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Using multi-weight rates to reduce parcel logistics costs

Published June 2023

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How can you use multi-weight rates to reduce parcel logistics costs

Logistics and supply chain costs include the costs of moving a product from the market to the end consumer. These expenses are the culmination of numerous interconnected moving components and the outcome of significant choices supply chain managers and their teams make on a daily basis. The percentage of the global GDP that is spent on logistics varies greatly depending on the level of economic development, but it generally ranges between 10% and 15%. Supply chain leaders should reflect on this and ask themselves: “Do you know how much your global supply chain costs are?” Which areas are productive, and which incur significant costs? It’s critical for supply chain leaders to know exactly where their money is going and whether the investments they make are paying off.

Understand your business

The world of shipping and transportation is not as straightforward as it once was. There are more options for transporting and delivering your products because carriers are growing and implementing new procedures and services. One prominent strategy for lowering logistics costs is the use of multi-weight rates, particularly in the case of store replenishment. When shipping multiple parcels between the same origin and destination, parcel service providers offer significantly discounted rates known as multi-weight rates. But these parcels need to be consolidated to utilise the full potential of multi-weight rates.

Two most prominent services for use of multi-weight rates are UPS hundredweight and FedEx multi-weight. You must choose the appropriate shipping service for the real weight of your products in order to determine the most economical and effective transport method for your company. A digital twin with parcel optimization capability can help you evaluate all the options and select the most cost-effective one.

 

When to Consider Multi-weight Rate

1. YOU NEED TO SEND MULTIPLE PACKAGES ON THE SAME DAY

Your best bet is to choose either UPS Hundredweight or FedEx Multiweight if you want to send out smaller products sooner because these shipping options support same-day delivery.

2. YOU ONLY SEND SHIPMENTS TO RESIDENTS OF THE UNITED STATES

Benefits from UPS Hundredweight and FedEx Multiweight are accessible in all 50 US states. If you’re shipping domestically as opposed to internationally, you’ll satisfy both standards.

3. YOUR PACKAGES HAVE A LOWER AVERAGE WEIGHT

UPS Hundredweight and FedEx Multiweight delivery, in contrast to LTL shipping, call for parcels to weigh no more than 150 pounds each and a maximum of 500 pounds for the entire shipment. Because of this, if your company often receives fewer orders or smaller items, it would be worth switching to either of these options rather than LTL.

4. YOUR PACKAGING DOES NOT NEED PALLETIZATION

The majority of heavy-duty shipping services for large shipments require a thorough packaging and dispatching procedure. Packages are shrink-wrapped, fastened with straps, and loaded via a lift gate before being palletized. This process not only takes more time, but it also makes each cargo heavier and more expensive.

The non-palletized nature of UPS Hundredweight and FedEx Multiweight goods makes packing and shipping more efficient. It also implies that, if necessary, you can send a partial delivery.

5. YOU WISH TO VEER AWAY FROM A FIXED DELIVERY SCHEDULE

If your company is small and doesn’t receive a lot of orders, you can opt to forego the set delivery schedule and simply ship orders as they come in. This is made simple with UPS Hundredweight and FedEx Multiweight. These services don’t require you to book shipment times in advance like LTL carriers do. As an alternative, same-day pickup is offered by UPS and FedEx carriers, allowing you to ship your items as soon as they are prepared.

6. YOU’RE SENDING MANY PACKAGES OFF AT ONCE.

The main purpose of these two techniques is to send many parcels to the same location on the same day. But, if you have a range of orders, you can combine them into a single shipment as long as each one complies with the specifications for size and weight.

Conclusion

The specialist services covered in this article won’t lower expenses for all shippers. Implementing new shipping services and efficiently optimising mode selection require very particular project planning, specialised knowledge, and cutting-edge technology.

Think outside the box. Consult a professional who can evaluate your current supply chain and shipping processes. When you had previously believed that margins were already as narrow as they could be, you might be pleasantly surprised to discover huge potential.

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