Wednesday, April 20, 2011

Warehouse Wednesday: Shipping and Handling



Shipping & Handling

Today I'd like to talk to you about the ever changing, ever complicated "shipping and handling".

This is probably one of the most difficult aspects of managing a mail order company. The rates and rules are so diverse, and so complicated, that you have to consider many factors when deciding how best to ship a package.

The commercials on TV make it look so easy. "If it fits, it ships" says the friendly mail carrier. "Logistics" says the man in the brown truck. But when you get down to reality, it's not that simple.

Every order we ship is looked at on a case by case basis to offer you the best shipping option. Since we ship all over the world, we have to keep track of rates for dozens of countries.

US-bound small light weigh orders can ship USPS First Class mail. When orders start getting a little bigger (12 ounces or over), we need to ship by "Priority Mail" or "Parcel Post". Often, Priority Mail is actually less expensive than Parcel Post. Go figure!! Logic would tell you otherwise, but not so. Then we have several sizes of "Flat Rate" options. The friendly TV mailman tells you there are 4 sizes (flat rate envelope and small, medium or large flat rate box). Did you know that is not entirely true? As a commercial USPS account, we also have access to 2 other sizes of boxes. We have the Regional A box and the Regional B box. The A box is the same rate as a 2 pound package… and the B is the rate of a 4 pound package. BUT (and here is the confusing part), these 2 boxes are "region based". In other words, if you live close to us, using the "B" box is a better buy than the normal "medium flat rate box"…. but if you live across the country, the "B" box is quite a bit more expensive. (for the record, Regional A & B boxes are not available at your local post office. They are only available for commercial account holders who purchase postage online)



So for each order, we have to determine what is the BEST size box for your order. We take into account which box your merchandise fits in and where it is going. We price each option to find the best deal.

UPS is another matter all together. Their rates are not the best when it comes to the standard crafting supply order. Most of the time, the rates are higher than the post office. The main reason is because they add a $2 to $4 surcharge for home delivery (depending on how far you are from a major sorting center), then on top of that, there is the surprise of the "fuel surcharge" which is added to our bill at the end of the week…. but does not show on the screen when we check rates. So we might "think" the UPS rate is 30 cents less, when in reality we will be billed a 5% fuel surcharge later on. Then, there is also the $20 fee they charge us each week for having the UPS guy drive by to see if we have any packages. $20 a week!!!! Yikes!!! I think it's time to cancel that service.

International orders face a different sort of challenge. The first rule of international shipping is "under 4 pounds = First Class (which used to be called airmail)" and "over 4 pounds = Priority Mail". A few years ago, the USPS did away with the "surface mail" option which took 2-3 months from point to point, but was a fantastic bargain for heavy orders. We still get request from time to time for a "surface mail" shipping quote…. sorry, not possible.

I won't bore you with all the details of international shipping. Suffice it to say there are 18 "zones" depending on the country we ship to. Each "zone" has different rates as well as size and weight restrictions.

So where does the "handling" part of S&H come into effect? Well, that's where we have to account for use of packing materials (bubble wrap, bubble envelopes, packing peanuts, tape, labels, etc.) as well as gas for the trips to the post office. We try to keep this to a minimum by re-using boxes as much as possible. The USPS does a fine job of telling consumers in their TV ads that they offer a pick up service and will pick up all your packages for you. Another half-truth. They will pick up the packages the NEXT day (adding 1 more day to the delivery time), and our route driver's truck is "too small" for all our daily packages…. so they won't pick up for us. Nice!

Lastly, there are the ever changing (increasing) rates. Just yesterday, another USPS rate increase went into effect. The sneaky devils did not raise the cost of a postage stamp…. so the news media didn't even bother to announce the rate changes. Most people aren't aware that Priority Mail rates went up in January and Parcel (first class) rates went up yesterday…. oh and international rates went up as well. We here at Frantic Stamper have decided NOT to adjust our shipping rates to account for these increases this year. Our shipping/handling rates for 2011 will remain unchanged and we will absorb all rate increases. (Next year, we will most likely have to raise them if the increase happen again)

Hugs,
-Fran
www.franticstamper.com
541-826-2500

5 comments:

  1. I totally agree with you that the transportation is very expensive, but given your product variety, and everything that we can get to your store, transport is not expensive for the quality that we order. So for me, transportation is not a problem! :)

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  2. Wow. I had no idea. Thank you for this information.

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  3. One thing that didn't get mentioned, but may not apply to you. If you have several packages to mail, and you request a pickup, if you don't have at least one Priority package they won't pick up. Go figure.

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  4. Thank you for explaining all that! I just received my first order last week and was pleased that you put it in the most cost effective box! Thanks bunches, P Caudill in Ky.

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