May 8, 2022 •Chase Flashman
For high-volume small parcel shippers, the little things can really add up. In this context, “little things” refers to shipping invoice line items—like various carrier-applied surcharges. To put it simply, if you’re a high-volume shipper and conducting a timely parcel invoice audit isn’t part of your regular, routine processes, you might be paying more than you need to.
In this blog, we’re going to introduce you to the basics of how to conduct a small parcel audit. We’ll sort out the differences between small parcel and freight shipping, outline basic parcel audit services, and introduce you to a way to automate parcel audits while saving 25% on your small parcel shipping.
Let’s jump right in.
What Is a Small Parcel Shipment?
The term “small parcel shipping” simply refers to the transport and delivery of parcels (or individual packages) of a certain size. When you’re shipping one or more individual parcels that weigh less than 70 pounds through the familiar carriers (i.e., UPS or FedEx), then you’re doing small parcel shipping.
It’s also important to note that physical dimensions (beyond just parcel weight) matter, too. For example, UPS and FedEx categorize parcels that exceed 108” x 165” as freight—regardless of weight.
Small Parcel Shipping vs Freight Shipping
Unsurprisingly, when it comes to categorizing small parcels vs. freight, size matters. As noted above, small parcels max out at 70 pounds. Parcels between 70 and 150 pounds are classified as “heavy” (and may incur surcharges), and anything heavier than 150 pounds constitutes freight. That being said, the freight audit process is largely similar to parcel auditing services.
What Are Parcel Audit Services?
“Parcel audit services” refer to the processes involved in ensuring that shipments are being accurately charged by the carrier. For high-volume parcel shippers, dollars and cents add up, so it’s wise to regularly audit shipping invoices to make sure everything matches. This not only means holding carriers accountable for providing the level of service they promise, but also securing refunds for late deliveries, incorrectly applied (or duplicate) surcharges, and more.
A small parcel audit can unlock savings for shippers and can be conducted either internally or externally. For example, high-volume shippers might work with an e-commerce shipping consultant, invest in parcel audit software, or partner with a company like ShipSigma that offers comprehensive parcel audit services.
How Does Small Parcel Auditing Work?
Now, you might be wondering what exactly the parcel auditing process looks like. Or you might be wondering “What does a shipping consultant do?”
Whether you conduct these audits internally or work with external software or an auditing consultant, the process is generally the same. It begins with taking a careful, detailed look at shipping invoices and reviewing your carrier contracts and service level agreements. Ideally, everything will match perfectly—no problems with any shipments, and no erroneous surcharges, duplicate charges, or misapplied rates. ShipSigma’s platform saves auditors a ton of time over manual audits by automatically identifying opportunities for refunds.
A thorough audit will review the following areas (among others):
- Rates: Rate errors are usually ironed out during the early stages of carrier negotiation. A small parcel audit will ensure that agreed-to rates (including any negotiated discounts or other incentives) are being accurately applied.
- Billing adjustments: Auditing any accessorial charges that appear (or don’t appear) on an invoice is an important step in holding carriers accountable by making sure their billing is accurate. Carriers apply accessorial charges when services are needed that are outside the bounds of the negotiated base rates. These might include residential delivery fees, address corrections, non-standard physical dimensions, dangerous goods, and more.
- Late shipments: Paying close attention to whether deliveries occur on time is an area that can lead to carrier refunds. A late shipment (without a valid exception reason) can be processed for a refund. Conducting prompt audits helps ensure that refunds are requested and processed within a specific time frame determined by the carrier.
Cut Costs By 25% with ShipSigma’s Parcel Audit Services
ShipSigma offers a comprehensive range of parcel auditing services, making our shipping insights and analytics platform a one-stop-shop for parcel invoice audits and carrier contract negotiations.
For small parcel audits, our AI-powered platform helps identify instant savings. With fully automated invoice auditing, high-volume shippers can reduce the cost of every shipment. Let our platform automatically scan your invoices (with a 50+ point audit) to ensure contract compliance and identify, submit, and verify refund claims. Connect with us to try it free today!