3 Shipping Mistakes That Could Sink Your Small Business

Operations, Technology

Shipping costs are one of the best sources for finding more efficient services.

According to Kevin Lathrop, CEO of Unishippers Global Logistics, here are the most common shipping mistakes we see and tips for how to avoid them:

  • Misunderstanding insurance and the limits of liability. Most small and mid-size business tend to ignore shipping insurance until it’s too late. Or, they don’t understand that carrier liability is not the same as insurance, and as such, may not protect the full value of their shipment. Your business is built on carefully balancing staffing, production schedules revenue streams and profits, all of which can be compromised when a shipment goes awry or is worst case, destroyed. Therefore, it’s key to remember a few things:First, when shipping a small package through UPS, take note of the “declared value” field. If you do not declare a value for a UPS shipment and damage or loss occurs, UPS is only liable for $100 USD. If your package value exceeds that amount, it is recommended to declare a higher value, which will automatically insure your shipment for a small additional cost.
  • Second, when shipping freight, keep in mind that some commodities have reduced carrier liability – like certain electronics, odd-shaped items, etc. Safeguard your shipment by working with a shipping expert to determine which restriction could apply and whether it’s in your best interests to go with shipping insurance.
  • Third, it’s never a good idea to use carrier’s limits of liability to determine whether or not to purchase shipment insurance. Stated carrier liability is the maximum amount the carrier is liable for, not necessarily the amount you will be paid in the event of loss or damage. Insurance is a good idea for all shipments, not just the high value or fragile ones. And, when purchasing insurance, be sure it’s the right amount. It is important to cover the invoice value of the item(s) so your business can recoup the full value should something go wrong.

Not adjusting to new rates and changes. Carriers are grappling with limited cargo space for an overwhelming amount of shipments. It’s hard for them to keep up, and as a result, they’re putting the pressure on shippers to pay close attention to what and how they are shipping if they want to avoid surcharges and extra fees. The start of the year is a good time to get up to speed on new rates and fee calculations to avoid potential shipping pitfalls. One specific area to really pay attention to is your shipment’s DIM weight. Dimensional Weight reflects a package’s density – or the amount of space a package occupies relative to its weight. Anything that is difficult to move on a conveyor belt, or that has a high DIM weight, will incur an additional cost. To reduce shipping costs associated with DIM weight, you can start by reducing your package size relative to the item you are shipping.

Not having all your shipping processes in one place. The shipping industry has come a long way and so has its technology. If you’re not utilizing technology solutions, you’re not optimizing your processes and as a result creating extra work for yourself and your team. The solution:

  • Utilize a Transportation Management System (TMS). These software systems are designed to optimize carrier selection, freight ratings, load tendering and logistics management. Using a TMS solution allows businesses to receive multiple prices and carrier options, resulting in a streamlined shipping process. Additionally, these online tools have reporting functions that allow businesses to track their shipping decisions and analyze the impact.

Careful attention to these three aspects of your shipping program will steer your small or mid-size business in the right direction throughout 2017. And, it’s always a good idea to consult a shipping consultant who can assist your business in developing a shipping plan that meets your specific needs.

Kevin Lathrop is Chief Executive Officer of Unishippers Global Logistics since January 2011.

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