Reduce courier costs - the secret is in the details

Reduce courier costs - the secret is in the details

Even with the amazing degree of technology that has changed how the business delivers information, many companies have a legitimate need for Courier Services. As with virtually any supplier-delivered services, there is an opportunity for cost abuse that consumes in profit. Abuse may be due to internal self-esteem, lack of expert information or inability to act on available information.

Service providers services can be divided into two general categories. The first category On-demand or Special is reserved for download and removal of a single package that requires delivery on the same day. The other category, Routes, generally covers all services scheduled on a regular cycle, such as daily (or overnight) mail bags, post offices, record offices, bank deposits and dedicated couriers that are employed internally. Determining the type of service to be used depends on the type of delivery and parcel planning.

ON-DEMAND SERVICES: What to look for

Are your industry staff properly educated about the benefits of proper planning? On-demand service levels may vary from immediate delivery to delivery within 6 hours. Courier costs are significantly higher for rush jobs than they are for deliveries that allow more time. Does the staff carefully assess how urgent delivery is before choosing a service level? Often, such an assessment may result in the use of an overnight transfer vessel, such as UPS or FedEx, instead of avoiding significantly higher prices for the courier service.

Is your staff aware of the access to the Route Service?

The utilization of this service usually results in savings of 50-80% compared with the more known On-demand service.

Is the seller applying the same discount for all locations within the organization?

As usage volumes increase, the supplier must provide special prices, and these discounted prices should apply to all branches or premises within the company.

Are supplier invoices sufficiently detailed?

To check if the price for each delivery is appropriate, the invoice must contain total cost, shipping and shipping address, service level, date and time of order placement and delivery of packages. Excluding any of these data excludes verification and allows for overcharging.

Fixed prices against Point-to-Point

Fixed prices are priced in relation to pickups or deliveries within a particular zone, which usually includes the high density traffic areas in the city center and some of the nearby suburbs. Points outside of default zones are billed at a distance based rate. Tiles are advantageous if the distribution of activity is greater for the zones extremities. However, if the majority of operations take place on points that are just within the zone, distance based rates can justify considerations. In order to make this determination, the customer should request and get a printed schedule of prices for each level of on-demand service. Otherwise, it will be difficult to monitor the fees for purchases and deliveries. As an example, it is not uncommon to find office supplies, storage products and refreshments distributed to branches using courier companies because the central office is the only recipient for these products. Costs can be significantly reduced in these situations by providing the provider with multiple recipient sites under a main account.

ROUTER: What to look for

Routes must be reviewed regularly to ensure that frequent collection and delivery points are included and that points considered rare or irregular are excluded from the route. The scheduled pickups will meet the staffs ability to have packages properly prepared and ready for the arrival of the courier. Invoices should reflect the current tax rate for the actual service provided, to prevent, for example, charging for 10 seats when only 8 offices are active. Due to the expanded relationships developed between courier services and courier coordinators, personal friendships often lead to the fact that they do not continuously review prices and evaluate the service on a regular basis. Rate creep goes unprecedented because the coordinator considers that the seller would not charge his friend more than necessary and have no reason to doubt that the service level is the best available for the price.


Whether its a bidder or any other administrative area, its in an organizations best to use multiple vendors for identical features. This promotes supplier competition and ultimately leads to better prices and higher service levels.

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