In business school we learn to focus on the core competency and outsource the rest. Or, at the very least, outsource the painful or mundane, which you’d prefer someone else do. In the overall scheme of things, a parcel audit ranks dead last on all accounts, yet it is as essential to shippers as a good manifest system. Surprisingly, for many companies that ship with FedEx, UPS, or DHL, the parcel audit isn’t even on the radar screen. That’s a problem.
Here’s the issue. Parcel carriers guarantee timely service that is accurately billed. For the most part they deliver as promised, but occasionally they don’t. Now that ‘occasionally’ may mean only 5% of the time, but even 5% means that substantial FedEx or UPS charges remain un-refunded. It’s just simpler to overpay for transport service, rather than hassle to track down and secure credits for late shipments and billing errors.
The same is true for loss and damage claims. Yes, UPS and FedEx shipments are insured to cover the cost of loss or damaged merchandise, but how many shippers systematically file UPS claims? Unless they’re shipping gold bullion or crystal chandeliers, it may not be worth the effort. But even paper documents have inherent value that should be refunded if lost. Since carriers typically have at least $100 per package in parcel insurance, most loss and damage refunds go unclaimed. Companies prudently ignore the problem to focus on the core issues of running a profitable enterprise.
The healthy alternative is to simply outsource the hassle. Direct-Recovery tracks every package you ship, every charge you’re billed. When a shipment is late, or a charge bogus, they contest the error with the carrier and make sure you receive a refund. That way you know you’re not paying what you shouldn’t.
From a shipper’s vantage point, the process is automatic and invisible. Without making any operational changes, the shipper sees credits posted weekly to their UPS or FedEx bills. The fee for the service is a split of the carrier refund. This gain-share approach ensures you always profit from the service.
What’s of even greater benefit is the ‘soft-cost savings’ – operational changes made based on the information Direct-Recovery supplies through the SaaS Business Intelligence module. These cost savings can be huge. Some companies overspend by shipping Air where they could ship Ground without compromising service, or by separating shipments, or skipping the rate-shopping step. Overall savings of 20% is not uncommon.
Interestingly, these soft-cost savings are a freebie thrown in for using the Direct-Recovery parcel audit service. In the world of ‘Free’ business models, Direct-Recovery responds with a ‘better than free’ model – they put money in shippers’ pockets to reward those savvy enough to outsource.