You current parcel auditor might believe he is giving you the best rates, but chances are the way your parcel auditor is determining savings for carrier negotiation and shipment auditing is dangerously wrong. If your auditor fails to show the savings on a per package basis, then the savings are being computed inaccurately. Share A Refund retrieves recent invoices from DHL, FedEx and UPS accounts and analyzes each shipment individually. It’s the best way to secure the exact savings.
You could be overpaying your auditor on service fees and missing out on money. Let’s take a look at an example to show you how this might look.
Averages lead to inaccuracies
For other parcel auditors packages are grouped into UPS Next Day Air:registered: Early 1- 5 pounds. The average net cost per package is then summed to get an average cost per package without considering the different zones. This number is then compared to the ‘old’ average of UPS Next Day Air:registered: Early 1-5 pound packages to find the next savings.
Do you notice the mistake? Averages won’t work when it comes to securing the best rate because averages lead to inaccuracies in calculations. Imagine there was a two-pound package that was shipped around the world in the old group. The farther a package must travel, the more zones it crosses and the higher the cost. Should an auditor compare that cost to the packages that are shipped Zone 2? Doing so would create the perception of savings, but really it’s comparing apples to oranges.
Below is an example of list prices for the same service type, but going to different zones. The zones make a dramatic difference in pricing.
UPS Next Day Air ® Early
- Zone 102
- Pounds 5
- $66.69
UPS Next Day Air ® Early
- Zone 124
- Pounds 5
- $148.69
In the above examples, the service type and weight are identical, but the zone creates an $82 difference. This is something an auditor rarely considers and any calculation that doesn’t factor in zone costs is a mistake.
For weight, there’s a similar theme.
UPS Next Day Air ® Early
- Zone 102
- Pounds 1
- $66.69
UPS Next Day Air ® Early
- Zone 102
- Pounds 5
- $59.37
Every component needs to be segmented instead of grouped together. This shipment has the same service type and zone, but the variation in weight causes a $7.32 difference in list price. If an auditor is making correct calculations to find you the most money, that auditor shouldn’t be grouping weight.
Read more: You’re not crazy. Your shipment auditor is ripping you off.
Why correct shipment classification matters
Why does it matter? The calculation for savings is the basis for gain-share pricing. Bad math yields a misrepresented savings number. If that savings number is misrepresented then the invoice generated based on this savings amount for gain-share pricing models is also invalid.
Share A Refund calculates savings on every single package to the penny. Changes in dimensional weight are mapped to the proper list price when determining the savings on a given shipment, unlike other parcel auditors.
If you’d like to have Share A Refund run an assessment of your current auditor and the amounts being billed to you each month based on the savings, then contact us by pressing here.
