Did you know 28% of the customers abandon their cart if they are met with unexpected shipping costs? Additionally, eCommerce businesses overpay up to 16% on their FedEx/UPS shipping invoices. As a result shipping costs cut into the profit margin for many businesses.
It is impossible for retailers to examine each and every invoice for errors and mistakes. Moreover, FedEx and UPS shipping invoices are complex and fluctuating. As a retailer, you have no clue how to start auditing your shipping invoices. Here’s a checklist of all the commonly committed errors and mistakes on your shipping invoice:
- Late Deliveries: Many services offered by major carriers such as FedEx or UPS have service guarantees. This means every time your order is delivered late to your customer, you are eligible for a money-back guarantee. On an average 15-17% of your packages are delivered late. A vast majority of the late deliveries are eligible for refunds. All you have to do is a request for FedEx or UPS refunds by filing claims online.
- Lost Packages: Even after shipping carrier marks a package as a ‘DELIVERED’ package, your customers may not receive them. The package is then considered to be lost. You may also claim refunds for lost packages. Although it is always advisable to insure the contents of the package.
- Damaged Delivery: When you ship extremely fragile items, you entrust the carrier to get it delivered to the customer without any damage. The packaging is one thing, but handling the package safely is a concern too. Research states that 11% of the total packages delivered are damaged. Similar to lost packages, refunds for damaged packages can also be claimed. You can read more about what to do for Lost and Damaged Parcels here!
- Duplicate Billing : Even though the process of UPS or FedEx shipment invoicing is automated, there are mistakes that are bound to happen. This is predominantly due to the volatile nature of the shipping charges. UPS and FedEx do not have uniform pricing across all business types. This could lead to erroneous billing too. In which case, you, as a shipper, have all the rights to claim for a refund.
- Dimensional Weight Pricing errors: You need to check if the dimensional weight of the package lies in the proximity of the actual weight. The costs depend upon how big the package is and not just how heavy the package is. You are losing out on money if the carrier arrives at a dim weight that is much greater than the actual weight.
- Address Correction Charges: You need to be extra careful about filling in your address details. Every little information matters! From Your Apartment number to the zip code. Sometimes, the shipping carrier may charge you for improper address details. If you are changing your address details, the fee is re-processed. By identifying recurrent wrong addresses, you can save 3-4% of shipping costs.
- Residential Charges: Are you getting your parcel delivered to a business? Then you should be charged with a commercial charge! Any deliveries to a company or an organization should be considered as a commercial fee, if not, you can ask them for a refund on the extra cash you have paid!
- Incorrect Additional Handling Charge: Did you know that UPS can add an additional handling fee on a package? It is any charge that is needed for special care of the package. It is based on the weight and dimension of the package. Also, if the package needs any extra padding.
- SLA Violations: This denotes service level agreements, made between the shipping carrier and the shipper. When you have a shipping audit, you will be able to compare the agreed-upon prices against the applied rates. For example, say a shipment that weighs over 30 lbs shipped to zone 6 must have a discount of 6.5%. But you have been charged without a discount. While performing an audit it is important to look at these excesses.
- Incorrect Discount Application: If you are shipping in large numbers, you may be able to negotiate with the carrier and ask for discounts. But are you checking if the discounts are being applied properly? But, it is impractical to calculate the discount applied for every shipment. For a line by line reading of your invoice, you can always trust an automated software to do this for you.
Surcharges are any additional expense that is necessary while the carrier delivers the parcels to the customer. According to Parcel Industry, about 28% of the shipping costs amount to FedEx Surcharges. This was inferred from a sample size of 4.6 million shipments.
- Wrong Delivery Area Surcharge: Some delivery areas within the US have extra surcharges because they are difficult to reach or the deliveries there are sparse. Every zip code has a particular surcharge. You need to make sure that you are up to date on the changes and there aren’t any wrong entries.
- Inaccurate Fuel Charges: Fuel Charges change pretty frequently. As a shipper, you need to ensure that the carrier is accommodating for the recent changes as well. It is also based on the dimensional weight of your package. The jet fuel charges are proportional to the package dimensional weight as well as the consignment destination.
- Saturday Delivery Charges: Usually added when the carrier has to pick up or deliver a parcel on Saturdays. But double-check on the areas you are getting it delivered to, and the rates corresponding to that. Also, make sure the rates are up to date with the current rates.
All these surcharges and components of shipping costs are exhausting to even list down! Imagine going through them one by one! It is a logistical nightmare. Especially if you are going to be shipping in large volumes. Exactly how many of these invoices are you going to be going through?
AuditShipment is an AI-powered audit platform that identifies invoices errors, performs tariff rate analysis, and offers deep shipping intelligence. Its time to put your shipping invoice audit on an autopilot mode?