How an Automated Shipping-Auditing Process Can Pay for Itself
If you do it yourself, too little or too much of the shipping-auditing process wastes time and resources
You’ve got to spread your sail as wide as you can as a business owner – especially when it comes to shipping. And when you consider that shipping contributes anywhere from five to 15 percent of your total expenditures, you can see how an increase of even a single percentage point in slippage rates can change your bottom line.
So, shipping audits are crucial, but you still have a decision: Do you handle them in-house or automate? Without automating this labor-intensive process, you’re likely to face these issues:
- Return on investment: The cost of devoting personnel to tracking down shipping refunds will likely cost as much – or even more – than the found savings.
- Time constraints: You often only have a short time to discover late shipments and request a refund.
- Customer satisfaction: Late shipments will inevitably result in negative customer feelings and reviews.
- Workforce limits: You will have to dedicate staff to chasing down shipping problems when they could be helping your company elsewhere.
- Data has power: The information you uncover through shipping automation can guide strategic decisions and improvements.
Below is more detail on the points above to help you make a strong business case for shipping-audit automation.
Automate shipping audits to go on the offensive
It’s important to remember that you’re working with historical information. You’ve already been charged by parcel carriers. Auditing is a cost-recovery issue, and it’s the only way to determine if carriers are complying with their contract. They are not obligated to inform you if they miss the guaranteed delivery time, so companies not doing thorough, consistent audits are likely to miss the refunds due them.
The major parcel carriers do have an impressive on-time delivery performance, ranging from 95 percent to nearly 98 percent. But when you consider that these statistics are based on millions of daily parcel deliveries, even a small percentage of on-time delivery misses could yield you a refund stream that can cover the cost of automating the entire audit process.
Also, the timing of this audit is crucial, because in most cases you only have 15 days to file a claim for a service delivery failure refund. Any automation process you put in place will also help with filing claims within this timeframe.
Turning data into shipping refunds
Technology and tracking have provided all the data we need to determine which parcels were not delivered on time and thus deserve a refund. The challenge isn’t gathering this data, it’s doing something with the potential revenue the data uncovers.
Automating your shipping-auditing process gives you the power to analyze performance information and take actionable steps to increase performance. Because let’s face it: Customers waiting for their purchases have been promised delivery by a certain date and time. You – and not the parcel carrier – will get the blame for a late delivery.
These days, the finger pointing most often comes in the form of a negative review online, which means your reputation is at stake. Studies show that 88 percent of consumers trust online reviews as much as personal recommendations. Automating your shipping auditing process can help you take fast, proactive steps to preserve your brand and keep customer trust. Refunds for delivery failures are your due, but ultimately, they can’t compensate for negative reviews from customers.
Focus your staffing where it’s needed
Organizations that automate their shipping-auditing process find that they are able to increase the amount of refunds due, which affects the bottom line and justifies the effort. It also helps companies reallocate resources that help grow top-line revenue, creating more time available to make strategic decisions. Think about it: Did you create your company to be in the shipping-auditing business?
It's the Goldilocks effect. You know it’s worthwhile to audit the shipping process, but a sampling approach will likely return insufficient results. It’s too little. Focusing too intently on auditing could swallow up time and salaries that won’t be recovered by refunds. Automation is the great equalizer. It moves the entire process – not just pieces of it – off your plate.
More than refunds
We’ve already talked about customer reviews and who gets the blame for a parcel carrier’s missed delivery times. Automated auditing helps there, as with making sure you receive refunds that contractually belong to you. But there’s more that can be derived from the data generated by the automation process.
It gives you access to information that can help you make strategic changes in the way you do business. The data, for example, might help you understand that a change in your production schedule could have a ripple effect throughout the logistics chain. The data can also help you analyze and identify shipping trends that can help you avoid carrier surcharges, which can take a huge bite out of your overhead. These surcharges often vary by carrier.
This data also can help you negotiate carrier contracts – and performance statistics can be a powerful bargaining chip. Your parcel carrier should be a partner in the growth of your business. Find out how automating their audits can help you deepen these partnerships.
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