Whoa! Don’t Get Stung by Overnight Freight!

Accounting stunned by freight costs?Recently, one of our customers was stunned with a bill for overnight freight 1.5 times the value of their order. This made us stop and take a look at package shipping.

In the U.S., there are effectively only two companies providing package delivery service for industry, United Parcel Service and Federal Express. (The U.S. Postal Service does not offer pickup/delivery to industry shipping departments.)

Rate structures for UPS and FedEx are very similar and both companies dramatically increased rates in 2015 for “dimensional weight” shipments. Dimensional weight charges are a surcharge based on bulk (package volume) when package weight is small relative to it size. Empty plastic containers almost always ship based on dimensional weight.

For example, a carton of two 10L PharmaTainer Carboys weighs 4.7 to 5.2 lbs. depending on the plastic. Carton dimensions are 18x9x18 inches resulting in a dimensional weight rating of 18 lbs.

Bearing in mind that distance is also a factor, we have an example based on shipping 3 cartons of 10L carboys via ground service from our Virginia warehouse to Boston, Chicago and San Diego.

Service Boston Chicago San Diego
Ground Service $ 50.00 $ 60.00 $ 105.00

Not too terrible, but look what happens with premium delivery services! (Shown as a factor of the approximate ground service charge) Hello! Standard overnight service is $438 to $576 for our 3 cartons.

Service Boston Chicago San Diego
Overnight Air (before 10 AM) 9.7X 8.9X 5.7X
Standard Overnight Air 8.0X 7.5X 4.9X
Economy Overnight Air 7.9X 7.0X 4.8X
2nd Day Air AM delivery 3.3X 3.8X 3.6X
Standard 2nd Day Air 2.9X 3.3X 3.2X
3 Day Service n.a. 2.2X 2.5X

Our advice: if you have an unplanned need for a PharmaTainer product be very aware of the differences in service rates and be specific about the preferred delivery method. If your organization has a discount agreement with one of these carriers, have freight billed to your freight ­account and save.

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