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Taking on the burden of surcharge management

It’s that magical time of year again when most of us are preparing for the holidays, the new year with identifying new resolutions, and ensuring our best that we’re ready to start off the new year strong and prepared for whatever may come our way. Some are also preparing for holiday breaks yet only after situating what’s needed for the new year. Even with the most dedicated intentions, we can’t be completely prepared as we all learned from COVID-19. And that’s okay as we can’t control everything yet we can plan and implement preparations to help us do our best. In the shipping industry, the new year reminds us of contract rate renewals with new rates for shipments and surcharges. An opportunity to negotiate better rates for our businesses and build relationships that will allow us to partner well as we move through the new year together. 

At Shipium, our team remains in discussions on what our customers need through peak season, and what will be needed into the new year. It’s the busiest time of year for retail where many learn lessons to review and implement for next peak season. Though new learnings are always on top of mind, Shipium’s cutting-edge team of engineers built a phenomenally integrated Carrier Configuration model that allows our customers to easily self-drive and update their carrier rates as needed by uploading the new carrier contract and rates, both carrier and surcharge. Though base rates and surcharges are typically updated once a year and at the beginning of the year typically at 5 - 6%, our customers still have the independence and ease to update their carrier and surcharge rates, and establish their preferred update cadence, whenever needed by easily accessing the Shipium Console at any time. As the console information is updated, all data is still utilized to provide the Carrier Rate calculation with Carrier Selection Rules to determine the best suited, most cost effective carrier for each shipment. At Shipium we provide the very best automation technology around selecting the right carrier for the right shipment, every time. 

There are various use cases that apply to surcharge management depending on your carrier relationship, rates and surcharges. There are primary surcharges that apply all the time, and there are perpetual surcharges that apply during peak season and holidays. Most surcharges will typically layer into one of the following as additions based on your shipment preference:

  • Fuel Surcharges - based on the fluctuating cost of fuel (typically a percentage) 
  • Destination Surcharges - based on the shipment origin zip code (updated annually based on geography)
  • Package Surcharges - based on larger/heavier shipments requiring additional handling 
  • Value-Add Surcharges - based on carrier applied extra features (customer signature requirements, weekend delivery, etc.)
  • Peak Surcharges - based on busy shipment traffic (holiday seasons, permanent COVID-19, etc.)

Keep in mind there may be surcharges that cannot be predicted ahead of time, such as a bad address or late invoice fee. There are also some surcharges that shouldn’t be modeled and can be configured as needed in the console. For example, if a carrier has a $1,000 surcharge for an extremely large package, it’s understood that you may not want to pay that price nor want to include the carrier in your rate calculation. It’s as easy as ensuring your configuration is accurate, and knowing you can update your configuration if your carrier rate changes. 

Ship with Confidence and Peace of Mind

The most valuable use case is based on cost savings. Shipium’s surcharge management expertise provides you peace of mind and confidence knowing the best carrier has been selected, and the best rate has been calculated. Ensuring that your carrier contract is current along with your negotiated carrier and surcharges rates, will allow you to certify that your Shipium Carrier Rate calculation is indeed accurate and allows you the freedom to select the perfect carrier. To provide a deeper sense of confidence, you can prioritize your surcharges in your preferred sequential order. 

Another up and coming, popular use case is to include regional carriers as a shipping variable in your carrier calculation. It not only provides you more carrier options yet it may provide you a cheaper option with your carrier rate and surcharge inputs. It will also allow you to build solid relationships with carriers when shipping to specific geographical locations that may not be covered by various carriers. For example, including regional carriers allows you to extend beyond working with the national carriers and you can include specific carriers when you ship to a certain zip code. This is important as all carriers may not deliver to your shipment destinations. Flagging this use case is important as many companies are truly not aware of regional carriers and their shipping abilities, and many companies are charged higher rates and incur higher shipping costs because they work only with national carriers. 

Along with the comfort of managing your carrier contracts and rates on your own with the Shipium Console, our Transportation Operations Team is readily available to support you as needed. Whether you need support to discuss your carrier contracts, figure a certain shipping calculation, upload your carrier rate files or need direction in driving through the console. Our team is here to help. We’re here to discuss surcharge management, how it works, and provide any necessary support you may need to set your account up for constant success. Plus, you’re provided with a dedicated Implementation Manager and Customer Success Manager to ensure you’re on the best path and aware of all of your options. 

Our Shipium team is ready to support you as you finalize your carrier contracts and rates this year. Know you’ll gain the confidence and flexibility to manage your account in the console, and can rest assured that all data captured can be applied towards our solution platform that includes Carrier Selection, Delivery Promise, Fulfillment Engine, Simulation and Track & Trace. You can consider us your unified supply chain team. Reach out today to schedule a demo, and learn how quickly and easily Shipium can be added to enhance your supply chain needs.