When it comes to overnight deliveries, big companies tend to put aside thriftiness and restraint. Spending $15 to send a not-so-urgent document is simply considered a cost of doing business. Small firms, however, can't blindly use this luxury, especially since overnight prices have gone up over the past few years. In fact, UPS and FedEx instituted another set of price increases in February (with Airborne Express following suit a month later), boosting prices an average of 3 percent to 4 percent.
The good news is, you can do more than just fork over another chunk of your hard-earned money. There are several simple, practical steps you can take to hold down delivery costs:
- Don't settle on next-morning delivery by default. In this industry, time is truly money, so take the time to ask when the package needs to arrive. Often, you'll find the recipient is satisfied to receive a package in two days, as long as it arrives at the agreed-upon time.
This simple question can slash 20 percent to 50 percent off your delivery costs. Because delivery service charges are time-dependent, a package arriving at 10:30 the next morning can be up to 20 percent more costly than a package arriving 51¦2 hours later. Moreover, sending a package by two-day service will be 30 percent to 50 percent cheaper than next-morning delivery.
- Stay in the zone. You can also save if you choose a carrier based on how far the package is going. UPS and FedEx both charge based on the distance of the delivery. Even with their price hikes, this zone-based pricing usually makes shipping to local regions via FedEx or UPS more cost-effective than options offered by their competitors.
On the other hand, zone-based pricing falters when it comes to shipping packages long distances. We found Airborne Express' flat rates to be more competitive for shipments to locations more than 600 miles away. By taking advantage of these differences, you can save approximately 30 percent off the delivery cost of any given package.
- Weigh your options. Carriers often specialize in handling packages of a certain weight. While all the services will deliver almost any size package anywhere, rates vary based on the package's weight.
Dramatic savings can be found when sending heavy shipments in particular. One company needed to make an emergency overnight shipment of books to a customer in St. Louis. By using BAX Global instead of its standard overnight shipper, the company saved nearly $800. Emery also offers attractive rates for shipping freight overnight.
For shipments weighing less than 5 pounds, Airborne is hard to beat. Similarly, for two-day air delivery, RPS Inc. is always competitively priced.
Looking to send a package abroad? DHL Worldwide Express is always a good bet for its extensive delivery network.
- Avoid weekend and holiday deliveries. You'll routinely be hit with additional charges of $10 to $25 to deliver that package on Saturday. The way to avoid these surcharges and get your packages delivered any day of the year is to turn to the U.S. Postal Service. Neither rain, nor sleet, nor Sundays and federal holidays seem to stop it from delivering.
- Mix and match. An established shipping strategy can help bring all the pieces together. If your company sends a wide variety of packages, the best solution is the mixed strategy. Establish accounts with multiple carriers--it's free, and it gives you the flexibility to use different carriers based on whichever one offers the service you need at the lowest price.
If you'd rather not deal with multiple carriers, choose the one that most cost-effectively handles the type of shipping, whether by weight or destination, you do most. By consolidating all your shipping with a single carrier, you'll reduce the number of bills you receive and begin to build enough volume to qualify for a discount.
- Master the art of negotiation. No matter why you use a particular carrier, it makes sense to negotiate a discount. Determine how much you spend on shipping in one year, paying particular attention to the average weight and distance packages travel, as well as the volume. And be generous in your projections; even if you don't meet them, the carrier will adjust your rate accordingly, without penalty.
- Check out "under the radar discounts." Even if you don't qualify for discounts on your account, there are a number of ways you can pay less for your packages. See whether your local small-business or trade association offers shipping discounts. For example, American Express corporate cardholders can save 10 percent off standard FedEx rates for domestic shipments by using their cards to charge shipments.
Willing to pay in advance for shipping your packages? If so, you'll want to try using the prepaid packages offered by Airborne Express and overnight resellers like UniShippers Association, an association of companies that combines shipping volumes to qualify for discounted rates. Prepaid packages are convenient, and the rates save you money. Moreover, you can ship as much as you can fit in the packaging without being charged extra for heavier shipments. The catch, though, is that the smallest quantity you can buy the packaging in is in sets of 10.
- Check your bill. I've saved hundreds of dollars by catching package weights that were entered incorrectly or packages that didn't make their guaranteed delivery times.
Airborne Express, http://www.airborne.com
BAX Global, http://www.baxglobal.com
Emery Worldwide, http://www.emeryworld.com
Federal Express Corp., http://www.fedex.com
Mie-Yun Lee is editor of the bimonthly Business Consumer Guide and BuyersZone (http://www. buyerszone.com), an Internet buying service. She is also co-author of The Essential Business Buyer's Guide (Sourcebooks Inc.).