Shipping rates rise, but companies can still save

AP News
|
Posted: Oct 14, 2010 5:17 PM
Shipping rates rise, but companies can still save

Small businesses got a reprieve when the U.S. Postal Service was told "no" in response to its request for a rate hike last month. But other shipping costs are going up, and that means owners need to find ways to save money on their mailings.

FedEx has announced price increases that will take effect Jan. 1. And United Parcel Service is raising freight rates. That doesn't cover overnight letters and packages, but companies that need to ship by freight will be affected.

And the Postal Service is in such financial trouble that it may still get its rate hike approved. It can appeal the Postal Regulatory Commission's denial of its request, or it can submit a new proposal. So small business owners need to think about how they can save when they send.

COST ISN'T THE ONLY ISSUE

First, remember that although you want to save money on mailing and shipping, there are other factors to consider.

Gary Robinson uses the Postal Service to ship many of the packages for his business as a New York-based personal stylist and clothing buyer. But depending on the shipment, and the recipient, he may use a global delivery service instead.

"Who's going to get it done quickest, most reliably and the most cost-effective," is what Robinson is looking for. So, if it's a shipment that he wants to track closely, he'll go with a delivery service. FedEx and UPS, for example, have more detailed tracking information online.

In more remote parts of the U.S., sometimes the Postal Service can get a package delivered faster than the delivery companies, Robinson has found. But if Robinson is shipping overseas, where many of his clients live, his choice will depend on how reliable mail delivery is in a recipient's country. If it's dicey, he'll use a big global delivery company.

BE INFORMED, CREATIVE AND FLEXIBLE

Learn all you can about mailing. The more tricks and shortcuts you know, the more you'll save. For example, you might find that if you can fold your documents, you can get them into a smaller package. Size, not just weight, can affect what you pay.

If you have enough pieces of mail, you might qualify for a bulk mailing rate. If you don't have to get a package delivered overnight, use two-day service. If you can use postcards, you can buy cheaper stamps.

As usual, the Internet is a great place to find out about mailing. Look at all the websites you can find for companies that provide mailing services.

And talk to other small business owners, particularly those whose operations are similar to yours. They can give you tips, including the pros and cons of different options.

"Ask 10 people, and find out which answer comes up the most times," Robinson said. "Then use a service and see how it works for you."

NEGOTIATE, NEGOTIATE

There is enough competition among all the mailing services that small businesses should be able to negotiate a good rate and/or services. For example, you shouldn't have to carry all your own packages to the post office or a drop-off location. The service should pick up free of charge.

You might find that a local service that's hungry for business is willing to work with you on a better price, especially if it's growing and wants your word-of-mouth advertising. Depending on what kind of business you're in, you might be able to barter some goods and services.

SEND IT ONLINE

Obviously anyone who has ever sent an e-mail knows they've saved money on postage. And businesses, depending on their size, have saved thousands or millions of dollars.

For example, news organizations that once received bins and bins of hardcopy press releases about companies and their products now get very few. E-mail is now the preferred method of delivery for publicists, who have cut their costs dramatically. The savings has been on paper, envelopes and printing as well as on postage.

But a business that needs to send very large files may find that recipients' mail servers will bounce them back because they're too large. The solution: online services that will let you upload your file to their servers, and then your recipients can retrieve them using a log-in and password. If you don't know anyone who can recommend such a service, do an online search for "send large files online" and then start comparison shopping.

_____

Online

U.S. Postal Service, http://www.usps.com

DHL, http://www.dhl.com

FedEx, http://www.fedex.com

UPS, http://www.ups.com