systems are the most common which gear to the most expensive air shipment services Users Not Trained as Shippers
  4. 4. Administrative Challenges We can divide most organizations into three themes of oversight: Centralized, Decentralized or Hybrid • Centralized – A carrier provided (UPS CampusShip® or Fedex.com) or multi-carrier acquired system is in place to manage the users and shipping transactions. This will have an administrator who controls the users and locations. • Decentralized – Locations will sign up their own accounts on the carrier websites and manage remotely • Hybrid – A centralized system is in place at a headquarters or a group of locations, but many are not included and will manage their spends in a decentralized fashion. June 17, 2020 5
  5. 5. Carrier Savings Focus Most Organizations • Contract Negotiations • Freight Audit – Looking for late shipments and items not billed at the proper carrier rates Proposed • Continue with Contract Negotiations and Freight Audit • Find additional savings in your existing spends. – Identify the key issues. – Create change management – Educate and reinforce – Continue to monitor and measure June 17, 2020 6
  6. 6. Account Management Organizations manage their carriers by either: 1) Having one account and different cost centers by location or 2) Having separate accounts by location rolling up to one main carrier number. This can get out of hand quickly. For example: We have a client, that prior to us working with them, had over 5000 carrier accounts to manage 2000 locations. June 17, 2020 7 1) Central Controls - Adding and removing carrier accounts. Try to consolidate them where possible and have one party control the account number requests to the carriers
  7. 7. User Management • Adding and removing users may seem trivial, but it is the hardest part of managing the spend across the organization. New users need to be added as they come onboard and removed when they leave. Many organizations will seldom, if ever, purge non active employees who still have the ability ship until they are deleted from the systems. June 17, 2020 8 1) Single Sign-On (SSO) – Connected in real-time to your Corporate address book. Employees will be automatically removed/added. 2) If you are using a carrier provided system, set up a process to export your active users from your system weekly or monthly and do a comparison
  8. 8. Rights Management • With todays shipping tools you can control what the users see and do on the systems. Many organizations will not optimize this functionality and it can add to significant overspending June 17, 2020 9 1) Set up standards about what users can ship. Most Common - Different profiles that can be set up by title or need. Example: VP or above can do 8:30 next day shipments, Manager or Director can ship 10:30 next day and everyone else would default to 2:30 next day. There could also be defined default carriers, service levels and cost centers set up to ensure compliance.
  9. 9. Issues Management • With a diverse set of users, you will have varied issues that will need resolution. These could be as simple as a password reset to a technical question about the system functionality that needs to be resolved instantly so they can get an urgent package out the door. June 17, 2020 10 1) Dedicated Resource - Trained in all aspects of the system and has access to the administration functions of the tool to make changes. 2) Case Management System - Document the activities, validate resolution and provide notes so best practice tips can be shared throughout the organization.
  10. 10. Postal Advocate – Case Management System June 17, 2020 11 • Dedicated client specific landing page • Customized messages and links for common questions. • Pull down menu for common carrier requests • Once the case is submitted: • Email is sent to Postal Advocate to start the process • Email is sent to the requestor with a case number • Activity is created and notes are entered into their location record. • Resolutions are taken care of by Postal Advocate with communication to the location and closure to the activity. • All cases, activities, contacts and notes are stored for reporting and archiving.
  11. 11. Reporting • This is where most organizations drop the ball. They know holistically from their invoice what they are spending and since they may be using an audit service to look for overcharges, they feel they are covered. Reporting is the #1 way to reduce costs. If done correctly, can implement change. It can show where there is overspending, and the data can be shared with the key stakeholders to drive different behaviors with their teams. June 17, 2020 12 These are the most effective reports that we have found for our clients that drive savings. They may be manual to create but have the greatest savings impacts. 1) Next Day Savings – Shipment savings by converting next day 8:30 and 10:30 delivery to 2:30. 2) Same Delivery Time Savings – Savings by optimizing the carriers for the same delivery time using a lower cost shipping service. Examples: Next Day end of day to Ground for local zones. Two and Three Day to Ground for zone 3 and 4. Two, Three Day and Ground compared to USPS Priority. 3) Interoffice Mail – Shipping costs by location and method between facilities. Packages can be consolidated, and different methods used to optimize the spends. 4) 8:30 Delivery – Which groups used this very expensive service the most. 5) Active Users – Report all active users on the system to compare to the corporate directory. 6) Potential Theft - Packages that were not shipped from or to a corporate location or sent to one of the main e-tailers like Amazon.com. 7) Incident Report – Listing of all employee issues and requests with final resolution and response date.
  12. 12. Reporting Review and Disbursement • The only way reports are effective is if the information is reviewed and there is a process for getting the data to the right parties to who can impact change. With our clients, we have found that creating monthly review meetings with the data and then coming up with a plan for the best ways to action the information is the most effective. Key Points: 1) Educate – Corporate education or working directly with end users so they understand the impact of their choices 2) Maintenance of the data on internal portals with links. 3) Users understand that this data is being watched and that everyone needs to play their part in making the best choices. 4) Update best practices so it remains visible. June 17, 2020 13
  13. 13. Technology Options • There are new multi-carrier acquired shipping systems that can make this process easier and we are seeing a lot of movement for the following reasons: – Rate Shopping – These systems can compare your discounted rates and service levels across multiple carriers at the time of shipment; making it easier for your end users to make the best choices. – USPS® Stamp Printing – Some of these systems can let your users generate USPS postage stamps at $.50 per piece. This can reduce the need for postage meters or trips to the Post Office. More importantly, it can keep users from sending non-critical items through expensive overnight services. – Single Sign On – They can eliminate the manual user management discussed above because it is connected real time to your corporate address book. – Easy to Implement – Since the newest systems are cloud based and remotely hosted, there is little to from an IT perspective. – Simplified Reporting – Many of the reports mentioned above can be automated through the newest tools. June 17, 2020 14
  14. 14. Moving from Air to Ground Service • Guaranteed next day delivery in Zone 2 • Guaranteed 2-day delivery in zone 3 and some of 4. • Could replace the majority of 3D. • Need to provide packaging – Would need items that could be ordered from your office store supplies catalog. • Would need to have educational programs that we would run on where this service makes sense. • Web links would need to be maintained where offices could reference best practices. • Reporting would need to be created to see the change in behavior over time. June 17, 2020 15
  15. 15. Convert 8:30 to 10:30 delivery June 17, 2020 16 • You are not receiving the same discounts on 8:30 delivery as you do on 10:30. • Are there any controls that you want to set up in your system or the location level about who can use this service? • Visibility to the largest users of 8:30 service. • Would need to have educational programs that we would run on where this makes sense. • Web links would need to be maintained where offices could reference best practices. • Reporting would need to be created to see the change in behavior over time.
  16. 16. Consider the USPS® • Does everything have to go Air? • USPS Letter for $.50 and flats start at $1 • First Class Parcel with tracking for items under 16 ounces from $2.74 - $5.70 • No Residential Charges - $4.10 or Delivery Area Surcharge fees - $3-5. • No Saturday Delivery charges at $16 • No Address Correction fees at $17 • Free boxes (Priority and Express) • Online tracking and day specific expected (Not guaranteed) delivery • PC Postage options start at as little as $15 per month per location June 17, 2020 17
  17. 17. Convert 1lb Package to 1lb Letter • Letter rates are less than the 1lb package rate. • Locations may be using the wrong packaging or logging the items incorrectly in their carrier provided systems with significant cost differences. • Educational programs should be run. • Web links need to be maintained on intranet where offices can reference best practices. • Reporting needs to be created to see the change in behavior over time. June 17, 2020 18 Weight 1DA Pri 1DA Sav 2DA AM 2D Letter 183617 67564 696 18357 1 13555 6425 457 6548 6 Month Client Sample Zones 2 3 4 5 6 7 8 1 lb. $30.31 $44.88 $58.69 $65.75 $69.22 $77.80 $79.95 Letter $25.35 $30.48 $38.90 $41.60 $42.44 $46.70 $48.84 Difference $4.96 $14.40 $19.79 $24.15 $26.78 $31.10 $31.11 % Difference 16% 32% 34% 37% 39% 40% 39% List price carrier rates 10:30 delivery
  18. 18. Rate Shopping Savings Opportunities June 17, 2020 19 Client Example Savings Strategy # of Packages Shipping Cost New Cost Savings % Savings Annual Savings Next Day Zone 2 Converted to Ground 11123 $74,255 $47,173 $27,082 36% $324,984 2 Day Zone 2 and 3 Converted to Ground 1232 $6,726 $4,364 $2,362 35% $28,344 3 Day Zone 2, 3, 4 and 5 Converted to Ground 94 $735 $461 $274 37% $3,288 Total Savings 12449 $81,716 $51,998 $29,718 36% $356,616 8:30 AM Delivery - Convert to 10:30 AM Delivery 202 $13,382 $2,698 $10,684 80% $128,208 Convert 1lb Package to 1lb Letter 2702 21415 17561 $3,854 18% $46,248 Priority Mail Savings over UPS 2D, 3D and Ground - Savings over $.50 per package 1988 $18,810 $14,214 $4,596 24% $55,152 Audit Shipments not getting the corporate discounts TBD Future Education Strategies TBD
  19. 19. Rate Shopping Savings – Internal vs. External June 17, 2020 20 • 80% of packages sent internally are overnight vs. 41% that are sent externally • Large rate shopping savings by choosing the most optimal service as shown below. • Much greater savings by converting Next Day to slower services – Does every internal package have to be there by tomorrow? Package Breakout FeeType #ofTransactions Spend % #SentOvernight OvernightSpend %SentOvernight TotalPackages 118430 $1,517,776 100% 56550 $769,912 48% Packagesgeneratedby a ThirdParty 45136 $539,864 38% 3380 $44,980 7% Packagesgeneratedclient 73294 $977,912 62% 53170 $724,932 73% Packagesgeneratedby cleint-Sentinternally 58786 $736,710 80% 47190 $624,390 80% Packagesgeneratedby client-Sentexternally 14508 $241,202 20% 5980 $100,542 41% AnnualEstimates Client Example
  20. 20. Savings Opportunities – Inbound Freight • Most clients have aggressive shipping rates yet most of the inbound freight is sent using the vendors rates. In many cases, you may be charged non discounted rates plus a handling charge. • Savings come from converting vendors to your account for inbound items. • How Postal Advocate can help: – Analyze the top 500 vendors to see how shipping charges are being handled and quantify the savings impact. – Create a simplified and standardized process to convert vendors to clients shipping contracts. – Work with client and vendors to convert contracts and discounts. – Track the spend from these vendors inside the carrier files to track savings. June 17, 2020 21 Inbound Freight Estimated % Amount Total Vendor Spend $1,500,000,000 Spend for Items Shipped to client 50% $750,000,000 Incoming shipments coming in small parcel vs. LTL or client delivery 50% $375,000,000 Spend on shipping and handling 10% $37,500,000 Shipping costs using Client rates 36% $13,500,000 Current inbound shipping spend using client rates (From Audit) $728,000 Potential Inbound Savings $24,728,000 Client Example
  21. 21. Savings Opportunity #2 – Optimize Box Sizes • Client example - 72% of the shipments are being charged higher rates than the shipper entered due to the size of the box (Dimensional Rating). • Size of the box is determining the weight of the item vs. the actual weight. • Savings come from optimizing the sizes of the boxes used to best fit the outgoing items. • How Postal Advocate can help – Work with client supply chain to find out what boxes are being used throughout the facilities. – Analyze what is being shipped to see if smaller box sizes can be utilized. – Develop a box plan that will make sure the right facilities have the correct box sizes to meet their requirements. – Create an education plan that can be used to educate staff on making the correct box choices. – Work to make sure that the correct dimensions are put into the shipping platform so the correct rates are calculated at the point of shipment. June 17, 2020 22 Weight Difference Group # of Packages Total Spend Correct Weight 7372 $205,820 1-5 LB Increase 8144 $79,212 6-10 LB Increase 2700 $31,948 11-25 LB Increase 7950 $70,380 >25 LB Increase 506 $29,123 Total 26672 $416,483 % with Incorrect Weights 72% CALCULATING DIMENSIONAL WEIGHT L x W x H / 139 = Total Cubic Sq Inches
  22. 22. Optimize Accessorial Fees • Compare USPS Priority for items that need to be delivered on Saturday. • Update addresses in your system so you are not paying for continual address correction fees. • Consider third party insurance vs. carrier declared value. • Optimize your box sizes to reduce dimensional rates. • Pay attention to pickup fees. Do you need daily pickups at every location for up to $29 per location? 100 locations x $29 per week x 52 weeks = $150,800! June 17, 2020 23 Fee Type # of Fees Sum of Fees # of Fees Sum of Fees % of Total Cost Saturday 6 $83.20 156 $2,163.20 0.14% Adr Correct 75 $1,191.73 1950 $30,984.98 1.98% Bill Weight 122 $568.89 3172 $14,791.14 0.95% Dec Value 27 $151.12 702 $3,929.12 0.25% Del Area Surch 238 $581.21 6188 $15,111.46 0.97% Dim 629 $2,037.55 16354 $52,976.30 3.39% Fuel Sur 5328 $3,677.30 138528 $95,609.80 6.12% Misc 80 $136.38 2080 $3,545.88 0.23% Pickup 46 $43.70 1196 $1,136.20 0.07% Residential 149 $616.10 3874 $16,018.60 1.03% Service Charge 904 $1,600.20 23504 $41,605.20 2.66% Third Party Bill Svc 2356 $987.72 61256 $25,680.72 1.64% Weight Adj 5 $22.06 130 $573.56 0.04% Total Fees 9973 $11,697.16 259298 $304,126.16 19% Shipping Only $48,357.50 $1,257,295.00 Total $60,054.66 $1,561,421.16 2 Week Sample Annual Estimates Client Example
  23. 23. Summary • Organizations are spending millions of dollars in carrier expenses and not looking at the items above that can drive the greatest cost savings • Often the employee responsible has limited tools and resources to optimize the process • With the right oversight, reporting and systems it can provide the greatest opportunity for savings and the ability to change behavior to focus on making the best choices. June 17, 2020 24
  24. 24. Helping multi-location organizations streamline their mailing costs Over 160,000 pieces of equipment, managed by Postal Advocate Recovered over $16,500,000 in lost postage, vendor overcharges and fees ENTERPRISE-WIDEMAILAUDITANDRECOVERY OVER $61,000,000 IN CLIENT SAVINGS $1.6M 58% Average Client Savings Average Equipment Savings HOW WE DO IT • 175+ years of industry experience • Comprehensive web-based tool providing visibility of all mail and equipment spend • Time Savings - Assistance in fleet management visit www.postaladvocate.com or call (888)977-MAIL(6245)
  25. 25. Sign Limited Agency Agreement/Kick-Off Call. Provide copies of vendor invoices, AP export, location list, equipment inventory list. Present savings opportunities and get client approval. Postal Advocate provides ongoing support, manages renewals, billing and vendor compliance. Provide enterprise visibility of all spend, costs and documented savings through enterpriseAdvocate. Provide client log-in. 1 2 3 4 5 6 HOW IT WORKS Work with current vendor to build population report, contract terms/start/end dates, postage volumes, costs. Analyze spend, check for contract compliance, billing errors, vendor fees/overcharges, lost postage. Identify savings opportunities. Submit vendor credit requests, lost postage forms and eliminate avoidable fees. Negotiate pricing. Create catalog. Work with locations - asset validation, rightsize, termination… Full implementation of savings. visit www.postaladvocate.com or call (888)977-MAIL(6245) Conduct Analysis NO COST – AUDIT PHASE CONTRACTED CLIENT
  26. 26. Upcoming Webinars The Future of Mailing – Virtual On Demand Mailing September 23, 2020 – 11:00AM EST Register through www.postaladvocate.com June 17, 2020 28
  27. 27. June 17, 2020 29

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